Less than a month ago we wrote about the startup OfferUp raising $119 million to compete with Craigslist.
Today Facebook released their Craigslist competitor, called Marketplace. Like OfferUp, it's a mobile first app designed to let you to discover, buy and sell new and used items - mostly with people in your local area.
Marketplace is purely a matching service. The buyer send the seller a direct message from Marketplace to make an offer.
From that point on, the buyer and the seller can work out the details in any way they choose.
Like Craigslist, Facebook does not facilitate the payment or delivery of items listed or sold in Marketplace.
While it had a rough first day due to a "technical issue", Marketplace could easily become a major Craigslist competitor.
As we pointed out in our article on OfferUp, Craigslist hasn't changed much in the past decade.
Nor does it have a very compelling mobile experience. Key quote from one of the investors in OfferUp:
Hans Tung from GGV Capital said that he invested in OfferUp because “Craigslist hasn’t innovated for a long time and there is unmet, pent up demand for classified on mobile.”
While Marketplace doesn't facilitate payments today, don't expect that to be the case for long.
Facebook's Messenger product recently acquired the ability to process payments natively, so expect this feature to be incorporated into Marketplace likely fairly soon. It's simply too big a monetization opportunity not to do this.
Facebook first launched a Marketplace type product in 2007, but it wasn't successful. After a couple of retries, they shut it down in 2014.
But is seems likely this effort will be much more successful. Facebook has about 1.7 billion users, 450 million of which visit their buy and sell pages each month. Moving even a minority of these folks to Marketplace still results in a lot of commerce potential.
The move by Facebook validates the growing peer-to-peer commerce trend, which shows no sign of slowing down.