From Japan to the US — mobile classifieds Mercari
The last time we have been talking about the mobile classifieds Letgo, image analysis, product suggest, live product.
We all know mobile classifieds OLX, which make their earnings on Google Adsense and the premium listing. Today, let’s have a closer look at how the Mercari service from Japan works and it makes its earnings on?
Mobile classifieds Mercari for the private vendors (consumer to consumer) acting as the guarantor of payment and delivery of goods.
Mercari in figures
• Total investment: $ 116.6 million.
• Site: 6.90M visits/ month (July 2016)
• Over 50% of product proposals — are goods for women.
• Target audience: women aged 20 to 30 years.
• The members publish over 10 thousand of new ads daily
*data from the public sources (CrunchBase, SimilarWeb, public company data)
Product Offers on Mercari:
• Women’s and men’s Clothing & Accessories
• Children’s clothing, shoes, accessories
• Beauty and health
• Electronic appliances
• Sports and recreation
• Books and others.
How Mercari Works
After registration of the seller of goods may add an ad for the product: product photos, point out the price of the product and provide a product description (size, color and condition of the product — new or used), the city where the products are stored.
Mobile classifieds Mercari monitors the quality of private ads and DOES NOT allow for the goods from suppliers or manufacturers of products.
Under the order from Mercari service, the quality of the advertisements is monitored by the project service team of the 100 employees from Japan, the US and the Philippines.
I.e. the service is focused exclusively on trade between individuals (consumer to consumer). This is an important part of the Mobile classifieds Mercari business model.
Search and selection of products
In order to enable the quick search of the required product, a selection filter is applied based on the product parameters:
• by product category,
• by brand,
• to size,
• by price,
• sold goods (product archive catalog)
• who pays for the shipping of goods (buyer or seller of the products)
Product page where the pictures, description and product price + shipping rate are pointed out (the shipping is specified below).
Also on the same page one may ask the seller a written question about the product (specify the details), bargain and get the best price.
Under the request from Mercari service, the product placed is usually sold within the next 48 hours, i.e., the users willingly bargain to sell the products quickly.
Payment for Goods
The goods may be paid directly from the mobile application using a bank card or through PayPal payment service.
The payment is transferred to the seller only after the goods have been received by the buyer, and the buyer has provided a rating (a review of the product) for the seller.
Shipping of Goods
The delivery of goods from the seller to the buyer is carried out through a third party logistics company.
• Shipping in Japan: the Mercari service is technically integrated with the Yamato Transport, one of largest logistics companies in Japan. The product seller is automatically assigned a special bar code which is sticked onto the packing before the product is received at the Yamato Transport Servicing Centre.
• I.e., the seller is not required to point out the product details repeatedly, all the information on the shipping address, product weight and its dimensions is synchronized between the Mercari and logistics company.
• Shipping in the US: the Mercari service is integrated with USPS and FedEx logistics companies. The payment processing partner is the Braintree Payments company.
Revenue model Mercari
1. The commission of the Mercari service for Japan — 10% of the cost of sold goods.
2. As of 2014 the Mercari Service has enetered the US market and so far DOES NOT charge the commission for the cost of goods sold, attracting the seller audience.
3. The sharing of profit with the logistic company is presumed.
Mercari Service is focused exclusively on trade between individuals (consumer to consumer), where 50% of product offerings — are goods for women. It is an important specificity of the Mobile classifieds Mercari business model.
It is related to the fact that a woman selling her dress or shoes she is no longer wearing, can easily pay 10% as commission to Mercari for selling her products.
Also the women are sociable and can bargain and reduce the price by using the chat, which also stimulates the growth of sales and Mercari’s income.
Buyers are usually also women — i.e., Mercari may be attributed to women’s club. A woman always wants to look good and is constantly searching for new looks — which drives the sales.
Mercari Service presents LifeStyle consumer goods only, while NOT presenting such large scale categories as real estate, jobs, cars, etc., which are the growth drivers for OLX for example.
OLX and other market players should have no problems launching the payment and shipping of goods in the local markets, and I believe, for example, LetGo should implement it soon.