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Before the internet came along, most business would have self-identified that they were a B2B (business to business) or a B2C (business to customer) company. Have you even calculated or noticed the explosion of C2C (customer to customer) companies in the past 20 years? With the continued rise of product or service ecommerce, companies are leveraged things or places that people have and have created marketplaces for consumers to do business with each other. Platforms like AirBnb, Etsy, eBay, and others have exploded this industry. You could claim Amazon is becoming a C2C platform as it is increasingly creating and selling its own products. Why the rise of C2C?
C2C businesses are a new type of business model, sometimes disruptive, that have emerged with ecommerce technology and the sharing economy. The advantage for customers is that they benefit from the competition for products and often find items that are difficult to locate elsewhere. In addition, margins can be higher than traditional pricing methods for sellers because there are minimal costs due to the absence of retailers or wholesalers. C2C websites or even applications are convenient because there is no need to visit a brick-and-mortar store. Sellers simply list their products or services online or via an application, and the buyers come to them.
This business model still allows the companies that build and launch these C2C platforms to make money from the fees charged to sellers for listing items for sale, adding on promotional features and facilitating payment transactions. The C2C market is projected to grow in the future because of its cost-effectiveness. The cost of using third parties is declining, and the amount of products for sale by consumers is steadily rising. Consumers consider it to be an important business model because of the popularity of social media and other online channels. These channels showcase specific products already owned by consumers and increases demand, which drives increased online traffic to C2C platforms.
The C2C marketplace is continuing to grow, as more startups have entered the space to facilitate C2C transactions. Many companies target niche markets and list specific products to attract unique consumers. For example, Tokopedia, one of Indonesia’s largest online marketplaces, is a C2C retailer that provides a platform on which entrepreneurs can open small and midsize C2C enterprises for free. As of May 2018, this leading retailer had approximately 143.1 million visitors. Another would be the rise of apps like Letgo and Offerup that allow consumers to sell to their neighbors. Letgo boasts 75 million downloads and 200 million listings since 2015.
Even Facebook Marketplace is in on the rise of C2C platforms. It is now being used by more than 800 million people in 70 countries, and it only connects you to people near your location. According to the CEO Mark Zuckerberg, one in three people uses the platform. Its popularity might be attributed to the fact that it’s free, when other services, such as eBay, take a transaction fee on sales.
While you might think the opportunity for creating a new C2C platform is low, due to the massive platforms already created, there will always be “niche” opportunities within very large markets or industries. Let’s look at a few potential examples:
Expert skills or education acquisition: For example, if you were a digital marketer and you did not know what you needed to know about a certain new tool or platform, would you pay $35-50 an hour dollars to have the opportunity to sit in a coffee shop for one hour with a resident expert, either in person or via online chat? There is only so much the universities of Google and YouTube can teach you. Experts can deliver the same information but with more context and experience.
Book publishing services: The industry of self publishing a book has exploded in the past ten years. In 2014, there were about two million Kindle titles. Today, there are over seven million! Yet this industry remains amazingly fragmented. There is no number one platform on a global basis. What would you pay, per hour, to have someone help you start, design, edit and market your book?
Explore a potential hobby: With the rise of Uber, AirBnB and Etsy, we are getting used the idea of almost perfect strangers meeting our needs. This will continue to progress as we look to live well and create more experiences. So, who better to learn from than a local expert when you want to learn to learn to cook, kayak, surf, mountain bike, play tennis, etc. Think of it as a “Tinder” for local experts teaching locals.
Just when you think there can’t be any more solutions for what looks like a crowded C2C marketplace, a new C2C platform will rise. Connecting consumers to consumers is a powerful marketplace platform that entrepreneurs everywhere should be examining for potential opportunities.
April 29, 2019 at 12:17PM
Forbes – Entrepreneurs