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Business deals

JD.com invests $500m in used smartphone platform

China's No. 2 e-tailer to merge Aihuishou with flea-market app

Chinese startup Aihuishou recycles old smartphones, some of which it resells on its platform.   © Reuters

SHANGHAI -- Chinese online retailer JD.com spent $500 million to purchase a stake in Aihuishou, a platform for recycling used smartphones, with the aim of developing a profit center amid a maturing digital landscape.

Although the size of the stake has not been disclosed, the deal makes JD.com the leading shareholder in the platform.

In addition to an app, Aihuishou oversees about 300 physical locations throughout the mainland where people can sell their used smartphones. The startup then resells high-value phones after cleaning and testing them.

Because those who recycle phones can also purchase brand-new handsets on the platform, it has drawn a growing following.

In a bid to extract synergies, JD.com will merge Aihuishou's business operations with those of Paipai Secondhand, a flea-market app within the group. That way, Aihuishou's smartphones can be added to Paipai's extensive lineup of used apparel, consumer electronics and other wares.

China's e-commerce market has started to slow compared to the meteoric gains of the past. But the used-goods market has enjoyed rapid expansion as of late. Alibaba Group Holding, China's top e-tailer and JD.com's main rival, is adding more physical locations to its own secondhand platform known as Xianyu, or Idle Fish.

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