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Understanding the C2C E-commerce Business Model

C2C E-Commerce

We have been familiar with the B2C (Business to Customer) e-Commerce business model, where businesses sell their product to customers via an online platform. The B2C e-commerce sector has recorded many success stories. However, we often underestimate the meteoric rise of C2C e-commerce in the past decade. According to McKinsey, many C2C marketplace startups have accelerated their growth during the pandemic.

What is C2C E-Commerce?

C2C stands for Customer to Customer. C2C E-commerce is an online platform where customers can buy and sell their products/services to each other. In this business model, e-commerce acts as an intermediary that facilitates transactions between customers. C2C e-commerce has contributed to many lives by making buying and selling products/services more accessible. Anyone can apply as a seller and is responsible for their business growth on this platform. Some famous worldwide C2C E-commerce companies are Amazon, eBay, and Alibaba.

Types of C2C E-Commerce

C2C E-Commerce is divided into two categories, marketplace and P2P.

1. Marketplace

The marketplace is where customers (not a brand) can sell their products or services with the help of an e-commerce platform as intermediaries. In the marketplace, people can sell and buy a product on an e-commerce platform such as Tokopedia and Shopee.

2. P2P/Classified

The next type of C2C e-commerce is P2P/Classified. In the P2P model, the customers can directly sell their products or services to other customers without e-commerce as intermediaries. Some of the common P2P platforms are Instagram, Kaskus, and OLX.

Advantages of C2C E-Commerce

1. Competitive products at a Lower Price

In running a traditional retail company, a business should spend more money on third-party actors to maintain and deliver their products/services to customers. On the other hand, C2C e-commerce removes the role of all middlemen in the transactions. Because of this, the seller can press their cost, which results in a lower price of goods.

2. Variety of Options

The C2C business model also helps buyers find the right product/service. Because of the easy entry nature of C2C e-commerce, the market is saturated by many sellers who compete to provide their unique products. This gives buyers more options for purchasing a product/service at a lower price.

3. Easy Access to Sell and Buy

In a physical store, people have a huge barrier to entering the market. One of the barriers is spending a lot of money to make a physical store. C2C e-commerce solves this by providing easy access to the market. Anyone can sell their products/services even without a physical store. The C2C e-commerce also helps buyers access products/services without having to go to many stores to find and pay for transportation.

Are You Interested in Building a C2C E-Commerce?

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