How Carousell Group is leading SEA’s push toward recommerce

Among the many cultural shifts social media has brought about, one of the most prominent is the move for better environmental consciousness. Today’s digital consumers believe that they can make a difference in the world through their choices and actions. This has led to more people engaging in secondhand purchases or “recommerce.”

As the world’s fastest-growing online retail market, Southeast Asia provides a good opportunity for recommerce to grow exponentially.

JJ Ang, CFO of Carousell Group, estimates market revenue for the region’s recommerce segment to be “northward of US$1 billion.” Coupled with a projected penetration rate of 10% of Southeast Asia’s ecommerce gross merchandise value (GMV), he adds that the opportunity for recommerce translates to approximately US$23 billion in GMV.

Ang also points to “a confluence of global macro trends” driving increased interest and usage of recommerce platforms.

“While more people are embracing sustainability, we all see additional nuances. There are many who choose secondhand today as meaningful consumption, leverage resale to trade up to more premium items, or tap into secondhand for more affordable options,” he explains.

These factors give Carousell Group the opportunity to define, optimize, and elevate recommerce in Southeast Asia.

A full spectrum of secondhand

Founded in Singapore in 2012, Carousell Group began with a multi-category marketplace, bringing classifieds into the mobile app era. Since then, the company has expanded its presence across Southeast Asia, Hong Kong, and Taiwan with nine brands.

Aside from the Carousell platform, which is available across Southeast Asia, Hong Kong, and Taiwan, the group also owns classifieds and recommerce marketplaces in Vietnam with Cho Tot and Malaysia with Mudah.my.

These three platforms make up Carousell Group’s foundation, serving classifieds transactions across five categories: goods, luxury, mobile devices, automobiles, and property, jobs, and services, the last three being a single category.

Through strategic acquisitions over the years, Carousell Group has also made moves to focus on certain categories and build up recommerce capabilities. Refash offers both virtual and physical touchpoints for the sale and purchase of secondhand fashion goods. The Singaporean brand recently expanded to Hong Kong and Malaysia.

Meanwhile, Ang describes the group’s latest acquisition, LuxLexicon, as the “leading authenticated luxury consignment platform in Singapore.” It focuses on the resale of premium luxury bags from the likes of Hermes and Chanel.

Carousell acquired Laku6, an Indonesia-based recommerce marketplace focused on electronics, in 2022. The platform employs an AI-powered approach in verifying the authenticity and condition of mobile devices, and it uses data science modeling of the group’s marketplace data to set a competitive price.

Aside from the six recommerce brands, Carousell Group also has OneShift and Revo Financial for automobiles as well as Carousell Media Group, which provides ad services across the different platforms.

These brands come together in an ecosystem that allows Carousell Group to provide customers with greater levels of assurance when making secondhand purchases, says Ang.

“You need to have an omnichannel strategy to create that kind of convenience and trust for users in the ecosystem,” he adds.

The magic behind the platforms

The rise of recommerce in Southeast Asia highlights two pain points that Carousell Group is aiming to address.

The first pain point is establishing trust. Ang points out that buyers and novice sellers often struggle with proving the authenticity and quality of products. Carousell Group tackles this by leveraging expertise and capabilities from its various brands.

Today, the brands’ inspection and authentication capabilities establish the foundation and standards for the group’s Certified program. Available to select merchants who meet the requirements for trustworthiness and quality, listings that are certified come with value-added assurances such as limited warranties or guarantees, giving buyers greater peace of mind.

The second pain point is ensuring convenience. This applies to both buyers and sellers who want to engage in recommerce but may not have the time for meetups.

For sellers, Carousell Group’s platforms are open to buying over or consigning certain products, rather than having to go through conventional methods of peer-to-peer transacting. For buyers, they can pay for their purchases within the platform and have them delivered to their doorstep.

Both Refash and LuxLexicon have centrally located retail stores where buyers can shop and sellers can drop their goods off. Where the latter takes in premium luxury goods on a consignment basis, the former operates on a sell-to-platform model where it immediately buys over goods. This allows sellers decluttering their wardrobe to do so quickly with fast, hassle-free payouts.

“The expertise [we invested in] is about being able to know what items you can accept, and what price you can then sell at, to strategically take in inventory to our advantage,” explains Ang. He adds that the success of this process is what builds brand reputation as the platform of choice for selling pre-owned fashion goods.

With other categories, Carousell Group has data that reveals the supply and transaction prices of fast-moving products. In such cases, the company uses AI and data science modeling to guide buying inventory at a certain price for resale, since demand and profit margins are more predictable.

In addition, with the rise of phishing scams and growing concerns around sharing personal information, Carousell Group is working to improve the transaction process for its users.

Today, buyers can pay directly within the platform using their market’s most popular payment methods. This money is held securely until both buyer and seller confirm the transaction to ensure satisfaction on both sides. Carousell and Cho Tot also have logistics partners for in-app delivery arrangements, with tracking available for standard parcels.

“These improvements all come down to enhancing the user’s basic transactional experience, making recommerce as seamless as ecommerce,” Ang says.

Reduce, reuse, recycle, profit

As for the future of recommerce, Ang is optimistic.

“I think recommerce will continue to grow as sustainability remains at the forefront of social consciousness, and buying secondhand becomes a way of life,” he notes.

To achieve Carousell Group’s mission of making secondhand the first choice for everyone, Ang asserts that the company will continue to improve not just organically, but via more strategic acquisition opportunities with recommerce businesses that offer relevant capabilities.

“Recommerce is a very high-growth market at a very nascent stage, so by continuing to create more value and options for consumers, we can cement our marketplace leadership and help further accelerate this growth,” he says.

Carousell Group is the leading multi-category platform and recommerce group in Greater Southeast Asia, with nine brands in seven markets offering a mix of online and omnichannel resale models. Championing the future of secondhand, the company has made it easier to sell preloved items while providing more options and reasons to make secondhand the first choice.

Find out more about Carousell Group today.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.