During myinteractions with a young entrepreneur, who wished to scale his peer-to-peer (P2P) onlinemarketplace for used-goods, I found that the challenges faced by P2P startups are even more pronounced than those faced by other marketplaces.Such startupsdon’t have a defined user needs to fulfil and nor do they have a strong control over the quality of listings, a key attribute in building the trust and reputation to facilitate the transactions over the platform.
I worked with my mentee extensively to research and understand the growth opportunities in the P2P marketplace model and detailed 5 key strategies that ought to be deployed to make the P2P marketplace both sustainableandscalable in the long-run.
1. Focus on niche:
Early-stage startups in the used-goods marketplace tend to focus more on having a large product assortment and less on building a niche. After researching the strategies of other well-established P2P startups in Singapore and USA, I found that those ventures had a specific target audience (TA) to begin their journey with. They focused more on showcasing the products catering to the short-term, immediate needs of their buyers and less on the long-tailed products, purchased less often.
The combination of liquidity and vertical-specific reputation offers greater value than a horizontal platform. Displaying the products that command strong purchase intent among buyers, no matter how small the TA size may be, is an important strategy to adopt. For my mentee, the focus on gadgets and household appliances reaped great benefits, registering almost 3X growth in user transactions within eight (8) weeks.