Executive Summary
Key insights into Aihuishou’s current challenges and strategic moves:
- Aihuishou is grappling with a severe trust crisis driven by widespread consumer complaints about pricing discrepancies between online estimates and offline assessments.
- The platform’s partnership with JD.com’s trade-in program has exacerbated user frustration, with many reporting sudden price drops and lost subsidies.
- Intense competition from rivals like Xianyu and social media platforms is eroding Aihuishou’s market share and highlighting its business model vulnerabilities.
- Despite posting its first quarterly profit, Aihuishou’s heavy reliance on subsidies and high operational costs raise sustainability concerns.
- The endorsement by table tennis star Xu Xin aims to restore trust, but fundamental operational changes are needed to address the core issues.
As China’s second-hand electronics market expands, Aihuishou finds itself at a critical juncture. A growing chorus of consumer complaints on social media platforms like Xiaohongshu and Hei Mao Tou Su has spotlighted a deepening trust crisis for the recycling giant. Users consistently report jarring disparities between initial online quotes and final offline offers, often accompanied by opaque inspection processes and unresponsive customer service. This trust crisis threatens to undermine Aihuishou’s market position even as it celebrates its first quarterly profit. The recent endorsement by Olympic table tennis champion Xu Xin represents a bold attempt to rebuild consumer confidence through his reputable image. However, with mounting competitive pressures and structural challenges, the question remains whether celebrity appeal alone can resolve fundamental operational issues that have plagued the platform for years.
The Pricing Predicament: Online Estimates Versus Offline Reality
Aihuishou’s trust crisis stems primarily from significant discrepancies between its online valuation system and actual in-store assessments. Consumers report initially receiving attractive quotes through the platform’s app or website, only to face substantial price reductions after lengthy inspection processes at physical locations.
Documented Cases of Valuation Disparities
Multiple users have shared similar experiences across various platforms. One Xiaohongshu user detailed how their iPhone 13 Pro Max (256GB) received an initial online estimate of 2,560 yuan, with potential to reach 2,660 yuan using additional coupons. However, after nearly an hour of inspection at an Aihuishou store, the final offer plummeted to 1,300 yuan without clear explanation of the issues affecting the valuation. This pattern repeats across numerous complaints, with users expressing frustration about the lack of transparency during the assessment process. On the Hei Mao Tou Su platform, another consumer reported their iPhone 14 Pro Max (256GB) dropping from an initial 4,625 yuan estimate (including trade-in subsidies) to 3,825 yuan after an engineer cited unspecified “border paint chipping” and “screen scratches” that the owner disputed. The absence of photographic evidence or detailed explanations during these assessments fuels consumer skepticism and contributes directly to the trust crisis.
Systemic Issues in the Assessment Process
The root of the valuation problem lies in Aihuishou’s two-tier assessment system. Online evaluations require users to select from limited, vague options about device condition, while offline inspections involve over twenty technical standards that consumers cannot easily verify. This information asymmetry leaves customers vulnerable to unexpected price adjustments. Compounding the issue, inspection procedures typically lack audio or visual documentation, and engineers often fail to adequately explain deduction reasons. Even when customers decline the reduced offer, they’ve already invested significant time and effort, creating negative experiences that further damage brand perception. The trust crisis intensifies as these incidents accumulate across user communities, with many warning others to avoid Aihuishou entirely.
Consumer Backlash and Brand Damage
The consistency and volume of consumer complaints indicate that Aihuishou’s trust crisis extends beyond isolated incidents to systemic operational flaws. Data from complaint platforms and social media reveals the scale of dissatisfaction and its impact on brand reputation.
Mounting Complaint Statistics
As of October 5, Hei Mao Tou Su platform hosted 20,558 complaints containing the search term “爱回收” (Aihuishou), with 577 new complaints in the previous 30 days alone. The majority address pricing issues, with phrases like “malicious price suppression” appearing frequently. Additional grievances cover poor after-sales service and quality concerns about refurbished products. This complaint volume has remained high over several years, suggesting persistent unresolved problems. The pattern transcends specific product categories, affecting smartphones, laptops, handbags, and various electronics. Particularly damaging are reports of final offers as low as 2 yuan for items like monitors and robotics vacuums—amounts that consumers find insulting given the time investment required for the recycling process.
Partnership Complications with JD.com
Aihuishou’s collaboration with JD.com on trade-in services has amplified consumer frustration. Many users report confusion about the relationship, assuming they’re dealing directly with JD.com rather than a third-party provider. Several documented cases show customers losing promised subsidies when final recycling prices differ from initial estimates. In one highlighted instance from Zhejiang Television’s 1818 Gold Eye program, a customer named Mr. Bi participated in a JD.com trade-in offer for a new iPhone, with his old iPhone 11 initially valued at 1,531 yuan (including 952 yuan recycling price and 579 yuan subsidy). After paying 5,999 yuan for the new device, the recycling process at an Aihuishou store resulted in a price reduction to 809 yuan due to alleged “screen wear” and “appearance wear,” followed by cancellation of the original order and loss of the subsidy. The customer found this outcome particularly unreasonable since he understood the subsidy would apply regardless of minor price adjustments. These incidents demonstrate how partnership models can exacerbate the trust crisis when communication and process transparency are inadequate.
Competitive Pressures in the Evolving Second-Hand Market
While Aihuishou struggles with its trust crisis, competitors are capitalizing on shifting consumer behaviors and technological advancements. The platform’s traditional business model faces significant challenges from more agile and integrated alternatives.
Rival Platforms and Their Advantages
Xianyu (闲鱼), backed by Alibaba’s ecosystem, has built substantial competitive advantages through network effects and integration with Taobao. Unlike Aihuishou’s transaction-focused approach, Xianyu leverages user communities, content engagement, and service derivatives to create a more comprehensive second-hand experience. TMT industry analyst Zhang Shule (张书乐) notes that “Aihuishou’s model is essentially an online version of traditional second-hand transactions, with the online component serving merely as a front desk. In reality, it only breaks information barriers within the same city without extending the long tail, making expansion difficult and cost reduction challenging.” He contrasts this with Xianyu’s strategy of targeting niche markets like anime merchandise to drive growth. The fundamental difference lies in business philosophy: while Aihuishou concentrates on standardized recycling processes, competitors build ecosystems that enhance user engagement and loyalty.
Social Media’s Disruptive Influence
Platforms like Xiaohongshu, Douyin, and Kuaishou are reshaping second-hand consumption through content-driven discovery. Users increasingly encounter recycling opportunities through “device switching diaries,” “minimalist lifestyle” content, and “decluttering inspiration” rather than actively seeking recycling services. This “content + community + transaction” model naturally lowers trust barriers by incorporating social validation and emotional connection. Zhang Shule observes that “content-driven second-hand consumption essentially relies on vertical influencers using their personal reputation as endorsement. This approach, heavily dependent on word-of-mouth and expertise, indeed has strong penetration but weak replicability.” However, he acknowledges its growing influence as merely a branch of social commerce rather than a mainstream model. For Aihuishou, whose strategy emphasizes physical presence and standardized processes, this environmental shift presents significant adaptation challenges.
Financial Performance and Operational Challenges
Despite its trust crisis, Aihuishou has demonstrated financial improvement, though sustainability questions persist due to its cost structure and external dependencies.
Recent Financial Results
In Q2 2025, Aihuishou’s parent company Wanwu Xinsheng (万物新生) reported record revenue of 4.99 billion yuan, representing 32.2% year-over-year growth. More significantly, the company achieved its first quarterly profit under non-GAAP measures, with operating profit exceeding 120 million yuan. This milestone follows years of expansion and accumulated losses totaling approximately 4.6 billion yuan between 2018 and 2022. The improved performance partly reflects favorable market conditions, including government-led “trade-in” initiatives and e-commerce platform subsidies that boosted consumer recycling activity. The multi-category recycling GMV reached 1.87 billion yuan in Q2, up over 110% year-over-year, with gold recycling showing particularly strong growth of 118% due to rising gold prices.
Cost Structure and Expansion Strategy
Aihuishou’s operational model remains heavily dependent on physical infrastructure. As of Q2 2025, the company operated 2,092 stores across 291 Chinese cities, supported by 1,160上门 (door-to-door) service staff. This extensive network creates substantial fixed costs, with estimated monthly operating expenses of approximately 30,000 yuan per store, translating to nearly 30 million yuan monthly across the store network. Wanwu Xinsheng Executive President Wang Yongliang (王永良) has announced plans to add 800 new stores and 1,000 additional door-to-door engineers in the current year, aiming to achieve nationwide “face-to-face recycling, immediate payment” service. However, this expansion occurs amid a declining stock price—from over $18 per share at its June 2021 IPO to $4.35 by October 2025, representing a nearly 75% decrease and reducing the company’s market capitalization below $1 billion. The trust crisis undoubtedly contributes to investor skepticism about the company’s long-term prospects.
The Endorsement Strategy: Xu Xin and Trust Rehabilitation
Aihuishou’s recent partnership with table tennis star Xu Xin (许昕) represents a direct response to its trust crisis, leveraging his reputable image to reassure consumers about the platform’s reliability.
Celebrity Endorsement as a Trust-Building Tool
The “当面放心收” (Face-to-Face Assurance Recycling) campaign featuring Xu Xin aims to associate Aihuishou with qualities of precision, reliability, and transparency—attributes commonly associated with the Olympic champion. Marketing materials draw parallels between Xu Xin’s “accurate strikes” and Aihuishou’s purported commitment to fair, transparent recycling processes. In theory, celebrity endorsements can transfer positive attributes from the endorser to the brand, potentially mitigating negative perceptions. However, this approach faces significant challenges when underlying operational issues remain unaddressed. As Zhang Shule cautions, “Aihuishou relying on subsidies is not a sustainable strategy. The detours taken by domestic new energy vehicles that previously depended on subsidies for survival should not be replicated in second-hand platforms.” He emphasizes that during this window of opportunity, Aihuishou should focus on transformation rather than blind expansion, potentially concentrating on specific categories like digital products and collectibles.
Broader Trust-Building Initiatives
Beyond celebrity endorsement, Aihuishou has implemented technological solutions to address transparency concerns. The company has introduced AI-powered pricing systems that use big data and algorithms to provide more consistent valuations across online and offline channels. According to company disclosures, Wanwu Xinsheng plans further AI deployment across additional departments and business processes to improve efficiency and reduce costs. These technological investments represent necessary steps toward resolving the trust crisis, though their effectiveness depends on implementation quality and consumer perception. Ultimately, celebrity endorsements may generate initial attention, but sustained trust requires demonstrable improvements in service consistency, communication clarity, and complaint resolution. The trust crisis will likely persist until consumers experience tangible changes in their recycling interactions.
Strategic Imperatives for Sustainable Growth
Overcoming the trust crisis requires Aihuishou to address fundamental aspects of its business model while navigating an increasingly competitive landscape.
Operational Improvements and Transparency Enhancements
Critical areas for immediate attention include standardizing assessment procedures with clear documentation, improving communication about price adjustments, and enhancing customer service responsiveness. Implementing comprehensive inspection documentation—including photographs and detailed explanation of deductions—could significantly reduce consumer frustration. Additionally, clarifying the relationship with JD.com and other partners would manage expectations and prevent the brand damage that occurs when consumers feel misled. As the second-hand market matures, platforms must recognize that trust represents their most valuable asset. The current trust crisis underscores how quickly reputation can erode when operational realities diverge from marketing promises.
Strategic Positioning in a Changing Market
Zhang Shule suggests that Aihuishou should leverage its physical infrastructure advantages while refining its service focus: “Aihuishou’s heavy asset layout offline still differentiates it from competitors. It should perhaps pay more attention to the efficiency of same-city recycling, rapidly complete recycling through its offline network, while making some subtractions in categories to ensure the accuracy of online valuations.” This advice points toward a more targeted approach that plays to Aihuishou’s strengths rather than attempting to compete broadly across all second-hand categories. As government incentives eventually phase out and market conditions normalize, sustainable growth will depend on developing operational efficiency and genuine consumer loyalty rather than subsidy-dependent transaction volume.
Aihuishou stands at a pivotal moment, balancing recent financial improvements against persistent consumer distrust. The endorsement by Xu Xin provides a visibility boost, but substantive resolution of the trust crisis requires addressing the fundamental pricing transparency and customer service issues documented across numerous consumer complaints. Investors and market observers should monitor several key indicators: complaint resolution rates, consistency between online and offline valuations, and the company’s ability to reduce its dependency on physical expansion in favor of operational excellence. For consumers, the recommendation remains cautious engagement—verify assessment processes thoroughly and consider alternative platforms until Aihuishou demonstrates sustained improvement in its core service delivery. The coming quarters will reveal whether the company can transform celebrity endorsement into genuine trust restoration or if superficial solutions will prove inadequate against deep-rooted operational challenges.