Tencent-backed online second-hand marketplace Beijing Zhuanzhuan Spirit Technology, more commonly known as Zhuanzhuan, is plotting a $400 million funding round ahead of an initial public offering, according to a Bloomberg report.

Zhuanshuan, currently valued at $3 billion, is trying to gauge interest from private equity and strategic investors, the Bloomberg report said, citing people familiar with the matter.

The second-hand retailer is eyeing a US IPO for as soon as next year, the people said.

Chinese consumers have traditionally shunned second-hand goods, though that has undergone a shift over the past few years led by younger, more environmentally conscious consumers looking for affordable high-end goods.

A joint report by China’s University of International Business and Economics and Isheyipai, a platform for second-hand luxury deals, estimated that sales of second-hand luxury products in China accounts for just 5 percent of the overall luxury market, compared with 28 percent in Japan and 31 percent in the United States.

The report said the Chinese used luxury goods market is in its infancy, with the future scale expected to reach 1 trillion yuan ($154.6 billion),without providing a time frame. In 2019, more than half of secondhand luxury goods consumers in China were below 30 years of age.