Ethan Gaskill, a 29-year-old content creator, starts every day the same way: “When I wake up in the morning (most people pick up their phone and start checking Instagram), I look at Facebook Marketplace.”
Now that his Los Angeles home is furnished almost exclusively with second-hand items and a TikTok with more than 220,000 followers interested in his thrifted purchases, Gaskill trusts the shopping platform to be a reliable source for hidden gems: a thousand dollars Herman Miller light and hanging lamp he was busted for $400; a $5,000 bed from the same designer that he bought for 20% of the original price; and a mid-century Founders sideboard worth $4,000, which Gaskill got for $800.
“It gives people the opportunity to get really rare items or just unique items that they otherwise wouldn’t have had if they couldn’t get to a flea market or an estate sale. ” Gaskill shared Fortune.
Facebook Marketplace hasn’t just become a trusted source for LA’s thrift scene. It has made itself a real candidate to compete with renowned e-commerce sites. Facebook has grown into 3.07 billion monthly active users (MAUs) from the end of 2023, up 3% year-on-year. Of those, up to 40%, or 1.2 billion, are active users who shop on Marketplace, according to a March study report from Capital One Shopping.
Meta’s online second-hand market is already challenging the industry giants. Marktplaats eclipsed Craigslist’s MAUs years ago, with Meta CEO Mark Zuckerberg saying in 2018 that there 800 million Marketplace MAUscompared to Craigslist’s 55 million visitors in 2017. Amazon, on the other hand, had 310 million monthly users in 2023, per technical report, about a quarter of Marketplace’s MAUs. Marktplaats is the second most popular site for second-hand purchases, after Ebay, according to a Statista report 2022.
“This is a growth area,” said Charles Lindsey, associate professor of marketing at the University at Buffalo School of Management Fortune. “I wouldn’t be surprised if it actually overtakes eBay in three or five years.”
Amazon and eBay did not respond Fortune‘s request for comment.
From online garage sale to e-commerce giant
Marketplace’s astronomical growth is due in large part to the fact that the platform is easy to use and already linked to a site that so many people are already members of, Lindsey argued.
“There is a trust factor because it is associated with Facebook,” he said. “It has an easy-to-use interface. It’s integrated with Facebook Messenger, so it’s easy to go back and forth.”
Launched in 2016, Marketplace was originally a way to facilitate sales among neighbors, where most users would list a used item for sale at a reasonable price, and buyers would pick up the item and coordinate with the seller via Facebook Messenger about pickup and pay. But Marketplace grew into a formidable e-commerce platform, with one in three U.S. Facebook users on the platform by 2018. The pandemic saw Marketplace explode thanks to increased e-commerce and supply chain dependence and shipping delays that hampered traditional shopping.
“We see everyone from artisans making goods by hand to woodworkers and car salesmen flourishing,” said Deb Liu, founder and then vice president of Marketplace, told Modern retail in 2021.
By then, Marketplace had become a boon not only for frugal shoppers, but also for small businesses looking for unique selling opportunities. Springfield, Missouri-based Beautiful Fight Woodworking generated $168,000 of its $266,000 in 2020 sales exclusively through Marketplace sales.
To be fair, the platform is not without significant problems, especially as scammers and bot accounts have proliferated the site, leaving well-meaning buyers in a tough spot. One user from South Carolina claimed in February that it did scammed out of $18,000 after he put his 2016 Audi up for sale on Marktplaats. A 2022 thinkmonkey survey of 1,000 Brits found that one in six had been scammed on the platform.
“What happens offline often finds its way into online environments, and unfortunately that includes scams,” said Ryan Daniels, a spokesperson for Meta. told Wired. Meta said it is “working aggressively to quickly identify, disable and ban scams and associated accounts.”
Gen Z’s new favorite social media
Through its rise, Marketplace has won over a generation of young people who had largely turned away from Facebook.
“I look at it like it’s a social media app,” Dre Vez, a 25-year-old content creator, told me Fortune.
Vez spends about six to 12 hours a day on Marketplace, where he makes a living by “trolling” sellers by asking them to test the product via voice memos before uploading the interactions to TikTok for his 755,000 followers.
He sees Marketplace as not only fodder for fun videos, but also as a real social media tool for Gen Z and millennials, because it works quickly and is very stimulating.
“It’s the ability to have different interactions in a short period of time, where I could go to the Facebook marketplace and search for a bike, and I could reach seven to 10 different people and have all these conversations. at the same time,” he said.
Even on days when he can’t find a good deal, Vez finds some laughs on the site. Sellers have gotten away with offering used toenail clippers, toilet brushes and plungers — even a Dorito in the shape of a face for $10,000, he recalls.
Meta has taken note of its enthusiastic young users. While the popularity of Facebook among teenagers has decreased In the wake of TikTok’s rise, Facebook now has more than 40 million daily young adult users aged 18 to 29 in the US and Canada, a three-year high, with one in four using Marketplace, Meta said. Fortune.
For second-hand connoisseur Gaskill, who checks Marktplaats five to ten times a day, the platform is attractive to young people because it appeals to their desire for independence, to save moneyAnd protect the environment against the stresses of mass production and freight transportation.
“Given the conditions of the economy, but also the mentality of Generation Z, they like uniqueness and self-expression,” he said. “But they also really enjoy finding things for a good price.”
Find space to grow
But just because Meta has a growing fandom for its Marketplace platform doesn’t mean it’s a lucrative part of the business. Meta didn’t respond Fortune‘s request for comment on how it makes money through Marketplace, but marketing professor Lindsey suggests the company benefits from transaction fees for sellers, as well as increased attention to the website’s advertising.
“Overall, the more likely someone is to use Facebook Marketplace, the more likely they are to log into Facebook that many times per month,” he said. “Facebook then responds to this by allowing companies to pay for advertisements that then end up in my feed, in your feed.”
The EU’s European Commission alleged in December 2022 that Facebook and Marketplace are joining together and using data in a way that breaches EU competition rules, according to a December 2023 SEC filing.
Marketplace is an important facet of Facebook’s financial puzzle in part because its local exchanges are cheap, said Sucharita Kodali, retail analyst at market research firm Forrester, especially compared to Ebay, which requires a massive international infrastructure.
“It’s a huge transaction volume,” she told Fortune. “With that transaction volume comes some sort of necessary investment in a lot of automation, customer service, merchant management, merchant tools, etc.”
While Facebook Marketplace doesn’t require a comprehensive system to manage local transactions, it also means it probably doesn’t make as much money as its e-commerce competition. Kodali even went so far as to call Marketplace an “anti-commerce” platform because it has so many “buy nothing” groups and peer-to-peer exchanges. She took a similar position to Lindsey, arguing that the platform’s financial merit lies in better targeting ads to active users.
“It’s not really about like, ‘Let’s monetize the number of posts we see in the marketplace,’” she said.
Marketplace’s virtual garage sale vibes and the platform’s sense of community may not make Meta billions of dollars, but it’s exactly what keeps users coming back to the site.
“You never know when the next amazing thing is going to come along,” Gaskill said. “That’s the fun of it. That keeps it addictive.”
