[LINK] "The Kijiji economy and what it says about Canadian households"

[rfmcdonald]

Jennifer Robson of MacLean's writes about an interesting new analysis by Canadian second-hand retailer Kijiji of its market.

Kijiji released their second annual report on the second-hand economy today. Yes, that Kijiji—the site where maybe you looked to find that second-hand smartphone or sold off your baby stroller when your child was too big for it. As with last year’s report, Kijiji has partnered with an impressive team of academics to field a survey of our habits of trading, renting, donating, buying and selling “previously loved” goods.

The second-hand economy isn’t new. Thrift stores, garage sales and church basement sales have been around for a very long time. Family members and neighbours were swapping, re-gifting and borrowing each other’s belonging for centuries before the term “sharing economy” gained traction. But I think there are at least two reasons to pay more attention to a report like this one.

First, the emergence of online platforms to facilitate trades in second-hand goods is a game-changer in all kinds of ways.

Digital classified services like Kijiji (or Craigslist) should make it easier for resellers to set prices and for buyers to shop around, reducing information asymmetries and improving efficiency in matching buyers and resellers. Interestingly, the report finds that resellers who take the time to use online information before posting their own ad do better—earning an average of $579 from online classifieds versus $279 for resellers who estimate their price. It’s possible that resellers of more expensive goods are just more likely to take the time to research their pricing. The data in this report don’t tell us.

Online platforms may also now be really important for the off-line second-hand economy. Check your local Kijiji or Craigslist or other online classifieds and you’ll see lists of notices for garage sales, book sales and more. One community organization in my city now relies on an online form to pre-screen donations of household goods for Syrian refugees. A popular local chain that resells baby clothing, toys and gear on consignment relies on a web-based platform for resellers to check their list of goods for sale and track their profits. Moving online, in theory, makes it easier for the local book sale to attract more buyers and to attract buyers from outside the area volunteers could reach with posters or flyers. Again, this should be good from the standpoint of connecting buyers and resellers in a competitive market, even if the transaction itself takes place off-line.