- Social marketplace Poshmark has launched in Australia, offering local shoppers another alternative to established platforms like eBay.
- Social marketplaces like Poshmark and Depop have accumulated millions of users in a decade of existence, promising a new approach to online secondhand shopping.
- The company’s arrival comes as online retail spending remains high, but adverse financial conditions could meet shoppers later in 2021.
- Visit Business Insider Australia’s homepage for more stories.
Australians were all dressed up with nowhere to go in 2020, according to Poshmark, the digital marketplace hoping to turn the nation’s unworn clothes into serious profit.
But the company’s new Australian presence must now contend with the reopening of brick-and-mortar retailers, while proving its tailor-made shopping experience can stand out in the online retail market.
It could be a literal rags-to-riches story for the firm — and for the broader social marketplace, which might change how Australians shop for good.
Social marketplaces: dressed to impress
Poshmark, which launched in Australia last month, is one of several firms combining the online marketplace formula, refined by sites like eBay and Gumtree, with the social media functionality of platforms like Instagram.
The result: a hybrid service, allowing buyers to view potential bargains through a curated feed, or via user-listed collections picked by the Poshmark algorithm.
The experience is amplified by features like ‘Posh Stories’, an Instagram Stories-esque feature allowing sellers to flaunt their secondhand wares in short clips and images.
That holistic shopping approach isn’t just for show, says Alex Constantinides, Poshmark’s director of international expansion.
“Because our algorithm personalises each user’s feed to feature the most relevant listings, buyers can quickly and easily search for specific items or categories,” she told Business Insider Australia.
“The dynamic nature of the product listings on our marketplace and the freshness of the curated assortments by our sellers further increase engagement on our marketplace.”
That engagement has proven successful for the 10-year-old company, which now boasts 70 million users worldwide.
The focus on social marketplaces is especially prevalent among Millennials and Gen Z users, who comprised 80% of Poshmark’s userbase at the end of 2019.
“Social marketplaces allow the younger generations to engage with a strong network, develop a following and grow their community,” Constantinides said.
Pulling the threads
Poshmark’s arrival in Australia comes during elevated levels of online retail spending, which spiked in the early days of the COVID-19 pandemic.
The ABS says Australians dropped some $2.1 billion online for non-food items in January 2021, up nearly 58% in seasonally adjusted terms from January 2020 levels.
And in October, a Deloitte report, commissioned by Australia Post, suggested home deliveries are could remain 25% above pre-COVID levels until late 2021.
Elevated levels of non-essential online spending appear to dovetail with a rise in unworn clothing, which Poshmark hopes to monetise by taking a slice of each sale on its platform.
The company’s own research suggests 79% of Australians with unworn clothes in their closets reported having nowhere to wear them during lockdowns.
In addition, some 28% of respondents claimed to have upwards of $500 in unworn clothing.
Australia’s affinity for online shopping and a sea of unworn clothes makes the country an “exciting new frontier” for the social marketplace model, Constantinides said.
Not that the company can expect nothing but wardrobe-swapping bliss.
Brick-and-mortar retailers have now largely reopened, and the very lockdowns which saw unworn outfits crowd Australia’s closets have effectively lifted, giving the fashion set more opportunity to wear their new threads — and potentially less incentive to hawk them online.
Poshmark is not the first social marketplace on the local scene, either.
Depop, perhaps Poshmark’s main global competitor, officially launched its Australian operations in late 2019.
At the time, Depop claimed Australia was its third-largest marketplace, making Poshmark a clear challenger in the nascent market. (Poshmark did not comment on Australia’s user uptake since its local launch. “Growth is a huge focus over the next year,” Constantinides said.)
The broader financial conditions which made online shopping so favourable for many Australians will cease at the end of March, too.
Commonwealth Bank economists predict the cessation of the JobKeeper wage subsidy could see 110,000 Australians lose their jobs, predominantly in the arts, recreation, food, and hospitality sectors — which employ huge numbers of Millennial and Gen Z Australians.
Outfits and starts
For all the volatility of 2020, and the potential of further disruptions in Australia’s pandemic recovery, the company is confident in its business model.
In its 2020 financial results, released Friday, Poshmark revealed a December quarter loss of US$$4.06 million (AU$5.23 million), down from a US$14.75 million (AU$19 million) loss reported in December 2019.
And revenue grew above estimates, climbing 28% to US$69.3 million (AU$89.3 million).
“Our platform is super adaptable and flexible,” Poshmark founder and CEO Manish Chandra told CNBC.
“That has allowed us to be a growth engine in 2020, compared to a lot of other places that have suffered.”
That optimism is shared in Australia, where Constantinides believes Poshmark could be something more than a channel to offload dated threads.
“Currently there isn’t a marketplace that gives Aussies the opportunity to build businesses and connections in the way that Poshmark does for its community,” she said.
Correction: A previous version of this article stated Poshmark was founded 11 years ago. The company began 10 years ago.
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