Carousell: Growing a Peer-to-Peer Mobile App Business by Building a Community

It was end-2019 and seven years into the founding of Carousell, a Singapore-headquartered peer-to-peer online classified advertisements marketplace started by three friends, Quek Siu Rui, Marcus Tan and Lucas Ngoo. Valued at US$550 million, Carousell had gained wide popularity with a presence in seven markets across Asia Pacific. However new challenges that surfaced continued to confront the pioneer and market leader of mobile classifieds in Southeast Asia.

Back in 2012, the opportunity and challenge the three young founders were facing was much simpler – to simplify a cumbersome and lengthy process to sell pre-owned items online. The trio built a smartphone app at a hackathon that reduced the time taken to list an item from ten minutes to 30 seconds. On a mission to inspire others to start selling, they adopted a mobile-first approach targeting young adults and gradually built a strong community of Carousellers over the years.

With successive rounds of equity funding and scaling-up, soon came the question of monetisation. Carousell adopted a freemium business model, and began to roll out paid premium services for used-goods sellers to increase the visibility of their listings, and subscription services for professional sellers (such as real estate agents), to promote their properties.

Having evolved from paper press to web desktop and mobile versions, what was next for the classifieds industry? Carousell reckoned Classified Version 4.0 would be AI-driven. How then could Carousell compete with new entrants, such as Facebook Marketplace, contending for a slice of the classified platform business? How could Carousell combat the increasing prevalence of online fraud on its platform to offer safety and assurance to its users? Would the monetizing efforts by providing paid services on the platform derail the community building effort that had been critical to Carousell’s early success?

Students will be able to explain the adoption of a community-driven approach as a unique competitive differentiation strategy, and assess the use of localisation strategies for achieving growth and market leadership in highly competitive industries. They will identify challenges that accompanied monetisation in a ‘freemium’ business model and recognise distinctive threats facing peer-to-peer platforms (e.g., Carousell) in the e-commerce industry.

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