Facebook expands Marketplace feature, quietly logs on to realty business

Facebook wanted to make the Marketplace a platform big enough for it to generate revenue, but it never got payment license for Facebook Messenger

About two months ago, a Facebook regular saw a listing for two shirts being sold for Rs 1 on Marketplace, which lets users buy and sell items available nearby through the social network. When he clicked on the unbelievable offer, he was taken to a Facebook Messenger chat window, connecting directly to the seller, who said the actual price of the shirts was Rs 100. After bargaining for five minutes over chat, the last price was fixed: Rs 55 for two. The mode of payment: cash on delivery.

Facebook Marketplace, launched with fanfare 18 months ago, doesn’t have a pay option; and Facebook doesn’t verify sellers, making it something like a potluck and an endless wait sometimes. For instance, the shirts ordered two months ago are yet to be delivered and the seller has moved offline. 

While the Menlo Park (California)-headquartered company wanted to make the Marketplace platform big enough to open a revenue stream, it never got the payment licence for Facebook Messenger. 

Now, it’s looking at yet another avenue, possibly with an eye on revenue. A few weeks ago, Facebook quietly expanded Marketplace to facilitate selling of real estate. The publicity blitz that had accompanied the launch of Marketplace was clearly missing this time.

To a Business Standard query on the silent launch, Facebook said in an e-mail response that in 2017 it had announced that it would venture into real estate listings in the US. This is just a rolling out of the same programme in India, just much later, the company said. Facebook, however, did not respond to a question about the popularity of the platform in India.

People in the know say Marketplace has not taken off despite Facebook's popularity. In the quarter ended March 31, 2019, the number of daily active users on Facebook globally was 1.56 billion, led by countries like India. In 2017, the last time it disclosed India specific numbers, Facebook said the country had 201 million users.

Real estate challenges

Marketplace’s latest foray — real estate — is a high engagement sector, but it brings with it its own challenges. “Real estate listing is messy. You need to counter fake, overpriced and duplicate listings,” pointed out a venture investor who has a real estate company in his portfolio. Also, several listings are inaccurate but not fake. “Something as simple as a misstated landmark changes the price of a listing,” he said.

Real estate listings need to make sure that the pictures used are authentic and do not hold any watermark of another listing company. “It may seem trivial but it is important,” the investor added.

Most listings in Delhi, for example, hold the Housing.com watermark.

Expensive business

Facebook, in its response, said its listings are provided by "industry leading partners". It didn’t elaborate on the partners.

Verifying listings is an expensive business. Most real estate websites use pictures and physical verification to allow listings to stay on longer than a few days. There is also a paid listing element to weed out “non-serious” buyers.

Facebook doesn’t have a verification tool, virtual or otherwise. There is no price control either. It allows brokers to put in Re 1 listings to take the conversation off Facebook and hence break the loop.

“Facebook also monitors listing and listing-owner performance to identify issues and address poor quality listings,” the company stated.

From a product point of view, Facebook doesn’t have control over customer experience when it comes to Marketplace. The seller usually negotiates a price with the buyer, often resulting in friction in the process. 

Payment is an issue too. Because Facebook Messenger doesn’t support payments, conversations are taken to WhatsApp which has a payments capability. This was rolled out to 1 million of its over 200 million users in India in testing mode in February 2018, but is still awaiting regulatory approvals before a pan-India launch.

While Facebook is the intermediary for the sellers, it has little control on the service these sellers provide, thereby breaking the chain. ‘’This means orders are lost and sometimes never reach,’’ said a user. Quite like the shirts ordered two months ago and not delivered yet.