The Blessing of a Secondhand Marketplace in the Midst of a Pandemic

Indonesia officially entered the recession in the third quarter yesterday. However, there are always bright spots in the economy. It is a second-hand business (secondhand/preloved) which is used by many people to get additional income by reducing the contents of unused items at home.

This industry is part of e-commerce services. Report e-Conomy 2020 compiled by Google, Temasek, and Bain & Company, shows that the GMV of the e-commerce industry in Indonesia rose 54% to $32 billion in 2020, from $21 billion last year.

This drastic growth momentum is reflected in the five-fold increase in the number of local suppliers trying to sell online due to the pandemic. It is predicted that by 2025 the industry will soar to $83 billion, up 21%.

In Indonesia, players marketplace These used goods are divided into two main segments, namely automotive and non-automotive. Those who specifically entered the used automotive market are OLX (creating a new business unit through the acquisition of BeliMobilGue / OLX Cars), Mobil123, Carmudi, RajaMobil, Oto.com, Garasi, Momobil, Seva, Carsome, Carro and many more.

Meanwhile, non-automotive players are dominated by those who focus on fashion, beauty, health, children's equipment, some even niche product specific high-end from well-known brands. The names of players included in this area are Tinkerlust, Carousell, Hunt Street, Banananina, The Brand Buffet, and Second Chance.

DailySocial had the opportunity to interview three players marketplace used goods, namely Tinkerlust, Carousell Indonesia, and OLX Indonesia to see how the pandemic has impacted their business.

He's enthusiastic again, even though he was lethargic

Co-Founder and CEO of Tinkerlust Samira Shihab admitted that the company did not feel a significant impact from the pandemic. Number listing received (inbound) is in the normal category, except for the first two months of the pandemic, namely April and May, which decreased.

“But now it has returned to normal, even more than before the pandemic. In terms of Sales"We see that GMV is still stable," he said DailySocial.

Samira assumed the decline occurred because companies closed during the PSSB and quarantine period. After the company announced it was open as usual, listing those that entered returned to normal numbers. "Category listing top of Tinkerlust is clothing. The top 3 in this category are blouses, mini dressesand pants. "

Tinkerlust also captures new ways consumers consume content. Samira said, before the pandemic consumers enjoyed marketing methods and content that focused on the products or services offered. But now, consumers are paying more attention to content engaging and entertaining.

From there, the company began changing its social media and marketing strategy to stay relevant to its audience's interests. "We also see a lot retail which is usually more focused on offline, now there are more often online activation and that's why Tinkerlust has to be more creative with content, more often with online activation interesting and permanent engaging. "

The same condition also occurs in Carousel. Carousell Indonesia Country Marketing Manager Elsa Indah Pertiwi revealed that at the beginning of March, when Covid-19 entered Indonesia, there was a decrease in the number of listing due to the uncertainty of the pandemic.

However, one month later, there was an increase traffic a significant part of the overall activity on Carousell. More users are searching for items, browsing, shopping, or comparing prices.

“Since Carousell was first launched in Indonesia, the fashion category has become a category with numbers listing highest, following category health & beauty and babies & kids. but, at the moment we saw a significant increase also in the electronics and home & furniture," added Elsa.

The increase in this category, he continued, is in line with changes in consumer habits with the new normal. Since working from home, many Carousell users want to renovate their work space to make it more comfortable.

In addition, learning in schools has now shifted to online requiring students to have electronic devices such as laptops and folding tables to support these activities.

Elsa did not explain further the contribution of Carousell's business in Indonesia compared to the seven other countries where they operate. Carousell is one of them marketplace The largest used goods company in Southeast Asia, headquartered in Singapore.

Across eight operational countries, Carousell recorded more than 250 million listing and tens of millions of users since it was first released in 2012. The company entered Indonesia in 2015.

Meanwhile, OLX Indonesia explained that last October there was an increase in numbers listing more than 15% for electronics & gadgets, property, hobbies & sports, compared to the beginning of the pandemic. "Meanwhile, from the demand side alone, there was an increase of more than 10% in the car, motorbike and property categories for the same period," explained OLX Indonesia Marketing Director Ichmeralda Rachman.

Melda, Ichmeralda's nickname, explained more about the impact of the pandemic on OLX Autos, rather than other categories within OLX Indonesia. He quoted from a study conducted by OLX Autos entitled "Sentiment Monitoring" which was launched during the pandemic, showing that there was an increase of 15% -20% in demand for the used car category since the relaxation of the PSBB.

Future marketplace secondhand

Melda continued, the results of the study also showed that 52% of respondents had the desire to buy a car compared to only 22% at the start of the pandemic. Then, as many as 43% of respondents chose to use private cars compared to only 33% at the start of the pandemic.

“If you look at it from listing and demand classified ads and also the results of the OLX Autos study, OLX Indonesia believes that in the used car category, there is still great potential that can be developed."

OLX Indonesia has the ambition to make OLX Autos a leading player specifically working on the used car market, while simultaneously building the ecosystem in a better direction. So far, the innovations they have presented start from OLX Instant Car Selling, OLX Authorized Dealer, and OLX Autos Sell-Buy-Exchange.

The latest innovation (Buy-Buy-Exchange) was released in the midst of the pandemic. Melda said, this feature facilitates customers in selling, buying and trading in used cars. Previously the experience of consumers being able to view inventory online, now customers can view it directly in offline stores.

Quoting a different report, "The New Normal of Indonesia Used Car Industry", he showed that more than 60% of respondents said the recovery would last more than three months. However, it is hoped that the used car industry will start to recover in 2-3 months with a form of recovery v-shape, which is generally characterized by a sharp rise to the top of the curve after a sharp decline.

“The used car market still has it market specifically for Indonesian society. "With the Covid-19 pandemic, quite a few customers are starting to consider having their own vehicle, rather than using public transportation for daily activities."

On the other hand, Samira explained, over the past few years, there has been a trend thrifting are mushrooming again on social media, especially Instagram, with their own characteristics. “We also see more consumers aware with sustainability and smart shopping. For us, preloved shopping "There are many positive sides because it has a positive impact on the environment, is more cost-effective, and provides a different experience from shopping for new products."

All of these positive sides are considered very attractive to millennials and it is possible that businesses like this will remain popular in the next generation.

Elsa also added that for second-hand goods sellers, this pandemic era has made the economy in Indonesia less stable, she is confident in business pre-loved will increase as platforms like Carousell can help people earn additional income.

“In addition, there are economic limitations [in] making products pre-loved will become increasingly popular. [The price] is lower than retail prices, but you can get quality that is not much different.”

Deep dive into business processes

Compared to similar players, the approach taken by Tinkerlust is a little different. The company's business processes are similar to the concepts used by players preloved marketplace United States, thredUp, because they maintain a strict curation process, have their own warehouse for procurement, and ship to buyers.

Samira explained that anyone could "entrust" goods to Tinkerlust. You can do it drop in go directly to the office or be picked up by a courier. Scheme pickup have special provisions. If located in Jabodetabek the minimum is 15 pieces, while in Bandung, Surabaya, Makassar and Medan the minimum is 20 pieces.

Next, incoming items will be curated. If it doesn't pass, it will be returned to the seller. Meanwhile, those who pass will enter the studio to be photographed. After that the goods will be stored in warehouse located in their office.

“Products that pass the curation will be given a price recommendation. If the seller feels the price is not appropriate, seller can change prices directly on seller dashboard. Once the price is determined, the product will be available soon live di website Tinkerlust.”

After the goods are sold, funds will be given to the seller in the second week of the following month. Commission distribution is adjusted to the price range of the item.

DailySocial also interviewed one of the Tinkerlust service users. Corry, who joined as a seller at Tinkerlust in 2019, felt very helped by their services. The Tinkerlust business model is suitable for busy people who don't have time to monitor their online sales, let alone have to send them to logistics couriers.

“It's simple, because it's not a hassle, the business model suits the same gue. From sending the item until it appears on website, all taken care of with Tinkerlust.”

He realized that all these conveniences made the commission quoted by Tinkerlust relatively large. Rejected items will be sent back by the Tinkerlust team at no additional cost. In terms of curation, it is quite strict. A small stain can result in an item being rejected.

Despite all the advantages and disadvantages, Corry still chooses Tinkerlust as the main choice rather than the marketplace platform or via Instagram.

"You don't need to think about anything, just check how many items have been sold. Just receive it every month revenue. If you sell it yourself, just taking product photos and curating it will take time, not to mention more running the account is for buyers to see."

Meanwhile, the Carousell concept is the same as most marketplace other used goods. Users canlisting own products to be sold and paid advertising options are available if you want to get to the top of the list.

Elsa explained that the company had observed that its users in Indonesia tended to buy and sell listingbetween cities. Not forcing transactions to occur on the Carousell platform.

“We give them the freedom to handle their own deliveries and pay via bank transfer. All of this aims to make it easier for buyers and sellers to connect on the platform and have the flexibility to handle things as they wish.”

The company has actually collaborated with logistics services and provided discount vouchers that can be used to reduce shipping costs. Apart from bank transfers, there are actually methods cash on delivery (COD) is also still popularly used.

However, according to Elsa, this method is usually used for purchases related to high-priced goods, such as electronics and furniture. The tendency of consumers to choose to examine the goods before buying them.

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