What is 'Customer To Customer (C2C)'?

Customer to customer (C2C) is a business model whereby customers can trade with each other, typically, in the online environment. Two implementations of C2C markets are auctions and classified advertisements. C2C marketing has soared in popularity with the arrival of the internet, and companies such as eBay and Craigslist.

BREAKING DOWN 'Customer To Customer (C2C)'

At its most basic level, C2C represents a market environment where one customer purchases goods from another customer using a third-party business or platform to facilitate the transaction. C2C businesses are a new type of model that has emerged with ecommerce technology and the sharing economy. The advantage for customers is that they benefit from the competition for products and they can often find items that are difficult to find elsewhere. In addition, margins are high for sellers because there are minimal costs due to the absence of retailers or wholesalers. C2C sites are convenient because there is no need to visit a brick-and-mortar store. Consumers simply list their products online, and the buyers come to them. In the case of eBay, items are shipped by the seller directly to the buyer.

Revenue and Growth of the C2C Market

C2C websites and similar platforms make money from fees charged to sellers for listing items for sale, adding on promotional features and facilitating credit card transactions. These C2C transactions typically involve products sold through a classified or auction system, and the products sold are often used.

The C2C market is projected to grow in the future because of its cost-effectiveness. The cost of using third parties is declining, and the amount of products for sale by consumers is steadily rising. Retailers consider it to be an important business model because of the popularity of social media and other online channels. These channels showcase specific products already owned by consumers and increase demand, which drives increased online traffic to C2C platforms.

However, C2C has some problems, for example, lack of quality control or payment guarantees. Is some cases, credit card payments may not be supported although the emergence of PayPal and other payment systems over the years has helped to simplify payments on C2C platforms.

Example of the Rise of C2C

The C2C marketplace has increased over time as more companies have entered the space to facilitate C2C transactions. Many companies target niche markets and list specific products to attract unique consumers.

For example, Amit Lakhotia, former vice president of payments at Paytm, left his position in January 2016 to pursue other ventures, one of which was Tokopedia, one of Indonesia's biggest online marketplaces. Tokopedia is a C2C retailer that provides a platform on which entrepreneurs can open small and midsize C2C enterprises (SME) of their own for free.

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