36Kr Exclusive | Southeast Asian second-hand e-commerce platform "Kitar" completes over $10 million in Pre-A round financing, with GMV expected to reach $100 million this year

Although Southeast Asia is a fiercely competitive area for e-commerce, there are still blue oceans.

36Kr learned that Kitar, a second-hand e-commerce platform in Southeast Asia, recently completed a Pre-A round of financing exceeding tens of millions of US dollars. This round of financing was led by Yuanma Lvdong, with Shanxing Capital making an oversubscribed follow-on investment, Mindworks capital Concept Capital participating in the follow-on investment, and Yinxiang Capital serving as the exclusive financial advisor. After the completion of this round of financing, Kitar will increase its investment in AI capability building, quality inspection and supply chain infrastructure, offline recycling networks, and regional operation systems. It will continue to deeply cultivate the Indonesian market and accelerate its expansion to a wider market in Southeast Asia.

Frank Zhou, the founder of Kitar, graduated from the Department of Electronic Engineering at Tsinghua University and has a background in Internet products. In 2021, he moved to Southeast Asia and incubated the food delivery business of Shopee from scratch, making it the second-largest food delivery platform in Southeast Asia. In this process, he deeply understood the "time machine" effect of the Southeast Asian market. He found that more than half of the food delivery riders in Vietnam were using iPhones. After interviews, he learned that these were second-hand iPhones purchased by riders due to their pursuit of high-performance devices. Through further platform analysis and research, he found that there was a huge unmet demand in the second-hand market in Southeast Asia, so he founded Kitar. Previously, Frank Zhou was also a core executive of Guazi Second-hand Cars and participated in the early construction and expansion of the second-hand trading platform in China. Most of the members of Kitar come from leading Internet companies such as Shopee, ByteDance, and Alibaba, and have the capabilities in platform products, technology R & D, supply chain operation, and local market expansion.

Since the profitability and scale of single-model second-hand e-commerce are limited, Kitar positions itself as the "Zhuanzhuan + Xianyu" of Southeast Asia: adopting a combined B2C + C2C model. First, it establishes a standardized and trust mechanism and deeply develops the second-hand mobile phone category through self - operation. Then, with the help of AI and the team's operational capabilities, it extends to a wider range of 3C and durable goods categories. For example, high - unit - price categories such as real estate, second-hand motorcycles, second-hand luxury goods, and furniture are all within Kitar's consideration. They all have sufficient profit margins, while the lighter C2C business mainly plays a role in attracting traffic.

According to the judgment of the Kitar team, by 2030, the overall e-commerce market scale in Southeast Asia is expected to be about 40 billion US dollars. Among them, the penetration rate of second-hand e-commerce is relatively high, accounting for 8% - 10% of the share, which is a blue ocean market worth 3 - 4 billion US dollars. Frank Zhou observed that the second-hand e-commerce in Southeast Asia is currently in a winner-takes-all situation, and the competition is not very fierce. Kitar focuses on the Indonesian market first, based on the local reality: Indonesia has nearly half of the population in Southeast Asia, and its e-commerce scale accounts for 30% - 40% of the region. According to his judgment, Kitar still has great development opportunities. If it can become the industry leader, it will capture a market worth 2 billion US dollars, corresponding to a profit of 500 million US dollars, which means that Kitar has the opportunity to grow into a leading unicorn with a market value of billions of US dollars.

The platform can solve the biggest pain point in second-hand transactions, which is the trust issue. Kitar has formed a complete set of standardized systems to transform second-hand mobile phones, which are non-standard products, into standard products, solving users' uncertainties and concerns. In fact, when the Kitar team was engaged in the second-hand car business, they used data and algorithms to solve problems such as quality inspection, pricing, and product selection on a large scale. After the widespread use of AIGC, it can reduce the interference of human factors in quality inspection and generate videos related to product screening and inspection through AI.

The largest supply of second-hand mobile phones comes from individual sellers. Kitar obtains these high-quality supplies from two aspects. On the one hand, it quickly reaches users through the content on the platform and self-media and builds brand awareness. On the other hand, considering the active offline trading characteristics in Southeast Asia, it opens offline stores, synchronizes with the online platform, and builds trust with users and sellers. Currently, Kitar has 3 mall stores and 5 work stations. The former mainly focuses on building brand awareness, while the latter undertakes the fulfillment function and provides door-to-door recycling services in different areas. By the end of this year, Kitar plans to open 20 mall stores and 40 work stations, covering more than 70 cities in Southeast Asia.

In addition, in terms of the supply chain, Kitar has also reached a cooperation with Shoppe, responsible for its "trade-in" business, which is similar to the cooperation relationship between AiHuishou and JD.com. Since brands like Apple do not have direct - operated stores in Indonesia and sales are controlled by local dealers, Kitar has reached a cooperation with these dealers.

Second-hand e-commerce highly tests the ability of refined operation, and the offline layout is relatively heavy. Frank Zhou believes that this will also become a barrier. In this category, for local leading e-commerce platforms in Southeast Asia such as Shoppe and TikTok, seeking cooperation with companies like Kitar is a better solution.

With the advent of the AIGC era, the memory consumption of mobile phones has increased significantly. Coupled with the continuous increase in memory prices leading to the rise in the price of new phones, and different from developed countries in Europe and the United States where the mobile phone replacement cycle has become longer, the Southeast Asian region is mainly dominated by Android phones with relatively fast performance degradation, and the trend of the mobile phone replacement wave is still obvious. The second-hand mobile phone track in Southeast Asia still has a long dividend period.

Therefore, Kitar has also set relatively aggressive development goals. By the end of this year, in terms of market share, it aims to account for 5% of the second-hand mobile phone market in Indonesia; in terms of the number of users, the DAU is expected to reach one million; in terms of sales scale, the GMV will reach 100 million US dollars.