Can the national subsidy stimulus and the efficiency revolution drive the second-hand market to further development?
The wind of national subsidies has blown from comprehensive e - commerce platforms to the second - hand electronics market.
On March 11, the parent company of the second - hand platform Aihuishou, Vipshop, released its financial results for the fourth quarter and the full year of fiscal year 2024.
Overall, Vipshop achieved remarkable performance in this fiscal quarter. Data shows that in Q4 2024, the company recorded revenues of 4.85 billion yuan, a year - on - year increase of 25.2%. For the full year of 2024, the total revenues reached 16.33 billion yuan, a year - on - year increase of 25.9%.
Notably, while expanding its scale, the company's profitability has also been further improved. In Q4 2024, the company's non - GAAP operating profit was 130 million yuan, a year - on - year increase of 61%. For the full year of 2024, the non - GAAP operating profit reached 410 million yuan, a year - on - year increase of 62.8%, achieving profitability at the non - GAAP level for three consecutive full fiscal years.
After entering 2025, with the extension of national subsidy policies to the 3C field, the popularity of the second - hand electronics recycling market has further soared. According to Vipshop's disclosure, after the policy expansion in January this year, the policy has significantly boosted the second - hand electronics recycling business. During the Spring Festival, the company's C2B recycling performance even achieved a year - on - year expansion of over 70%.
After years of steady growth, entering 2025, the policy dividends of national subsidies undoubtedly bring new opportunities to Vipshop. However, at the same time, some market voices have begun to question the sustainability of Vipshop's and even the entire second - hand industry's growth.
So, what is the quality of Vipshop's financial report for this fiscal quarter? What impact do national subsidies have on the company's performance? Is there still room for imagination in the future?
Revenue and profit both exceed expectations
The biggest highlight of this financial report is the unexpected growth of both Vipshop's revenue and profit.
In terms of revenue, in Q4 2024, the company recorded total revenues of 4.85 billion yuan, a year - on - year increase of 25.2%, exceeding the upper limit of expectations. Among them, product revenues were 4.46 billion yuan, a year - on - year increase of 26.6%; service revenues were 390 million yuan, a year - on - year increase of 10.7%.
For the full year of 2024, the company's total revenues were 16.33 billion yuan, a year - on - year increase of 25.9%. Among them, product revenues were 14.84 billion yuan, a year - on - year increase of 27.3%; service revenues were 1.48 billion yuan, a year - on - year increase of 13.5%, and the comprehensive service charge rate was 5.35%.
Fundamentally, the company's revenue exceeding expectations this fiscal quarter/year can be attributed to two factors:
First, in the past year, benefiting from the high - quality store scenarios of long - term operation and the trade - in scenarios cultivated with strategic partners, the company has achieved greater coverage of first - hand sources, driving the growth of the 3C product recycling scale, ensuring a rich and high - quality supply of platform products. On the basis of expanding high - quality sources, relying on the parallel B2B + B2C sales model, the number of second - hand commodity transactions across the platform has increased. In 2024, the total number of second - hand commodity transactions of the company exceeded 35.3 million, a nearly 10% increase compared with 2023.
Second, while the transaction volume has been growing steadily, on the one hand, Vipshop has increased the proportion of C - end sales with higher value in its 1P business by 8 percentage points to 29% in the fourth quarter, relying on professional value - added services such as quality inspection, pricing, and rating, as well as compliance refurbishment capabilities; on the other hand, benefiting from the expansion of the Paijitang platform scale and the increase in the volume of multi - category recycling business, the company's 3P business charge rate has increased, jointly promoting the increase in the unit value of the company's business.
Finally, with the resonance of volume and price, the company's revenues have achieved unexpected growth, demonstrating high growth potential.
In terms of profit, in Q4 2024, the company achieved a non - GAAP operating profit of 130 million yuan, a year - on - year increase of 61%, achieving operating profit for ten consecutive quarters, and the non - GAAP operating profit margin increased to 2.7%.
For the full year of 2024, the non - GAAP operating profit was 410 million yuan, a significant year - on - year increase of 62.8%. The non - GAAP operating profit margin increased from 1.9% in 2023 to 2.5%, achieving profitability at the non - GAAP level for three consecutive fiscal years, and also achieving operating profit under the full - year GAAP standard for the first time in 2024.
Behind the continuous improvement of profitability, on the one hand, thanks to the automated quality inspection system created by the company's technological innovation, which effectively shortens the disposal cycle and drives the improvement of turnover efficiency, combined with the advantage of economies of scale brought about by the expansion of sales volume, jointly leading to a decrease in the fulfillment expense rate. In 2024, the non - GAAP fulfillment expense rate further decreased from 8.5% to 8.3%. Since Vipshop's core 1P business has a heavy - asset operation model, the release of profit highly depends on economies of scale and turnover efficiency. With the expansion of scale advantages and the improvement of commodity circulation, the fulfillment expenses can be effectively diluted, and the profitability can be improved;
On the other hand, the improvement of compliance refurbishment capabilities has increased the proportion of C - end sales products with higher gross profit, combined with the growth of the 3P business, especially the multi - category business, increasing the overall gross profit margin, contributing incremental profit to the operating model. As of the end of 2024, a total of 673 Aihuishou stores had launched multi - category recycling services, and the multi - category recycling transaction volume in its own scenarios increased nearly three times year - on - year, contributing 8.6% of the service revenues.
How sustainable is the growth?
After entering 2025, the scope of national subsidy policies has been further expanded to digital products such as mobile phones, tablets, smart watches, and bracelets. At the same time, the government work report also clearly stated that a special ultra - long - term treasury bond of 300 billion yuan will be allocated to specifically support the trade - in policy for consumer goods. This means that compared with 2024, the national subsidy policies in 2025 have a wider coverage, larger scale, and longer duration. Affected by this, the policies are expected to further drive the continuation and expansion of the replacement wave of 3C and household appliances products, and also bring a positive boost to the second - hand consumer market.
Under the stimulation of policy dividends, how should Vipshop seize the opportunities and tell new stories?
Before discussing this issue, it is necessary to clarify how national subsidy policies affect Vipshop's performance. Simply put, national subsidies are that the state provides price subsidies for some consumer goods, allowing consumers to replace products at a lower cost. In the past few years, the slowdown in the innovation speed of consumer electronics products has reduced consumers' desire to replace products and lengthened the replacement cycle. The introduction of national subsidies will stimulate the replacement demand of some potential consumers, driving the increase in transaction volume.
At the same time, the release of the demand for new products will also lead to a surge in the number of second - hand products in the market, indirectly promoting the growth of the supply in the second - hand consumer industry.
Based on the above logic, the benefits of national subsidies to second - hand platforms such as Vipshop are actually achieved by stimulating the supply in the second - hand consumer industry. Based on the source - driven characteristics of the second - hand business, it undoubtedly means a direct benefit to the industry's activity.
So, specifically regarding the impact on the platform, the key question is whether companies like Vipshop can seize this wave of dividends and obtain more incremental first - hand sources. And this depends on the platform's user reachability and service capabilities.
A prominent feature of the second - hand market is that the suppliers are very scattered. Therefore, the network density of channels is directly related to the user reach efficiency. As Vipshop's recycling channel, Aihuishou has achieved an all - around, multi - scenario layout online and offline in recent years by constructing a high - density recycling network of "brand stores + e - commerce platforms + leading brands".
Online, on the basis of self - operated systems such as the official website, mini - programs, and APPs, Aihuishou has exclusive access to the trade - in traffic entrance of JD.com through strategic cooperation. In recent years, it has also actively participated in the trade - in programs of leading brand manufacturers such as Huawei and Apple, achieving multi - scenario user reach online.
Offline, it has formed a network system mainly consisting of stores, on - site recycling, and mailing. As of 2024, the number of Aihuishou's offline stores reached 1,861, widely covering 283 cities across the country, continuously strengthening the breadth of the recycling network.
Moreover, as typical non - standard products, in order to reduce the trust risk, in the transaction of second - hand goods, both the supply and demand sides prefer the fulfillment method of face - to - face recycling and on - the - spot payment. The extensive offline store + on - site recycling system perfectly meets the users' needs for face - to - face transactions, improving the user service capabilities and experience on the recycling side, and strengthening the depth of the recycling network.
Based on this, in the earnings conference after the release of this financial report, Aihuishou clearly stated that its goal in the next three years is to deploy 5,000 stores and a 5,000 - person on - site service team across the country to meet users' diverse recycling and trade - in needs with a more comprehensive delivery network. Among them, 800 new Aihuishou stores and 1,000 on - site service employees will be added in 2025.
It is true that obtaining more high - quality first - hand sources is crucial for the second - hand consumer industry, but having good goods is not the end goal of the platform. Only by selling good goods can the potential opportunity cost be converted into real revenue. In the sales process, in addition to the requirements for the quality and variety of platform products, it also greatly tests the platform's user experience.
Due to the non - standard nature of second - hand goods and the scattered supply and demand, information asymmetry and opaque prices in the market have always been the main pain points in the industry. Vipshop has become a hub connecting users, self - operated (1P), and small and medium - sized merchants (3P) through its two second - hand trading platforms, "Paipai" and "Paijitang", establishing a complete B2C + B2B sales layout.
Among them, "Paijitang" aims to establish an efficient second - hand trading platform for small and medium - sized merchants, improving the circulation efficiency of the industrial chain by simplifying the trading process and reducing intermediate fees; "Paipai" directly targets individual consumers, increasing the supply of high - quality products through self - operation and the upgraded consignment model of POP to meet consumers' diverse needs and enhance service capabilities.
At the same time, in the transaction process of second - hand goods, due to the lack of authoritative standards for describing the condition and appearance of items, it is very easy to lead to transaction disputes. To solve this pain point, Vipshop has built 8 operation centers across the country. The recycled second - hand devices will undergo value - added services such as strict quality inspection, rating, and compliance refurbishment in the operation centers to standardize non - standard products as much as possible. At the same time, based on transaction big data for accurate pricing and combined with a complete after - sales service guarantee, the time cost and trust cost of transactions are greatly reduced, and the shopping experience is improved.
Overall, the industry dividends brought by national subsidies in 2025 undoubtedly provide a foundation for the company's continuous expansion, but Vipshop's capabilities are not limited to policy - driven factors. More importantly, through the comprehensive advantages in recycling, disposal, and sales accumulated over the years and the full - industry model layout of "C2B + B2B + B2C", the company can achieve a more scale - advantageous supply - demand matching network, bringing continuous and steady expansion of scale and profit. It is precisely based on this strong self - strength that Vipshop appears more calm when policy dividends arrive.
Promising in the long run
With the short - to - medium - term certainty brought by national subsidies, is Vipshop's long - term development space worthy of attention?
In the long run, there is still significant growth potential in the second - hand consumer market. Against the backdrop of the domestic economic growth entering a stable stage and the aging population, the increasing uncertainty among residents and the rising cost of living have promoted the rise of rational consumption trends, providing fertile ground for the growth of the second - hand consumer market. At the same time, the Z - generation is playing an increasingly important role in consumption. Their growth environment and consumption preferences make them more likely to accept second - hand goods, changing the once - prevalent Chinese consumption concept of "shunning second - hand goods", and driving the growth of the second - hand consumption scale and the increase in penetration rate. According to data from iResearch, in 2023, the second - hand consumption transaction volume in China reached approximately 1.3 trillion yuan, and it is expected to further increase to 2.55 trillion yuan in 2027, with a CAGR of 18%, far exceeding the overall consumption market.
With the rapid expansion of the industry, the policy support for the circular economy has also been significantly strengthened in recent years. This has made the second - hand consumer industry one of the few sectors with both high growth potential and low policy risk.
However, despite the promising growth prospects, the overall competitive landscape of the second - hand consumer market is very fragmented, characterized by the co - existence of leading players and numerous small and medium - sized merchants. Taking the second - hand consumer electronics market as an example, according to data from CIC, in 2020, in the Chinese second - hand consumer electronics trading and service market, the combined market share of the top 5 merchants was less than 12% in terms of total merchandise volume.