(Yicai) July 25 -- Major Chinese retailers of furniture and home goods are repurposing large swaths of space into secondhand car trading centers, tapping into a booming used auto market to offset falling decor sales resulting from the country’s prolonged real estate market downturn.

At KMX Group's home furniture plaza in Zhengzhou, the largest such mall in the capital of China's central Henan province, about one-tenth of its floor space has been converted into a used car marketplace, Yicai learned.

Huafeng Group, a Henan-based lighting company, said last month that it will launch a used vehicle trading center in Zhengzhou. Similarly, Red Star Macalline Group partnered with a top auto reseller last September to open car showrooms inside its furniture malls.

These moves reflect an industrywide shift as home furnishings companies seek new revenue streams. Mall operator Easyhome New Retail Group, for example, reported a 41 percent drop in net profit last year to CNY769 million (USD107.3 million), marking its fourth consecutive year of decline.

Huang Jianhua, a more than 20-year veteran of car trading, told Yicai that China's secondhand vehicle market -- the world’s second largest after the United States -- is flourishing. This makes it attractive to home furniture retailers with large retail spaces.

China’s used car market was worth CNY1.2 trillion (USD167.5 billion) last year, with around 19.6 million vehicles changing hands, up 7 percent from 2023, according to data from the China Automobile Dealers Association.

China has a dearth of high‑quality, super‑large used car distribution centers, KMX Chairman Xiao Kaixuan said. Once revamped, big furnishing spaces could let shoppers browse for used cars just as they do for sofas, overturning the image of dingy, open‑air lots, he said.

An executive at Red Star Macalline told Yicai that introducing a used car business into one of its malls in the city of Chongqing has not only generated significant revenue but also boosted foot traffic to the complex’s home goods stores.

Nonetheless, ensuring quality remains a challenge for the used car sector, plagued by opaque condition reports, mileage clock tampering, and hidden accident damage, Huang noted, adding that new entrants must address these trust issues, or consumer hesitation will undercut performance.

Editors: Tang Shihua, Emmi Laine