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Why Carousell wants to remain available for free


By Shawn Lim | Reporter, Asia Pacific

July 8, 2019 | 7 min read

Singapore-based Carousell, a second-hand online marketplace, wants to remain free to use for its users to inspire every person globally to start selling and buying in order to do more for one another.

That is why the platform is operating on a largely ad-dependent model, with advertising currently one of Carousell’s main revenue streams.

According to Lewis Ng, the seven-year-old start up’s chief commercial officer, Carousell's products need to be engaging and impactful like Facebook and Google in order for its operating model to succeed.

While he acknowledges that it will be tough, he says Carousell is embracing the challenge because it believes growth and monetization go hand in hand in this virtuous cycle.

“We have built targeting models that predict propensity to purchase, which allows advertisers to choose from a variety of campaign strategies. Our internal advertising platform allows advertisers to optimize their campaigns on reach for optimal brand awareness campaigns, or on the propensity to purchase for optimal conversion campaigns,” he explains to The Drum.

“Our new video format also allows advertisers to create engaging, story-telling campaigns, optimized across user journeys. Ultimately our combination of highly granular data with our in-house proprietary technology is how our advertising strategy is helping Carousell build valuable strategic relationships and a key revenue source for Carousell.”

He continues: “Internal users can access self-serve native CPC ads on our platform, also known as “Spotlight”. It provides targeting options for real-time keywords, categories and many more.”

It is understandable why advertisers are keen to work with Carousell, which also has a presence in countries like Hong Kong, the Philippines, Malaysia and Taiwan – They want to access the platform’s large troves of aggregated data, which it is constantly exploring ways to use effectively.

Ng, who previously led commercial relationships at PropertyGuru and TripAdvisor, was hired in May to drive this and transform Carousell into a premium publisher.

According to him, the platform’s data shows that on average, a Singaporean spends approximately 13 minutes per day on Carousell. He also claims that the average Carousell user logs in to the app five times a day, which he says is a result of the platform’s targeting and push-notification strategy.

Carousell has also made its inventory available to media buyers on the Singapore Media Exchange (SMX), a publisher co-op jointly formed by rivals Mediacorp and Singapore Press Holdings that aims to offer advertisers a one-stop selection of programmatic brand-safe options to reach top-quality audiences across South East Asia, including exclusive access to premium formats.

Being on SMX means Carousell has the opportunity to combine its own first-party data with other marketplaces in the co-op like Kaidee and Mudah, to create richer audience data for more precise and effective targeting for advertisers.

The platform previously hired former Singapore Press Holdings' deputy chief marketing officer and senior vice president of sales strategy and operations, Su-Lin Tan, as its new vice president of operations.

Tan, who spent two decades at SPH, fronted advertising print sales for the media conglomerate for 13 years, before moving up to lead its digital transformation efforts. She was instrumental in bringing SPH to the table with Mediacorp to form SMX.

“Carousell wants to inspire every person in the world to start selling and buying in order to do more for one another. Advertisers support this mission by working with us to engage the community, and this helps us sustain the overall business,” explains Ng.

“With our advertising solutions, our goal is to provide accurate and granular user insights to our sellers and advertisers that will ultimately drive product recommendations, thereby streamlining the buying and selling experience for every Carousell user while driving growth.”

“We are also working with a number of programmatic partners where our main goal is to streamline our user experience by offering highly targeted advertising and product recommendations while continuing to grow Carousell’s revenue streams.”

One way Carousell has helped advertisers with its first-party data is to understand users’ shopping behaviors on its platform as young families, students and young working adults make up a majority of its users.

It uses data like search, browsing and purchasing data to segment users into more distinct categories and target our audience based on six different segments like demographic, life stage, behavioral, location, seller type and by the RFM model (recency, frequency and monetary).

As a marketplace with both buyers and sellers, Carousell can also tap into its buying and selling data to more accurately determine what life stage its users are in, like young families in the market for baby, children, and maternity products.

Using advanced keyword association analysis and external data feeds, the platform is able to further segment its parents’ category into maternity, which is those who are currently pregnant, babies, which are those with children between zero and two years old, and kids, who are those with children from two to five years old.

Carousell is also able to split these segments by location, age, and gender, which ensure the platform is extremely targeted in its product recommendations.

Through these methods, it has found that mothers are the most generous group of users, with more than half of active users in the #blessings category are mothers with babies or kids, and 43% of #blessings listings are created by mothers with babies and kids.

“We are also able to identify users preparing for an engagement, marriage or appear to be preparing to upsize their homes and cars. This allows us to not only identify those currently in the parents' life stage but those about to enter into it,” explains Ng.

“Being able to identify these major life events gives our sellers and advertisers a unique insight into our users current and future shopping behavior. Our goal is to use advanced insights like this to improve our product recommendations, and streamline the buying and selling experience for every Carousell user.”

“By leveraging our huge product range, we are able to get higher quality targeting and segmentation of users. We have recently created several high-value shopper segments, ranging from female and male fashion, electronics, travel, luxury goods, autos, and property, and have made these audiences available for external advertisers to purchase via our direct sales team.”

Even though Carousell is focused on monetizing the data from its existing users for advertisers, it is also keen to acquire users and grow its overall user base.

While Ng declined to comment on how much Carousell spends on acquiring customers and the strategies it uses, he says word-of-mouth is important for the platform in its markets outside of Singapore, where it aims to establish a leadership position.

He explains Carousell does this by consistently delivering a great experience for its existing users because it has seen how word-of-mouth and network effects contribute to user growth over time, as its earliest users become the platform’s brand advocates.

Besides working with advertisers, Carousell also engages in traditional marketing activities and user activations to generate interest and word of mouth among its users. According to Ng, this is done in the form of digital marketing on Facebook and Instagram.

The platform's creative agency of record is 72andSunny Singapore, while it is currently on the lookout for a media agency.

“Besides traditional marketing, we also ensure there is a product-market fit in what we offer to our users in various markets. What may work well in dense city-states like Singapore and Hong Kong, may not necessarily work as effectively in diverse markets, such as Malaysia and Indonesia,” he explains.

“We are constantly challenging our product and engineering teams to improve the overall Carousell experience while delivering value to the local user.”

This is part of The Drum's Marketer of the Future coverage for 2019. You can read our coverage here.

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