Facebook Marketplace stealing eBay, Gumtree market share

Facebook Marketplace is stealing market share, with sellers providing a different service to eBay and Gumtree. Here’s how.

Facebook Marketplace is stealing market share from eBay and Gumtree, with sellers on the platform guaranteed to interact with real people, according to its top executive.

Speaking exclusively to The Australian at Facebook's Menlo Park headquarters, Deb Liu, the company’s VP of Marketplace, said people trusted Facebook more than its competitors ­because they could trust the buyers and sellers.

“It works so well because it’s local and it’s real people," Ms Liu said. “We can tell you, for example, the person you’re dealing with joined Facebook in 2010, he has profile pictures, you can see he’s real and that’s the beauty of it.

“It’ll show you the friends you have in common so someone you’re transacting with might be a friend of a friend, and they might be ‘Oh, you know John, so I’ll throw this thing in for free’.”

Facebook Marketplace vice-president Deb Liu. Picture: David Swan

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According to Ms Liu, who has been at Facebook for 10 years and is a board member at Intuit, the functionality grew organically from Facebook groups formed to buy and sell locally.

“We launched Marketplace for people in those groups to reach more people,” Ms Liu said. “If you’re trying to sell a car in one of those groups, only people in your neighbourhood might see it, so we wanted to build something that would extend the reach, ­especially for high-ticket items.

“For the first few years, it was something that was happening on Facebook because whatever else was out there didn’t meet their needs.

“So we did some research and realised people trust their neighbours, they’re real people, and people want to know there’s a real human being on the other side.

“And now today we have 800 million people using Marketplace.”

She added that Facebook users had built entire businesses on the Marketplace platform, including one woman who had sold more than 2000 plants, and another who had made thousands of dollars selling bird houses.

Facebook says it is still agile enough to innovate in areas like Marketplace. Picture: Supplied.

“We have a lot of people who have really created something special for themselves, and created new opportunities,” she said

Facebook is now testing the ability for users to ship products, functionality Ms Liu said she ­expected to come to Australia.

She said small businesses in particular had regularly given feedback that they’d like the ­option to post something, rather than rely on the buyer picking it up in person.

“A lot of things are shippable, whether it’s household items or jewellery,” she said.

The executive, who formerly held senior roles at eBay and PayPal, maintained that a company the size of Facebook could continue to rapidly innovate.

“When I came here we had less than 1000 employees,” she said. “We now have infrastructure where we can actually innovate faster. Earlier we didn’t have as many teams that we have now to build, so it was tricky getting, say, the video and shopping teams to work together.

“It’s easier to piece things together now. We’re bigger and that means we have more tools and can test things better.”

David Swan travelled to Menlo Park, California, as a guest of Facebook