APAC auction sites buy into B2C space

Consumer-to-consumer (C2C) e-commerce and auction sites have evolved to offer fixed-price listings and operate on a business-to-consumer (B2C) selling model, as demand for C2C buys wanes.

Praveen Sengar, principal analyst at Gartner, said consumer e-auction sites have moved from a pure C2C model to include B2C e-commerce offerings as they realize they cannot remain dependant on one channel of online shopping.

Using Chinese e-commerce site Taobao Marketplace as an example, Sengar said the platform started out as a C2C marketplace with consumers selling second-hand products to other consumers. As sellers begin peddling new products, rather than used items, the platform evolved to allow sellers to create their own stores online, he noted.

A spokesperson from Alibaba said consumers were first introduced to online retail through the C2C model almost 10 years ago. Since then, B2C platforms and independent B2C retail Web sites have sprouted to cater to a more diverse Chinese consumer, she said.

While C2C-focused Taobao Marketplace has an auction area, the majority of listings on it and Alibaba's B2C retail site, Tmall.com, are fixed-price listings, the spokesperson said.

eBay is seeing a similar trend for its Asia audience. Daniel Feiler, director of communications for Asia-Pacific at eBay, said the Web site has evolved since it was set up over 16 years ago. "Today, auctions only make up around 30 percent of the eBay marketplace business. The majority [of products] are sold via fixed price or 'Buy It Now' sales," he said.

Feiler added that seller profile on eBay has also changed, with B2C players now the dominant sellers. "This is especially the case across eBay's businesses in Asia," he added.

Noting that Taobao Marketplace is not just a basic C2C online shopping platform, Alibaba's spokesperson said the site includes industry-targeted product categories for travel, real estate, insurance, e-book and video, as well as social networking features and lifestyle services.

C2C output behind B2B, B2C
In contrast with business-to-business (B2B) and B2C e-commerce, C2C e-commerce in Asia has the smallest market share at about 10 percent of total e-commerce Web sites, said Sengar.

B2B e-commerce bags the largest market share due to the higher volume and transaction value of industry products, with many businesses buying from China, he explained. He added that B2C e-commerce is higher than C2C as customers are more comfortable buying directly from a brand or a business, than buying from an individual.

He noted cases where consumers would buy products which were defective or were different from what they had ordered from individual sellers, and had no proper recourse for refunds.

Singapore-based student, Adrianna Tan, has stopped buying from C2C auction sites and does the majority of her online shopping at blogshops and online retail stores such as ASOS and Forever 21.

However, Tan does buy directly from consumers who market on forum postings. She said she found it easier to negotiate prices through text messages or e-mail messages directly with sellers on forum postings, than those on C2C auction sites.

Still a role for C2C e-commerce
Despite its smaller market share, Sengar said C2C e-commerce still plays an important role for consumers and online shopping sites such as Taobao.

For consumers, C2C sites offer a secondary market and those who have bought a new device might decide to sell their older device on such sites as they have no longer have use for it, he added.

Buyers also purchase second-hand devices to be refurbished and resold at a higher price, generating a "reasonable amount" of profit, he said. Thus, it is important for e-commerce players to retain a C2C platform to provide consumers choice and the option to buy new products from B2C companies or buy second-hand items from other consumers.

Retaining or setting up a C2C platform also allows the e-commerce player to offer payment services, Sengar said, pointing to eBay which owns payment provider Paypal and Alibaba which is affliated with Alipay.