Secondhand Electronics Trading Platform Aihuishou Reveals $3.5 Billion GMV in IPO Filing

Aihuishou operates 755 brick-and-mortar stores in 140 cities across China. (Source: Sohu)

Chinese secondhand electronics reseller Aihuishou has filed for an IPO with the US Securities and Exchange Commission, as the JD.com-backed company looks to boost its position in China’s pre-owned consumer electronics market and drive its overseas expansion.

The C2B (customer-to-business) app, which facilitates sales, recycling and trade-in services for mobile phones, cameras and laptops, is looking to list on the New York Stock Exchange under the ticker symbol “RERE,” according to the firm’s preliminary prospectus filed on May 28. Aihuishou, which means “love recycing,” also operates 755 offline stores in 140 cities in China.

According to the company, total gross merchandise value (GMV) for its fiscal year ended March 2021 climbed 66% year-on-year to reach 22.8 billion yuan ($3.5 billion), with more than 26 million consumer products transacted on the platform. For the three months ended March 31, the firm’s total GMV reached 6.2 billion yuan, representing a year-on-year growth rate of 106.7%. Out of all consumer products traded and bought on Aihuishou, 67% were mobile phones.

Founded in 2011, the company has yet to make a profit, with net losses widening from 207 million yuan in 2018 to 470 million yuan in 2020. Revenue for 2020 came in at 4.8 billion yuan, an increase of 23.6% from the previous year.

Aihuishou’s operator, ATRenew, also runs two other trading platforms: Paijitang Marketplace, a B2B marketplace for trading electronics and Paipai Marketplace, JD.com’s secondhand commodity trading platform that merged into Aihuishou in 2019. On top of electronics, Paipai also includes the sale of luxury goods, household items and books.

Joint underwriters on the deal include Goldman Sachs, BofA Securities, China Renaissance and Tiger Brokers. No pricing terms were disclosed. Reuters previously reported that the Shanghai-headquartered company is planning to raise between $500 million and 1 billion as a result of the listing.

The company aims to attract investors with its environmental, social and governance (ESG)-friendly business outlook, Reuters reported citing people familiar with the matter.

In February, Aihuishou completed a $200 million pre-IPO fundraising round in which JD.com also participated, the report added.

The company boasts strong supply chain capabilities including inspection, grading, pricing, quality control, and after-sales services. It also partners up with e-commerce platforms and smartphone brands to provide exclusive recycle and trade-in services to their customers.

The company is also ramping up expansion efforts, with plans to “increase the global circulation of pre-owned devices and to empower the existing value chain overseas by leveraging our technological advances, particularly our automatic testing process.”

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According to a CIC Report, 189 million pre-owned devices were transacted to merchants and individual buyers in China last year, with 252 billion yuan in total GMV distributed to merchants and buyers.

China currently has the world’s largest number of consumer electronic devices in circulation in 2020, the CIC report added – greater than that in the United States and Europe combined – with continual rollout of new models leading to more frequent replacements of devices and a high quantity of pre-owned goods on the market.