Summary in Plain Language
Recently, it was discovered that REDnote has been secretly testing a “personal items for sale” feature for nearly a year, and now it’s finally ready to launch a second-hand trading service. REDnote has adopted a similar fee structure to Xianyu (a Chinese second-hand trading platform), charging only 0.6% in service fees. This move comes at a critical time when Xianyu has significantly increased its fees, causing many high-value item sellers to leave the platform. REDnote aims to retain the massive traffic that used to flow from its product recommendation section to Xianyu for transactions and turn it into revenue. However, the feature is highly concealed; there is no official announcement, no prominent entry point, and even no clear timeline for its full launch. The main reason for this is REDnote’s internal dilemma: while they want to generate revenue from second-hand trading to address their commercial shortcomings, they are also concerned that the inherent issues with disputes and counterfeit products could ruin the community atmosphere that makes REDnote successful. It’s likely that REDnote won’t compete directly with Xianyu but will instead target a niche segment of the second-hand market.
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Detailed Explanation
1. REDnote’s Entry into Second-Hand Trading Was a Last Resort
Many may not have noticed, but the total views on “idle items”-related topics on REDnote approach 5 billion, especially for categories like luxury bags, collectibles, niche clothing, and baby products, where a strong second-hand trading culture has already taken hold. Users trust these posts because they see real, personal experiences shared by bloggers, which increases the likelihood of a transaction.
Previously, REDnote lacked its own trading tools. After buyers and sellers agreed on a price, they would go to Xianyu to complete the transaction. This meant that REDnote, having built a valuable user base, was essentially giving orders to its competitor for free. This year, Xianyu increased its service fee from 0.6% to 1.6% and removed the previous limit of 60 yuan per transaction, causing many high-value item sellers to look for other platforms. REDnote’s new 0.6% fee structure is like offering these sellers a chance to stay on its platform.
2. Hiding the Feature Out of Fear of Damaging Its Core Community
Why isn’t REDnote promoting this feature more aggressively? The reason is that second-hand trading goes against its core values. REDnote’s value lies in the trust users have in its content, which generates over 30 billion yuan in annual revenue from ads. Second-hand trading, however, is associated with disputes, counterfeits, and other issues. If REDnote fully embraces this business model, it could lose this trust. Many sellers have already expressed dissatisfaction, and the platform is limiting the promotion of such content to avoid ruining the community atmosphere.
3. Internal Struggles Over Risk-Benefit Analysis
REDnote’s annual revenue of 42 billion yuan comes 76% from ads. While the second-hand market is huge, the fee structure means only a small portion of that revenue would be generated. Even if REDnote achieved 100 billion yuan in second-hand sales, it would only earn 600 million yuan—far less than what it could earn from additional ads. However, operating a second-hand trading platform is much more costly: it requires developing a system, handling disputes, and preventing fraud, all of which carry significant risks. Moreover, any negative incidents could harm the platform’s reputation. Despite this, the demand for second-hand items on REDnote is substantial, and restricting these transactions would force users to use other platforms, damaging the user experience.
4. No Full Launch Yet: A Balanced Approach
REDnote is hesitant to fully launch the feature because it doesn’t want to risk damaging its community. It doesn’t want to completely eliminate the second-hand trading option to avoid user backlash, nor does it want to invest heavily in it and risk ruining its community. Instead, it’s treating it as a supplementary service, waiting to see how it performs before making a final decision.
5. No Competition with Xianyu’s Core Market
REDnote and Xianyu serve different markets. Xianyu covers a wide range of items, from large appliances to small toys, while REDnote focuses on high-value categories like beauty products and luxury goods. REDnote aims to build trust through authentic blogger content and create a clean, premium second-hand trading environment for these items. While users may still buy cheaper second-hand items on Xianyu, they are more likely to seek trusted sellers on REDnote for luxury and collectibles. Therefore, the two platforms complement each other rather than competing directly.
In summary, REDnote’s approach reflects a careful balance between revenue generation and maintaining its community integrity. It’s unlikely that REDnote will significantly impact Xianyu’s market position; instead, both platforms will continue to operate in their respective niches, each earning their own share of the second-hand trading market.