what is the C2C e-commerce model – WAU
C2C is an e-commerce modality in which ordinary consumers, formerly just buyers, act as small merchants selling products and services to other consumers. But how does this “democratization” of trade really work and what opportunities and challenges does it bring? Read on and find out!
Consumer to Consumer, or Consumer to Consumer, commonly referred to only as C2C, is a business model in which two or more consumers carry out transactions directly. This practice is common in used fairs, auction houses and newspaper classifieds, but it only gained prominence with e-commerce platforms.
Companies such as eBay, Aliexpress, Mercado Livre and OLX helped promote this model by providing increasingly robust and secure virtual environments for ordinary people to exchange and market products with users from anywhere in the country or the world.
Today, C2C is one of the most important e-commerce models on the market, although it represents a small share in the total of online stores. Now understand how it all started, the innovations and features of the platforms and the huge potentials of this type of e-commerce!
How did C2C commerce come about?
In essence, the “consumer to consumer” model can describe primitive commerce, before the invention of legal entities. However, the term C2C emerged, in fact, as a reference for electronic commerce in which both parties, seller and consumer, are individuals.
At first, what the first platforms promised was the Digital Transformation of common direct sales, such as the exchange of goods between close people, classifieds, door-to-door trade, etc. Meantime, the development of e-commerce has expanded the possibilities for users in terms of visibility, publicity, reach and confidence.
In London, the Free Market has always been the main reference in C2C e-commerce throughout the model’s trajectory in the country. It started its activities in the London lands in 1999 and currently houses more than 200 million users, including individuals, companies and even major national and international retail brands.
Like international marketplaces, the Argentine company was also a pioneer in London by offering an online payment platform that expanded e-commerce functionalities and increased business security by also intermediating financial transactions carried out by the website.
How does this type of e-commerce work?
Although C2C describes a direct transaction between two end consumers, it depends on a third element for the business to happen. Like auction houses and car shows, C2C platforms are a meeting point for people who benefit from their popularity and resources to research, advertise, buy and sell products.
However, when we talk about e-commerce, these intermediaries are much more important, as they provide a professional purchase and sale infrastructure with advertising services, Digital Marketing tools and sophisticated payment mechanisms.
In Mercado Livre, for example, the amount paid by the buyer is transferred to Mercado Pago, the platform’s payment processing system, and only after confirmation of delivery and the customer’s conference, the transaction values are passed on to the seller.
This is just one of the innovations that have made these marketplaces more reliable and popular. We can also mention the improvements in security in online financial transactions, the increase in payment and installment options and, mainly, the expansion and innovation of logistics operations.
What are the main advantages of C2C commerce?
C2C platforms offer a wide range of resources to users and some of these advantages are worth highlighting. Are they:
- possibility to act as a seller and consumer;
- ease of finding and comparing different sellers in the same place;
- low or nonexistent disclosure costs;
- access to professional payment and advertising resources;
- large user community;
- national and international reach.
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Why are these platforms so successful?
C2C is often cited as the “third wave” of online sales, followed by B2B (business to business) and B2C (business to consumer) models, and its great differentiator is the power it provides to ordinary people.
Platforms instantly transform their users into digital entrepreneurs, without the need for legal records, vouchers or contracts, and still offer complete advertising and sales tools to advertise and market your products.
This type of e-commerce, therefore, is a great opportunity for ordinary people to get rid of items stopped at home, buy used products safely, make extra income from small sales or find more attractive prices with distant or smaller merchants.
In addition to C2C, the largest platforms also offer space for B2B and B2C companies, bringing together companies of all types, private sellers and millions of consumers in the same community.
Are there any C2C marketing strategies?
This is a good question: if the seller is not a company, but only a consumer selling items occasionally, does it make sense to talk about Marketing when it comes to C2C commerce?
The answer is yes. However, among all types of electronic commerce, this is the least studied. As in most cases they are ordinary people transacting used goods, there is a perception that these businesses happen in a “natural” way (word of mouth), even though, in practice, things don’t happen exactly like that.
Although the user who only wants to sell a few items is not willing to develop a complete Content Marketing strategy, for example, he relies on classified sites, social media groups, forums and the platforms’ own advertising tools to increase reach of your ads.
Some companies even offer guidance to their advertisers, literally educating them on good selling, negotiation and even SEO (search engine optimization) practices.
On the other hand, B2B and B2C entrepreneurs also see advantages in advertising their brands, products and services within these platforms, taking into account one of the successful principles of modern marketing: promote a company where your consumers are.
What are the challenges of this “new wave” of online businesses?
Like other segments of the shared economy, especially those led by large companies like Uber and Airbnb, platforms that facilitate the marketing of products and services among individuals are closely watched by authorities around the world.
The first challenge is to establish the barrier between small ordinary sales and active commercial activities that are subject to regulations and taxes. In addition to the apparent facility for evasion and scams, another problem is the absence of clear rules for the circulation of goods between countries that adopt different trade policies and laws.
Despite all this, there is no doubt that we live in an intriguing economic moment in which innovative business models challenge the status quo of large markets and promote a strong relationship of trust between individuals from different parts of the world.
The internet has become a real universe of entrepreneurial possibilities for people, brands, entities and governments, and it is essential to know these opportunities up close to develop the most appropriate strategies for each one of them.
Now that you know how C2C e-commerce works, read our article that explains the differences between B2B and B2C e-commerce!