P2P marketplace Carousell launches in Australia
One of Asia’s biggest mobile classifieds marketplace, Carousell, has officially launched today in Australia.
The Singapore-based startup has raised over $54 million in funding to date from some of the world’s leading venture capitalists, including Rakuten Ventures, Sequoia Capital and 500 Startups.
That backing has allowed Carousell to rapidly expand its brand presence in the past year, with local hubs operating in Singapore, Malaysia, Indonesia, Taiwan, Hong Kong, the Philippines and now Australia.
Speaking to Internet Retailing, the co-founder and president of Carousell Marcus Tan explained why Australia is the perfect market for a new buying and selling app.
“If you look at the classifieds landscape in Australia, mobile is nowhere. It’s still very much a desktop-first process with Gumtree, but if you look at the people, everyone’s on a smartphone,” he said.
With one of the highest smartphone penetration rates in the world and an e-commerce market estimated to exceed $24 billion by 2018, Australia is proving an attractive market for companies that help consumers offload their old clothes and furniture to make room for new purchases.
And Carousell isn’t the only business angling for a foothold in this market, which up to now has been dominated by international classifieds site, Gumtree. Facebook Marketplace and Shedd, a fashion-only peer-to-peer marketplace, both launched in Australia in October.
Nevertheless, the Carousell co-founders say they welcome the competition.
“Any other competition that comes up is validation that there’s a problem that needs to be solved. That encourages us to stay focused on the problem,” Tan said.
That problem, according to Carousell, is the rising amount of waste due to increasing consumption.
“E-commerce is on the rise and people are buying more stuff, but the buying and selling platform has not caught up. Classifieds are still on the desktop,” Tan said.
“We want to make it easier for people […] to connect with someone who has a use for their under-utilised stuff. It’s our goal to have every single person adopt such a lifestyle.”
The idea for Carousell came about when Tan and his long-time friend Quek Siu Rui met Lucas Ngoo in Silicon Valley as part of a year-long university exchange program in 2012.
The three entrepreneurs interned at a tech startup and took classes at Stanford University where they bonded over their passion for solving global problems through technology.
“We had the same passion for technology and building products,” Siu Rui told Internet Retailing. But it was only after returning to their home countries, Tan and Siu Rui to Singapore and Ngoo to Malaysia, that they built a prototype for what would become the Carousell app and entered it in a university startup competition.
“[Afterwards] a couple hundred people gave us their email address and they were tweeting at us, ‘Can I download the app right now?’ It was great validation for us because it meant we were solving a problem that people had,” Siu Rui said.
Still, getting people to use Carousell at first was a challenge for the three entrepreneurs, who chalk it up to their inexperience. “When we first launched, our tagline was, ‘The marketplace you love’. We were marketing to everyone but to no one at the same time,” Tan said.
A mentor advised the young entrepreneurs to identify their most active users, young women buying and selling fashion items, and target them almost exclusively.
“Once you choose an early adopter to focus on, it influences all your actions. You focus on the right limited categories to build supply, then you focus on the right channels to build demand, and that’s how you get that network effect going,” Tan said.
It’s a model that Carousell has followed in every new market it enters, including Australia. And while Tan and Siu Rui say there are certain similarities in every market – the biggest category at launch is almost always fashion, for instance – they stress the importance of localisation.
“We’re a very local, community-based marketplace […] and that involves speaking to users. My first trip to Melbourne one year ago, I went to the Camberwell market […] to find out whether there was a need for a service like ours,” Tan said.
“That’s how we started in Singapore too.”
With that local approach in mind, Carousell established a Melbourne office earlier this year. The two-person team is based out of a co-working space in the CBD and is responsible for community management and marketing.
Carousell’s staff of 80-plus people in Singapore provides engineering, customer support and product marketing.
Since soft launching in earlier this year, Carousell has seen 20 per cent month-on-month growth in the number of listings and 29 per cent month-on-month growth in the number of transactions through its app and desktop site in Australia.
As the classifieds company ramps up its local marketing efforts, Siu Rui said he hopes to see over 30 per cent month-on-month growth. Carousell users already spend 17 minutes per day on the app on average, a metric that Tan describes as “almost Instagram-like.”
Carousell is betting on its user-friendly features to drive adoption. “We took the best elements from the apps we use all the time like Instagram and WhatsApp and applied them to buying and selling. If you know how to use the core functionality of a smartphone, you know how to use Carousell,” Tan said.
The company is doubling down on its user experience, with plans to hire 30 new engineers early next year. “We want to improve discovery, personalisation, community. […] Typically you go to a classifieds site when you want to buy something, but we’ve created an almost browsing experience,” he said.