Published: May 23, 2014 Last updated: Dec 8, 2021 Yan Kulakov

With the development of eCommerce technology a number of sophisticated types of it and business models permanently grow. Initially, separation of marketplaces from eCommerce made a boom on the global market, today a new tendency is coming to the stage. Peer to peer marketplace platforms have become more wide-spread.

In this article we will go through the main types of eCommerce platforms, examples of P2P marketplaces and find out reasons why they are so popular.


What is a peer to peer marketplace platform?

Marketplaces in eCommerce imply the connection among vendors and customers. Their roles are clear and precise: one is a seller, second is a buyer. Peer to peer marketplace eCommerce platforms take place when vendors and customers may switch. One representor can use a platform in both ways.

This scheme has become popular especially in the C2C business model when people can offer to rent the things they have or sell used items. This happened not for nothing. There were favorable conditions for the appearance of such a type.


What are the examples of P2P?

For better understanding of what are these platforms, let’s turn to the examples:

  • Airbnb. This service is for travelers. It provides people with accommodation. People can rent a room for a lower price than in a hotel. Vendors there are other people, locals, who share their houses with other users of the service. However, contributors may become users as well when they go traveling.
  • Etsy. It is an international platform for artists. You can display your works there. But if an artist would like to buy any product of another artist, it means that he or she becomes a customer. A nice example of fast role changes.
  • Uber. It is a taxi service platform. As well as in two previous examples drivers can be clients and vice versa.
  • Poshmark and other second-hand goods marketplaces. A store where people can display and buy used stuff is always a nice example of a P2P marketplace. They might also be niche marketplaces that might increase its demand.

The main sign of P2P type is a possibility of fast switching between roles.

The CS-Cart company has the biggest portfolio on the Internet among other companies. If you are looking for more good examples, there are a vast range of them of different types in the CS-Cart portfolio.


Background of developing P2P scheme for a marketplace

Have you noticed that a number of online and offline projects related to sharing something have sharply increased? These are coworkings, colivings, freelance work and finally P2P platforms. This idea just swept over the countries and turned into a boom of P2P platforms. This is due to modern trends in society. It is a sharing economy that greatly influences the formation of the trend.

The concept of sharing economy is that it is better to use something collaboratively than to use it solely.

Collaborative approach made the biggest impact, though there some other factors that influence the business sphere and prompt P2P type:

  • Modesty as a trend. The young generation appreciates hedonizm and often looks forward to positive emotions. Collaboration helps to reach the desirable entertainments, living conditions, and life level easier. Furthermore, the minimalistic approach came as a kind of escapism that helps to reduce the hustle and bustle of reality. It helps to economize on materialistic things and decrease a bunch of stuff that is not usually needed.
  • Digitalization. In general eCommerce growth has happened due to pandemic and convenience of using an online environment. It provoked growth of new directions and branches of business, in particular, peer to peer marketplace eCommerce platforms.
  • Global glut of goods and services. The global market is full of services and products. The amounts of them are bigger than people can consume. When reducing goods consumption people follow pragmatic purposes. Why should they buy a new high-price thing when they have a possibility to take a used one with approximately the same quality?
  • Unstable economic situation in the world. Any changes and uncertainty of economics reflect in the demand and supply. For instance, instability of currencies leads to people’s desire to reduce their spendings.
  • Globalization. It contributes to our communication greatly. The more access to information people have, the more connected and collaborative they become. Trust among people is increasing and interrelationships become more advanced. Today people have become more easy-going than before.

All these tweaks have made the P2P type so popular.


What is the P2P’s place in the system?

eCommerce has clear classifications. Where is the place for P2P marketplaces in this huge system? As this direction is relatively young, there is something confusing about it. If we remember the classification by target audience, the way it looks reminds the way we write Peer to Peer: P2P. Indeed some specialists include it in the same list as B2B, C2C, and B2C models, others place it on the top as a separate feature of marketplaces. There are two ways of representing P2P marketplaces in system you can find in the Internet:

Nevertheless, we accept the second approach and present the following systems to give deeper understanding.


P2P can be classified by target audience:

  1. B2B—Business-to-business—products and services are presented by legal persons to other legal persons.
  2. B2C—Business-to-customer—legal person sells products and services to individuals.
  3. C2C—Customer-to-customer— The model when individuals sell to individuals.

P2P by the object:

This categorization can be more detailed than common marketplace classification. Generally speaking, there are services and physical goods, but division may be more complicated:

  • Products. Any types of products. Examples: Poshmark, Mercari, and Catawiki.
  • Apartments. Free or low-price housing. Examples: Couchsurfing, Airbnb, and Home exchange.
  • Education. Platforms for private tutors or displaying online courses. Examples: Teachable, Coursera, and Skillshare.
  • Money related. Loans and any other money transactions. Examples: Kiva, Kickstarter, and Fundrazr.
  • Skills. Any freelance work. Examples: Taskrabbit, Upwork, and Fiverr.
  • Car sharing. Services for car rent. Examples: Turo, Blablacar, and Drivy.

What are the pros and cons of a peer to peer marketplace platform?

Each type has certain pros and cons; P2P marketplace as well.

Benefits of creating a peer to peer marketplace platform:

  1. A safe-play strategy. There is no need to worry about shipping and good flow. The sellers and buyers are in one. In comparison with other marketplace types, a great part of fuss is reduced.
  2. Managing simplicity. Most tasks for launching a p2p marketplace successfully cannot be performed by one person. You need to hire specialists in different spheres to manage it. This requires a minimum effort from a marketplace owner.
  3. Scalability. A marketplace can grow easily. This type can be easily promoted to new levels. Set a certain marketplace strategy and follow it!

Challenges when launching and managing a such platform:

  1. Marketing spendings. Users choose platforms according to their popularity. You will need to make an effort to make it really sought after.
  2. Conflict saving policy. Direct contact between seller and buyer definitely may turn into conflicts and misunderstandings. You have to set an advanced and agile conflict saving police to satisfy both sides and keep them as future users of your platform.

The possibilities that P2P marketplace can offer are so appealing that they can cover the disadvantages. Moreover, there are specific pros and cons which are related directly to the P2P scheme. The advantages of starting a business are much more than that.


P2P services in figures

Sharing economy is growing and it is reflected in figures. The PricewaterhouseCoopers company claimed that key spheres which have a high potential for expanding are traveling, media streaming, car-sharing, staffing, and finance.

PwC claimed that the sharing economy will increase from US$15 billion to US$335 billion in 2025.

Matthias Heutger, Senior Vice President Strategy, Marketing & Innovation, DHL Customer Solutions & Innovation said: “The concept of sharing is nothing new, but today people can share assets and use sharing services at the speed and scale of three billion smartphone users worldwide. Naturally this started with high-value assets like rooms and cars, but the underlying concept can be applied to almost anything now."

Volume of transactions for P2P services in Russia in 2017 and 2020 (in billion Russian rubles), source

The graph shows a volume of transactions in the P2P sphere in Russia for a period from 2017 to 2020. In this example the C2C business model is considered. The volume of transactions is steadily climbing, which signals positive development of this field. The volume of transactions grows by 30-40% each year.

Given the estimates, the P2P services are in demand and their popularity will grow in the next few years in certain countries and globally, too.


How do you make a P2P marketplace?

The steps are definitely the same with launching any other marketplace. Start-uppers may confuse some steps and this may discourage them. To prevent mistakes, let’s turn to the right order of things. Briefly, there are 5 initial steps:

  1. Form a concept. Find demand of your audience and contemplate a relevant idea.
  2. Start MVP*. Test your idea by starting a cheap prototype of it.
  3. Attract sellers and buyers. This step should be implied before making a real business. You should form a community before investing money since this step may show how scalable and relevant your idea is.
  4. Launch a marketplace. You already have users, successfully functioning MVP, it is time for expansion. Start your business!
  5. Follow a certain marketing strategy. Hardly can you find a type which requires implementation of wise marketing strategy as P2P marketplaces so necessarily. A good marketing specialist can help in this matter.

* MVP is a minimum viable product—the prototype of the real product with minimum features. It should be launched as quickly as possible and have all the functions to work properly and allow people to display products and make purchases. The partner company which helps you to build a marketplace should have opportunities for expansion after testing MVP. CS-Cart Multi-Vendor is an excellent choice if you want to test MVP fast and cheap. Moreover, it has all possibilities for future development including individual customization and creating a marketplace app.

All schemes of launching marketplaces and business in general are very much alike. They vary in details. A comprehensive scheme is given at the end of this article.


Conclusion

All in all, P2P is a young but prospective field of eCommerce. Marketplaces of such a type are very popular and demanded. We go through the examples of successful P2P platforms. It is a great source of inspiration for start-ups. The next few years or even decades the growth will be stable. This is a fast developing and innovative sphere.

In this article we have mentioned major steps of starting a business. When launching a peer to peer marketplace eCommerce platform, do not forget to go through main steps to prevent mistakes and extra spendings.

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