C2C Market

C2C: Meaning, Function & Types 

The C2C business model allows consumers to trade products or services with each other on a third-party platform. Learn what C2C is and how it works.

The C2C segment saw significant growth during the COVID-19 pandemic. Its momentum has continued. Even as the effects of COVID-19 have lessened and the world has returned to normal, the C2C market continues to expand.

But what is C2C, and how does it work, particularly in eCommerce? Find out.

What Is C2C? 

C2C is a form of eCommerce where consumers sell goods or services to other consumers via online platforms. In these C2C transactions, the online platform serves as a mediator but does not own the goods or services being sold.

The C2C business model is expanding, thanks to the greater turn towards secondhand goods. Its development could potentially be attributed to rising environmental concerns and a shift in consumer preferences toward second-hand products.

At ECDB, we include a C2C marketplace in our scope only if its B2C (Business-to-Consumer) segment is expected to be larger than its C2C segment (e.g., eBay and Taobao). Pure C2C marketplace platforms are not considered. A typical example of a pure C2C marketplace is a classifieds site, where sellers and buyers arrange to meet offline to complete the transaction.

How Does the Consumer-to-Consumer Model Work? 

C2C involves the usage of a third-party website or a platform where one consumer buys or sells products to another consumer.

C2C provides sellers with numerous incentives, one of which includes higher margins owing to the absence of retailers and wholesalers. However, platforms on which sellers list their products often charge a fee, for example eBay. This results in a growing preference for platforms with no charge.

C2C is especially convenient for sellers. The requirement for a brick-and-mortar shop has been fading away in the post pandemic world. All C2C sellers can list their products online which can be easily viewed by buyers. Thus, it facilitates a convenient, seamless and accessible way of conducting business.

What Are the Types of C2C Platforms? 

Types of C2C platforms include:

1. Auction platforms: It involves a seller listing products which are auctioned on the website. The seller sets the minimum price, after which potential buyers bid against each other. eBay is a good example of it.
2. Exchange of Services and Goods platforms: Platforms like Fiverr facilitate the exchange of services ranging from fitness mentors to cooking lessons, serving as a one stop shop for freelancers located in any nook of the globe. Etsy, the well-known eCommerce platform for handmade products, also serves as an example for an exchange of goods platform. Exchange of goods platforms are considered the most popular within the C2C categories, as the growing popularity of Facebook and Amazon’s marketplaces underlines.
3. Payment platforms: They are less popular in the C2C realm. People often associate C2C with the absence of any third-party. However, C2C requires the audience base and credibility that third parties bring with them especially for sensitive activities such as payments. PayPal is popularly used for C2C transactions globally.

Limitations of C2C 

As the market demand for C2C products grows, especially in the second-hand market, so does the number of C2C platforms.

However, as the market grows, the number of counterfeits, defective and low-quality products sold are on the rise as well. Additionally, the lack of payment processors and limited customer service availability negatively impacts the customer experience.

In conclusion, the C2C market is far from maturity, it is still evolving with the dynamic changing consumer demands. The market presents consumers with low-cost products, especially in the second-hand market, which can often result in a trade-off between price and quality.

As many new players continue to enter the C2C space, it will be interesting to see whether the established companies can retain their market position in the years to come.

C2C: Key Takeaways 

• C2C, customer to customer, is a market type where individuals sell goods or services to other individuals. The onset of Covid-19 intensified and accelerated the growth of the C2C market, solidifying its position in the global market.
• C2C marketplaces have higher margins due to the absence of retailers. However, sellers are required to pay platform fees when utilizing a third-party website to list their products.
• The 4 major C2C categories include Auction, Exchange of Services, Exchange of Goods and Payment platforms of which exchange of goods is the most popular.
• The C2C market is growing rapidly, which provides users with more options but also raises concerns about product authenticity.