Facebook’s Marketplace, or the New Uber for Goods?

21

October

2017

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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

 

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“…because what the Internet teaches you is that for every desire, there’s an answer to that desire.”

14

October

2017

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Platform structures are fascinating in the way they promote availability and ease of access. They almost propel the notion that anything we want is available, anytime, anywhere. What is more, we are not alone in our wants and needs.

Let’s refrain from talking about goods and services on Internet platforms. Content platforms reveal even more about the human’s psyche than any other market. Or should we call it the market of desires?

Independently of whether goods platforms or content platforms emerged first, the latter can be a direct source of analysis of what people actually lack in terms of sensation and emotion. The Internet, however, has the ubiquitous capacity to turn every need into a possibility to supply either content or goods to feed this need. It makes us feel satiated, no matter what the need is. Whatever thirst we have, we can quench it online. This process almost becomes a market of desires. We can find an answer even to our sensations. Everything on the web is controlled by the laws of supply and demand; desires are searched for on the Web, so the Internet is bound to give them to us. Thus, for every demand, there is a supply mechanism. There are also others who take advantage of this supply because, as it turns out, we are never alone in our desires.

As the noted gay fiction writer and author of the bestseller “What Belongs to You” Garth Greenwell points out, the notion that there is an answer to every type of demand and that we are less lonely in our desires on the Web is beautifully illustrated with the example of queer people. Having continuously felt isolated and voiceless, gay people can now find the “supply” of their desires online. Although such a picture is disturbing to imagine, the Internet actually gives confidence to queer people because it not only provides them with the sensation they sometimes need, but also teaches them that they are not alone in their desires. They don’t feel the same type of solitude anymore, and are much more likely to open up in their status of queer people. It is very moving, Garth confesses, that in erotic sites everything that you imagine desiring is also desired by someone else.

Content platforms have provided us with a myriad of ways to illustrate and even get a sense of our own unconsummated desires. This is happening even to a disturbing level since nudity is currently more available than ever before.  However, the Internet has actually allowed the queer community to feel less isolated and to find out that there is always someone with a similar desire on the other side of the wire.

Internet- degenerated market for desires or queer people’s sanctuary? You decide for yourself.

To get a sense of Garth Greenwell’s  entire interview about the topic, follow the link to the article below:

https://logicmag.io/02-freaks-like-us/

Source: Weigel, Mora. “Freaks Like Us: A Conversation with Garth Greenwell on Queerness and the Internet.” Logic: A magazine About Technology. October 5, 2017.

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Technology of the Week – The Online Apparel Industry

22

September

2017

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A major disruption is happening in the apparel industry. After its first week of operation in July 1995, with an order total of 12,000 dollars, the online player Amazon nowadays ships 35 orders per second.

There are some critical factors which a customer evaluates when deciding whether to make a purchase or not. The first one is the product assortment. Shops have a wide range of various products nowadays and the more variety, the higher the chance that a customer buys a product. A second factor is the information richness. The availability of information about the product, as well as the ability to compare the attributes of various products directly increases the chance of purchase. Another factor is the virtual storefront. Good user interface and ease of access can speed up the buying process and lead a customer to the point of purchase. The perceived service quality is also taken into consideration. Virtual stores serve both as marketing channels and information systems, which makes them have double purpose in the process. Perceived service quality is defined as the distinction of what customers expect and what customers receive. The last factor observed is trust and credibility. Perceived trust is influenced by privacy and data concerns. If the customer feels that the online shop does not safely handle data, their intent of purchase might diminish.

The increasing popularity of the online apparel industry could be explained with the “Anatomy of the Long Tail” theory. Retailers want to reach a big customer base at the lowest costs possible and offer a variety of products. Online stores achieve both objectives. They allow a retailer to be able to sell high quantities of less popular, personalized products rather than rely on quantities of popular products. Online, customers also take advantage of customer reviews, search and feedback tools. Essentially, physical stores are local, while virtual stores are global!

Another explanation of the disruption could be drawn from the theory of Newly Vulnerable Markets. The retail industry is currently easy to enter because of low bargaining power of suppliers, low barriers to entry, and availability of information and the internet. Online players can achieve higher objectives at a lower cost. The market is attractive to attack because the new online players can offer a bigger assortment of products to a larger customer base. The market is difficult to defend because of the high fixed costs physical stores have. Thus, it is hard for physical stores to compete with the pricing and variety of online ones.

The Five Forces model reveals that the online apparel industry would be unattractive to individual players in the future. Thus, stores should try to deliver more than convenience and online availability.

As for the future, online retailers should aim at personalized shopping experience, which would engage customers on an emotional and visceral level. Differentiate from others! To get a better understanding of the analysis, use the link below!

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