ATRenew, a recycling specialist, continues to make progress, reporting strong revenue growth in the second quarter and predicting similar growth in the third. The company is benefiting from rising demand from value-conscious consumers and its strategic partnerships with global tech giants Apple and JD.com.
ATRenew’s latest financial report highlights the company’s focus on improving margins by emphasizing more profitable businesses. This includes product refurbishment and direct sales to consumers, offering higher margins than simply trading in electronics through middlemen. In the second quarter, revenue from ATRenew’s direct-selling business more than doubled, rising 125% year-on-year to 960 million yuan ($134 million), accounting for about a quarter of its total revenue.
ATRenew’s strong performance is also linked to its deepening ties with long-time e-commerce partner JD.com. The two companies signed a new multi-year agreement in May, further strengthening their collaboration in the second-hand business. This partnership is crucial as JD.com, a leading online electronics seller in China, ramps up its efforts to promote used electronics in alignment with the government’s circular economy initiatives.
Furthermore, ATRenew’s partnership with Apple for iPhone recycling, launched last year, is gaining traction. While initially facing challenges due to low margins, ATRenew has adjusted the program and achieved a positive gross margin in the second quarter. This partnership has the potential to contribute up to 1.5 billion yuan ($210 million) to ATRenew’s annual revenue.
ATRenew’s success is also fueled by the growing trend of trade-in programs in China. The government’s promotion of large-scale trade-ins of consumer goods, coupled with local initiatives, is driving increased consumer adoption of trade-in options. This is creating a strong foundation for ATRenew’s future growth.
Overall, ATRenew’s financial performance is impressive. The company’s revenue grew 27.4% in the second quarter to 3.78 billion yuan ($530 million), and it predicts continued growth of between 22% and 25% in the third quarter. This trajectory indicates that ATRenew is well-positioned to benefit from the growing demand for refurbished products and the increasing focus on sustainability in China. The company’s focus on profitability and its strategic partnerships with major players like Apple and JD.com are key drivers of its success.
