Only a week ago, Facebook launched Marketplaces for a second time in several countries worldwide, including the Netherlands. Marketplaces is a new feature on the giant platform, which links sellers of unused home/personal goods with potential buyers. Each listing consists of a picture of the respective item, a price, the name of the seller, and his approximate location. The filtering of listings firstly happens through location, and then the type of desired product is considered.
Facebook initiated the feature in 2007 when they aimed for increasing the cohesion between buyers and sellers who are already on the network. Back then the feature did not take off too well, so currently the second attempt is taking place (Wagner, 2017). Some commenters are skeptical about the feature because its idea is not novel: eBay, Amazon and Craigslist operate via the same model (Consumer Reports for Yahoo Finance, 2017). However, does the model need to be exceptionally novel when such a giant user base is already available?
The answer is probably no. Facebook’s director of Product Management, Mary Ku asserts that more than 450 million people visit buy-and-sell platforms around the world. Additionally, the average Facebook Messenger user spends approximately 50 minutes per day on the app (Consumer Reports for Yahoo finance, 2017). Those two factors leave Facebook in a very favorable position regarding Marketplaces. The key to the progressive idea is taking advantage of the stable network effects that already exist and are bound to persist on the platform. Facebook did not become too greedy since it did not indulge in the payment business associated with the offered goods on Marketplaces, although the option was available (Wagner, 2017). The company realizes its immense potential as an influencer of a community, and bases its model on advertising revenue. Facebook does not want to diverge from its community focus and it strategically applies the benefit of it to the purpose of augmenting its audience even more- the ultimate positive feedback loop.
Although Facebook does not aim to overtake online marketplaces, it might as well do so, or at least pose a threat to them. Being novel in the sphere does not eradicate the core advantage of the company, established user base that is unlikely to fade away soon. From a well-thought-of initiative, it might become a potential conglomeration attack for the weaker online marketplaces.
The picture is not too bright from every side, though. Along with the large user base and offered goods come the security and privacy concerns. Fake profiles are flooding the platform. Although Facebook is trying to project as much reliability of Marketplaces as possible, at this stage it is not able to fully screen a scam because the offer would be already based on a potentially fake profile. And a fake profile needs to be reported, so that it’s taken down. For now, it seems that the large burden of fraud prevention lies on the shoulders of customers. Are they ready to take the challenge, though?
One thing is for sure- Marketplaces will definitely not have the same reputation as from 10 years ago. Potentially, it might even become the new Uber for home-selling. Combined with Facebook’s potential, the future of platforms and online marketplaces might shift drastically toward the Conglomerate side, virtually leaving small and even intermediate players behind.
Sources: Consumer Reports for Yahoo Finance (2017) Facebook Marketplace: What You Should Know. Retreived on October 21 from https://finance.yahoo.com/news/facebook-marketplace-know-234201709.html
Wagner, K. (2017) Facebook’s Craigslist Competitor Will Soon Feature a Lot More Than Your Neighbor’s Old Junk. Retreived October 21 from https://www.recode.net/2017/8/18/16166012/facebook-marketplace-craigslist-ticket-sales-auto-shopping
