Ethan Gaskill, a 29-year-old content creator, starts each day the same way: “When I wake up in the morning (most people pick up their phone and start checking Instagram), I check Facebook Marketplace. »
With her Los Angeles home furnished almost exclusively with second-hand items and a TikTok with more than 220,000 followers interested in her thrifty purchases, Gaskill trusts the shopping platform to be a reliable source for hidden treasures: a lamp and a Herman Miller pendant light worth a thousand dollars. caught for $400; a $5,000 bed by the same designer that he purchased for 20 percent of the original price; and a mid-century Founders dresser worth $4,000 that Gaskill got for $800.
@ethancgaskill the upgrade from 4 drawers to 12 is life changing #bedroomdecor #bedroomaesthetic #homedecor #facebookmarketplace #bedroommakeover
“It gives people the opportunity to bring home very rare items or just unique items that they wouldn’t have had if they weren’t able to go to a flea market or estate sale. ” Gaskill said Fortune.
Facebook Marketplace hasn’t just become a trusted source for the second-hand scene in Los Angeles. It has become a real contender to compete with well-established e-commerce sites. Facebook had 3.07 billion monthly active users (MAU) at the end of 2023, a 3% year-over-year increase. Of those, up to 40%, or 1.2 billion, are active users who shop on Marketplace, according to a March report from Capital One Shopping.
Meta’s online second-hand market is already challenging the giants of the sector. Marketplace eclipsed Craigslist MAUs years ago, with Meta CEO Mark Zuckerberg saying in 2018 that there were 800 million Marketplace MAUs, compared to 55 million visitors to Craigslist in 2017. In contrast, Amazon had 310 million monthly users in 2023, according to Tech Report, about a quarter of Marketplace’s MAUs. Marketplace is the second most popular site for second-hand shopping behind Ebay, according to a 2022 Statista report.
“This is an area of growth,” said Charles Lindsey, associate professor of marketing at the University at Buffalo School of Management. Fortune. “It wouldn’t surprise me if in three years, five years, it overtook Ebay.”
Amazon and Ebay did not respond Fortunerequest for comment.
From online garage sale to e-commerce giant
Marketplace’s astronomical growth is largely because the platform is simply easy to use and already linked to a site that many people are pre-existing members of, Lindsey explained.
“There’s a trust factor because it’s associated with Facebook,” he said. “It has an easy-to-use interface. It’s integrated with Facebook Messenger, so it’s easy to go back and forth.
Launched in 2016, Marketplace was originally a way to facilitate neighbor-to-neighbor sales, with most users offering a used item for sale at a reasonable price, and buyers picking up the item and coordinating with the seller via Facebook Messenger for collection and payment. But Marketplace has become a formidable e-commerce platform, with one in three U.S. Facebook users on the platform in 2018. During the pandemic, Marketplace has exploded thanks to an increased reliance on e-commerce and blockchain. supply, as well as shipping delays that hampered traditional purchasing. .
“We see everyone from artisans making products by hand to woodworkers and car salespeople thriving,” said Deb Liu, founder and then vice president of Marketplace. Modern retail in 2021.
By that time, Marketplace had become a boon not only for thrifty shoppers, but also for small businesses looking for unique ways to sell. Beautiful Fight Woodworking, based in Springfield, Missouri, generated $168,000 of its $266,000 in revenue in 2020 exclusively from Marketplace sales.
To be sure, the platform is not without significant issues, especially as scammers and bot accounts have proliferated on the site, giving well-meaning buyers a hard time. A South Carolina user claimed in February that he was scammed out of $18,000 after listing his 2016 Audi for sale on Marketplace. A 2022 thinkmonkey survey of 1,000 Britons found that one in six Britons had been scammed on the platform.
“What happens offline often shows up in online environments, and that unfortunately includes scams,” said Ryan Daniels, a spokesperson for Meta. Wired. Meta said it works “aggressively to quickly identify, disable and ban scams and associated accounts.”
Generation Z’s new favorite social network
Through its rise, Marketplace has won over a generation of young people who had largely turned away from Facebook.
“I look at it like it’s a social media app,” said Dre Vez, a 25-year-old content creator. Fortune.
Vez spends about six to 12 hours a day on Marketplace, where he makes a living by “trolling” sellers by asking them via voice memos to test the product, before uploading the interactions to TikTok for his 755,000 followers.
He sees Marketplace not only as a medium for entertaining videos, but also as a real social media tool for Gen Z and millennials because it is fast and very engaging.
“It’s the ability to have multiple interactions in a short period of time, where I could go to Facebook Marketplace, and I could look for a bike, and I could reach out to seven to ten different people and have all these conversations going on. same time,” he said.
Even on days when he doesn’t find good deals, Vez finds laughs on the site. Sellers managed to list used nail clippers, toilet brushes, plungers — and even a face-shaped Dorito for $10,000, he recalls.
Meta noticed its enthusiastic young users. While Facebook’s popularity among teens has declined following the rise of TikTok, Facebook now has more than 40 million daily users from young adults aged 18 to 29 in the United States and Canada, a three-year high, with one in four using Marketplace, Meta said. Fortune.
For second-hand connoisseur Gaskill, who visits Marketplace five to ten times a day, the platform appeals to young people because it appeals to their desire for independence, thrift and environmental protection against the pressures of production mass and freight.
“Given the economic circumstances, but also the mindset of Generation Z, they like uniqueness and like to express themselves,” he said. “But they also really like finding things at a good price.”
Finding space to grow
But just because Meta enjoys a growing fandom for its Marketplace platform doesn’t mean it’s a lucrative arm of the business. Meta did not respond to Fortuneto comment on how it makes money through Marketplace, but marketing professor Lindsey suggests the company benefits from seller transaction fees, as well as more eyes on the website’s ads.
“Overall, the more likely someone is to use Facebook Marketplace, the more likely they are to also log into Facebook as many times per month,” he said. “Then Facebook capitalizes on that by allowing businesses to pay for advertising that then appears in my feed and then in your feed.”
The EU’s European Commission alleged in December 2022 that Facebook and Marketplace combined and used data in a way that violated EU competition rules, according to a December 2023 SEC filing.
The marketplace is, in part, an important facet of Facebook’s financial puzzle because its local exchanges are inexpensive, according to Sucharita Kodali, a retail industry analyst for market research firm Forrester, especially compared to Ebay, which requires a massive international infrastructure.
“It’s a huge volume of transactions,” she told Fortune. “With that transaction volume comes some sort of necessary investment in a lot of automation, customer service, seller management, seller tools, etc.”
While Facebook Marketplace doesn’t need an elaborate system to handle local transactions, that also means it probably won’t make as much money as its e-commerce competitors. In fact, Kodali went so far as to call Marketplace an “anti-commerce” platform because it has many “buy nothing” groups and peer-to-peer exchanges. She took a similar stance to Lindsey, saying the financial merit of the platform is to help better target ads to active users.
“It’s not really about, ‘Let’s make money from the volume of posts we see on the marketplace section,’” she said.
Marketplace’s virtual yard sale vibe and platform community feel may not bring billions of dollars to Meta, but it’s exactly what keeps users coming back to the site.
“You never know when the next amazing thing is going to appear,” Gaskill said. “That’s what’s fun. That’s kind of what makes it addictive.
This story was originally featured on Fortune.com