JD.com To Invest $500 Million in Second-Hand Goods Recycling Platform Aihuishou

China’s e-commerce giant JD.com’s second-hand commodity trading platform “Paipai” will undergo a strategic merger with China’s largest electronic product recycling platform “Aihuishou“.

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The newly announced round of funding will be led by JD.com, who will inject more than $500 million in Aihuishou, followed by others.

Estimates say that the new round of funding will bring the valuation of Aihuishou to over $2.5 billion. After the merger, JD.com will become the largest strategic shareholder of Aihuishou.

The merger will bring about improved strategic coordination between and complementary advantages for Aihuishou and Paipai. Chen Xuefeng, founder and CEO of Aihuishou, said the solid foundation will enable the two companies to together provide better circulation and recycling of secondhand goods through their new jointly-established service platform.

Liao Jianwen, Chief Strategic Officer of JD.com, said that JD.com will utilize its logistics infrastructure to assist the two in improving circulation efficiency, automation of supply chains, as well as the recycling and disposal of goods.

Founded in 2011, Aihuishou (lit. love recycling) is an auction style C2B platform for recycling and selling second-hand electronic goods such as mobile phones, computers, cameras, speakers and more.

Paipai was originally a C2C e-commerce platform operating as subsidiary of Chinese technology giant Tencent. It merged with JD.com when Tencent invested in the latter back in 2014. The service was, however, shut down in 2016 by Tencent due to the platform’s uncontrollable abundance of fake goods. It was then revived again a year later to sell “quality second-hand goods”.

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