ATRenew achieves significant revenue growth through trade-ins

In the third quarter of 2023, ATRenew experienced a notable increase in revenue, rising by 24.4% year-over-year, reflecting a broader trend in the growing acceptance of trade-in promotions among consumers in China. This shift towards trade-ins is being influenced by both changing consumer behaviors and government initiatives that encourage recycling and boost consumption. The company's partnership with JD.com played a vital role in this growth, as ATRenew saw a 246% surge in the value of products collected through trade-ins during the 'Double 11' promotions. This partnership aligns with government priorities aimed at fostering sustainable consumer practices. ATRenew's business model, initially focused on electronics, has successfully expanded into other categories such as used luxury goods, gold, and vintage liquors. The company is increasingly leveraging its network of recycling stores, which reached a total of 1,637 by the end of September 2023. This expansion not only raises brand awareness but also supports consumer engagement across various product categories. The company's chairman, Kerry Chen, indicated that trade-ins have become a trend, highlighting the need for ongoing consumer education to facilitate wider adoption of this cost-effective purchasing approach. In addition to increasing trade-in activities, ATRenew reported significant direct sales to consumers through its AHS website and stores, which quadrupled year-on-year during the quarter. This is a clear indication of the growing demand for value-for-money used products, as consumers seek alternatives amid economic uncertainty. The various initiatives contributed to enhancing ATRenew's gross margin to 20% from 19.8% a year earlier and marked its positive net income of 17.9 million yuan, marking only the second time the company has reported a profit. Looking ahead, ATRenew anticipates continued revenue growth in the fourth quarter, projecting an increase of between 4.74 billion yuan and 4.84 billion yuan. This expectation for sustained growth is based on the positive trends seen during the 'Double 11' promotions and reflects the company's strategic initiatives to enhance its service offerings and expand its consumer base. As the adoption of trade-ins matures, ATRenew's market positioning may improve further, benefiting from increased consumer awareness and enhanced recycling efforts in China.