A C2C revolution: Eight years of Rakuma

The humble web auction was a staple of the early days of e-commerce. But as online shopping hit the mainstream and the marketplace model took center stage, auction sites began to fall out of fashion.

But a question remained: What do you do with all the stuff you’ve bought after you no longer need it?

In the early 2010s, this question was answered in a uniquely modern way: with a smartphone app. Eight years ago, Japan saw the launch of FRIL, the country’s first “flea market” app. FRIL allowed users to take pictures and post their own goods for customers to browse and negotiate. And so, the modern C2C (consumer to consumer) industry in Japan was born.

FRIL joined the Rakuten family in 2016, and with its focus on the fashion and beauty products genres, complemented the more general range of products sold through Rakuma, another C2C app in the Rakuten Group.

In 2018, the two apps were merged under the Rakuma brand. Rakuma quickly established a reputation as a low-cost alternative for sellers, taking a 0% margin on user sales during its first years before introducing a margin that was a fraction of its main competitors. Here, we look back on eight years of C2C trends and innovation that have made Rakuma one of Japan’s favorite C2C marketplaces.

Brands are big on C2C

A defining trend of Japan’s C2C industry is the popularity of luxury items. Branded items often retain much of their value when resold. This allows budget-conscious customers to buy expensive items with confidence that they will be able to resell them at a reasonable price point in the future.

The trends in the early years were led by young female fashionistas, the target demographic of the FRIL platform. From 2015, fast fashion retailers such as Zara and Uniqlo began to fill the rankings, while 2018 recorded a sharp spike in streetwear items from popular brands like Supreme and Nike as Rakuma gained more male users.

A haven for handmade enthusiasts and artisans

Gifts always feel more authentic when they’re handmade. But does it need to be your own hands doing the making?

Rakuma has welcomed a sharp rise in creators of handmade goods on the platform, making everything from jewelry and bags to accessories and home decor. In 2019, Rakuma opened a pop-up shop in the trendy Tokyo neighborhood of Harajuku for customers to browse Mother’s Day gift items.

The rise of the silver surfers

Between 2016 and 2018, Rakuma saw a 30-fold jump in senior (60+) users. The rise can be partially explained by a late boom in smartphone ownership among older generations, but it can also be attributed to a morbid new fad among Japan’s senior users: Decluttering their lives before passing away so that their kids won’t have to.

On a slightly brighter note, many seniors are apparently using Rakuma to source fresh, affordable food such as fruit, vegetables and rice. The personal nature of the app provides a level of quality that other platforms find difficult to match.

Expansion to Taiwan

In 2016, Rakuma took its first step outside of Japan, launching in the competitive Taiwanese C2C market. Since launch, the app has been installed over 1 million times in Taiwan. The Taiwanese user base is predominantly young and female, and is particularly popular for buying and selling baby products and, more recently, used smartphones.

The app has also earned a reputation for speed, with many items listed being sold within 24 hours.

The pioneers of Japan’s modern C2C scene

Japan’s first ever app-based C2C transaction was conducted by long-time Rakuma fan Motegi, in 2011. “I had just entered university and had a smartphone for the first time. I was browsing the app store thinking, I wonder if there’s anything like those old auction sites I used to use on the internet,” she reminisces. “And there it was! I downloaded the app and put an item up for sale straight away.”

The original creator of Rakuma (then FRIL) Shota Horii also remembers the rapidly evolving tech landscape that gave rise to the modern C2C industry. “It was a time when flip phones were rapidly disappearing and everyone suddenly had smartphones,” Horii recalls. “I saw that there was demand for a way for women to sell their old clothes that they no longer wanted, so after discussions with more than 100 people, I finally decided to develop FRIL, an app to sell things using nothing more than your smartphone camera.”

C2C roots in France

Rakuma isn’t Rakuten’s first experience with C2C. Rakuten France — previously PriceMinister — actually began as an auction-based marketplace, and retains many of these elements today, with some added innovations.

The marketplace recently began a buyback project, allowing users to sell their smartphones, tablets and laptops either directly to Rakuten France or to a buyer on a public platform. Rakuten France has also worked with the Rakuten Institute of Technology on projects such as a tool that automatically calculates the ideal price for sellers’ items.

The garage sale lives on(line)

In an age of technological iteration and device cycles, C2C presents a sustainable solution to the world’s preloved items. While the e-commerce industry has moved on to a more merchant-centric approach, garage sale explorers aren’t being left in the dust: In fact, they have the entire internet at their fingertips.