The circular economy is in full swing, and for an excellent reason: with finite natural resources on the planet and the demand for resources exceeding what the earth can regenerate each year, we simply cannot carry on with our current linear production path.
The circular economy aims to transition into consuming less natural resources by reusing, resetting, upgrading and recycling products, giving items we’ve fallen out of love with a chance for another day in a new home.
The resale of used items – an integral part of the circular economy – is booming as people grow more accustomed to buying second hand. Resale has grown 21 times faster than the retail apparel market over the past three years and is on the way to become larger than fast fashion by 2028, according to a thredUP and GlobalData report.
And what better place than online marketplaces for second-hand trade. Indeed, the rise of the conscious consumer has become a perk for marketplaces. With the re-selling of used items, marketplaces are playing a considerable role in the circular economy and its sustainability concerns. In 2018 in France, Le Bon Coin users potentially saved 7.7 million tons of greenhouse gas emissions and 431,992 tons of plastic according to a report by Schibsted and Adevinta.
Buying and selling second-hand items has been favored for numerous reasons. If people can find what they want for less money, they’re likely to purchase that item even if it’s been used. Additionally, the rising awareness surrounding the climate crisis and sustainability issues over the past few years has boosted second-hand selling and buying. Producing less waste and consuming resources responsibly is growing higher in people’s agendas, in turn, increasing the popularity of online marketplaces.
Increased risks for your online marketplace
However, with that rise, comes increased risks for your online marketplace, as more fraudsters will be attracted to your site seeking to deceive your users.
Fraud can jeopardize your user trust and ultimately scare off your customers. In the luxury resale market especially, the sale of counterfeit goods has increased over the years. It’s then essential for online marketplaces to establish strong user trust, particularly in the trade of secondhand items.
In a two-sided marketplace, buyers have to trust that sellers describe the items on sale accurately and that they will eventually receive their goods. In the same way, sellers have to trust that buyers provide payment in good and due form.
You should make sure to protect your user trust and tackle these challenges head-on by putting efficient and accurate content moderation processes in place.
Featuring poor or fraudulent content on your marketplace has a cost. Fraudulent activity on your marketplace can have disastrous effects on your reputation and the trust users have in your platform.
Second-hand is not a fad, and resale is turning to the mainstream. Marketplaces need to find new ways of dealing with fraud as the demand for the second-hand trade grows.
To learn more about how you can protect your users from fraud, have a look at our article about the different types of content moderation we offer to protect your brand.