What is the reason why "Yahoo Auction" cannot beat "Mercari" in flea market and what is the decisive difference in strategy? [Series] "Business Course" of Successful Companies

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What is the reason why "Yahoo Auction" cannot beat "Mercari" in flea market and what is the decisive difference in strategy?

[Series] "Business Course" of Successful Companies

Change the "strengths" of competitors into "weaknesses". Wouldn't it be nice to have such a dream-like strategy? In fact, most successful venture companies are aiming at the "strengths" of leader companies and are pushing into a dilemma that leader companies cannot imitate even if they want to imitate. In this series, such a strategy is called a "dilemma strategy." Part 4 will cover the familiar Mercari. Why was Mercari able to surpass Yahoo Auction, which boasts overwhelming strength in interpersonal auctions? This time, I would like to introduce Mercari's "dilemma strategy."

In-house entrepreneur Ryusuke Hiratsuka

In-house entrepreneur Ryusuke Hiratsuka

Worked for a major energy company. After earning an MBA from Waseda University Business School, he proposed to the company a car leasing for individuals at a gas station, creating a market of zero to 150 billion yen with an initial investment of 200 million yen. He continued to be involved in new businesses, and is now responsible for the project's early domestic offshore wind farm. His specialty is business models and business strategies. Based on more than 500 cases, he has developed a methodology for weak companies to overcome strong companies, and is using it in actual battles every day.

1. Mercari's service content
2. Analyze Mercari's "Strategy Card"
3. What is Mercari's "contrarian card" that has driven Yahoo Auction?
4. Why "Yahoo Auction" can't beat "Mercari"
5. Differences between Mercari and Yahoo Auction strategies (illustrated)
6. What is Mercari's "dilemma strategy" and overall score (out of 5)?

Mercari's service content

First, let's take a look at Mercari's services. Mercari continues to grow by developing flea market apps that allow individuals to buy and sell goods using their smartphones, with the aim of realizing a sound-cycle society that "eliminates throwing away." It is a so-called platform-type business model that provides a "place" that matches people who want to sell and people who want to buy, and when a sale is completed, a 10% usage fee is obtained from the purchaser. Mercari has greatly expanded the number of listings due to the effects of TV commercials, in addition to user-friendly measures such as easy-to-use apps and anonymous shipping. Buyers support the fact that anyone can easily buy and sell on their smartphones without competing with others. The following is a summary of the differences in services from Yahoo! Auctions. Yahoo Auction, on the other hand, boasts overwhelming strength in online auctions. In 2013, when Mercari started its service, Yahoo Auction's transaction volume exceeded 750 billion yen, and it was above the clouds for Mercari. Eight years later, in 2021, the reuse business of Z Holdings, including Yahoo Auction, "PayPay Furima" and "ZOZOUSED", will be about 850 billion yen, while Mercari's transaction volume (total domestic distribution) is about 780 billion yen *. The difference between the yen * and that is rapidly closing, and in terms of the number of smartphone users, Mercari is reversing Yahoo! Auctions. * Mercari in the fiscal year ended June 2021, Yahoo Auction in 2021 In addition, in the "Flea Market Services App Usage Survey" conducted by the MMD Research Institute in 2021, Mercari used Yahoo Auctions in terms of flea market service app usage rates. The result is higher than that.

Analyze Mercari's "Strategy Card"

Normally, if the champion Yahoo Auction took the same strategy (homogenization strategy) as Mercari, Mercari would be game over, but in reality it was not. That is because Mercari's strategic move (= strategy card) was excellent. Let's take a look at Mercari's cards from seven perspectives. (1) Customer target: "Customer only" Currently, Mercari is supported by a wide range of people, but initially we narrowed down the target to women in their 20s and 30s. Yahoo Auction's customers, especially men and women in their 40s and above, are becoming more and more difficult to follow. (2) Products / Services: "Product Specialization" Mercari specializes in flea markets. Originally, Yahoo Auction had a function that allows you to sell like a flea market by clearly stating the "prompt decision price" (added a "flea market listing" function in 2017), but Yahoo Auction, which is making a profit at the auction, It is difficult to specialize in flea markets. (3) Price setting: "Free" Mercari has succeeded in acquiring new customers by making the listing fee free. On the other hand, in order to sell on Yahoo Auction, it was necessary to become a Yahoo Premium member with a monthly fee of 498 yen. Yahoo Auctions will make it free in 2018, but the decision to abandon revenue sources has not been easy for Yahoo Auctions. (4) Sales channel: "New format" Mercari has developed a service for housewives and young people who do not use PCs very often, assuming that it will be used on smartphones. Also, because it specializes in flea markets, simple and easy operations are possible. On the other hand, Yahoo Auction was developed on the assumption that it will be used on a PC and has many functions, so it is not easy to improve usability on a smartphone. (5) Promotion: "Vision" "User Friendly" Mercari has been rapidly developing user-friendly measures such as free listing, anonymous shipping, and telephone inquiry response *, which are necessary for easy and quick buying and selling. On the other hand, Yahoo Auction, which appeals to sell at high prices at auctions, cannot appeal to "easiness" or "quickness", and support measures for beginners are behind. * Currently, we do not support telephone calls for general users. (6) Own assets: "Assets limited" "New assets" Mercari specializes in flea markets, so the system can be simplified. While Yahoo Auction operates its own data center, Mercari is using Amazon and Google cloud services to reduce fixed costs. On the other hand, Mercari has a large number of telephone support staff (which Yahoo Auction does not have) to improve customer satisfaction. (7) Partners: “No partner” Yahoo Auction actively promotes the participation of distributors, but Mercari restricts the participation of distributors. As a result, even individuals can sell their products without hesitation, which has led to an increase in the support of customers, mainly women. It is difficult for Yahoo Auction, which has already earned a large amount of commission income from distributors, to follow suit. In this way, all of Mercari's strategic cards take advantage of Yahoo Auction's strengths, and because of their strengths, it is difficult to follow. Some of Mercari's strategy cards are seemingly irrational. However, these play a major role in differentiating them from Yahoo! Auctions. From here, we will dig deeper into the difference between Yahoo Auction and Mercari. [Next page] The reason why "Yahoo Auction" cannot beat "Mercari"

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