Consumer-to-consumer (C2C) shopping app growth slid 12% in 2021 from 2020, according to our Global Mobile Retailing Report looking at the calendar year 2021 and zooming in on Q4 2021. Our analysis, which covers global shopping leaders and then the specific U.S. commerce categories (Brick n’ Mortar, D2C, etc.), found the Top 15 C2C apps to be the worst-performing market. After a 15% growth spurt in 2020 – which encouraged then top performer Poshmark to go public – what happened?
Well, as we near the end of our article series on each U.S. shopping category, the 2021 American shopper’s wants and needs are made pretty clear by the top performing apps:
- Buy now, pay later options (BNPL)
- In-app order/delivery tracking (to see the, ideally, fast and free shipping)
- Buy online, pick up in store (BOPIS)
- Recommendation engines
- Augmented Reality (AR)
(Based on the data, I would rate the first two a “need”, the latter two a “want”).
Structurally, C2C shopping apps have limitations with almost all of the above. The companies that do offer them are standout in the category:
Etsy and Vestaire Collective are the only Fastest Growing C2C Apps with positive growth. Both offer BNPL and digital wallet options at checkout. Etsy’s smaller sellers were able to offer potentially faster shipping than the large outlets relying on the delayed cargo ships this past 4Q 2021. Vestaire Collective also gets points for logistics: shoppers see where the item is located as they are browsing (i.e. second hand Jimmy Choos from a seller in Milan). It offers fast, free shipping if the buyer is willing to opt out of item authentication. Both Etsy and Vestaire Collective built recommendation engines into the app.
Poshmark declined 10% after its $3B public market entrance in January 2021. It represents another part of the market. Rather than “Artisans” and Luxury item owners, the everyday person can sell clothing, accessories, select home and even pet goods that are in good condition. In 2020, Poshmark did arguably the best to attract the sellers who may have been laid off and were able to resell full time. It’s app updates in 2021 were majority aimed to improve the seller’s experience versus the buyer, adding video listings and seller ‘status’ badges for profiles. However, the app lacks a recommendation engine and only rolled out Affirm for purchases between $50-200 USD starting in July. Like its peers Mercari, Curtsy and ThredUp in the – let’s call it ‘everyday’ C2C subcategory – the United States Postal Service is the supply chain.
Mercari and OfferUp stand out as two of the Most Downloaded C2C apps, and OfferUp ranked fifth for Shopping apps overall in 2021. They are also of the ‘everyday’ seller variety but sell consumer goods beyond just clothing and accessories. What did they do to appeal to the 2021 shopper?
Both offer Local Pickup to diversify delivery methods. OfferUp’s is straightforward – the C2C shopping app version of Buy Online, Pay in Store, if you will. Where the store is your seller’s location.
Mercari, on the other hand, partnered with Uber to power Mercari Local and ‘no meetup’ delivery. Uber matches nearby delivery people with Mercari purchases. No packaging is required, so it lends itself nicely to furniture sales. Mercari also added BNPL options in an exclusive deal with Zip (formerly QuadPay).
While the market is down for C2C apps, innovation is coming around. The challenge in 2022 will be to catch up to the mobile trends that Gen Z wants to see. Fast Fashion apps capture this audience and our recent analysis points to social commerce, recommendation engines and gamification/ tokenization of Rewards currency, as the sticky features for this generation.
I’m curious to watch Curtsy, who is at the bottom of this year’s Top 15 market, but with a strong cohort of Gen Z users (21% compared to 13% for both Mercari and Poshmark). It launched a recommendation engine that resulted in a 300% download spike in January and followed that up with an $11M Series A funding round and release of an Android app.