Daniel Ling noticed a problem when he moved to Vancouver. A seasoned businessman with more than a decade of experience working in commercial imports, Ling had travelled to many cities.
But in Vancouver, Ling observed that although the city had plenty of arts and crafts markets and independent vendors, locals didn’t seem to know they even existed. In response to this issue, Ling created Antsquare, a hyperlocal e-commerce marketplace that launched in August. The goal is to strengthen the personal ties between merchants and customers, encouraging people to shop locally and helping businesses build recurring sales.
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Mobile e-commerce allows consumers to buy products from far-flung locations with the push of a button. The experience is convenient, no doubt, but it lacks a human element; there’s no shopkeeper to shoot the breeze with. And if consumers are increasingly glued to their smartphones, they’re less likely to notice the world around them. But a handful of companies hope to bridge the two worlds with apps that foster connections between consumers and local businesses, and even their neighbours. Swapit in Hong Kong allows consumers to use the cameras in their smartphones and in-app messaging function to buy and sell items with others who are nearby, for example. And Toronto-based VarageSale has attracted millions of users by modelling itself after the neighbourhood garage sale. So far this year, hyperlocal e-commerce businesses raised $140 million in 28 deals globally.
“People really believe in what we’re doing,” says Alex Volney, director of marketing at Antsquare in Vancouver. “There is a surging movement in the buy-local campaign, and people like buying from other people in their community.” Antsquare lets users enter their location and search for specific items. It then returns a list of vendors in their vicinity with the product or service they want. Anybody can post on Antsquare, but the advantage for the corner mom and pop store is that Antsquare will take care of the marketing, payment and pick-up arrangements. Once a payment is preauthorized, the buyer can collect the goodies, usually at the vendor’s home or workplace. With services available today in Vancouver and Seattle, the 14-person company currently has about 200 shops on its platform. While listing items and opening a virtual storefront is free, Antsquare earns revenue by taking 5% of the transaction fee from each sale.
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VarageSale, a more established e-commerce platform based in Toronto, touts millions of users in North America, Europe and Australia who post billions of items each month. Carl Mercier, CEO at VarageSale, says half of their mobile users come back every day to post, purchase or talk to other people from their community. Users sell everything from household equipment to baby diapers. Members are required to create a profile when they join a VarageSale community near where they live. Each community has a team of admins to monitor the group and welcome new members. In March, the four-year-old startup raised $34 million from Sequoia Capital, the Silicon Valley fund that invested in Google, Dropbox and WhatsApp.
“We didn’t build a traditional classified platform for a marketplace,” says Mercier. “We really built a platform for communities and neighbours, and the engagement and trust that come out of these communities is just super.” People are drawn to the platform for the social interactions and neighbourhood gossip. “Friendships often emerge when users meet each other in person, so it’s more than just transactions for them,” says Mercier.
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People have always been drawn to local commerce, says Kersi Antia, associate professor of marketing at Ivey Business School. “The hyperlocal marketplace has been going on for centuries. What we’re doing now is making apps around it with this perfect storm of technological, economic and social trends.”
The challenges in this space, according to Antia, lie in scaling. “You need to have enough of these blocks and neighbourhoods up your sleeve to make money,” he says. Furthermore, hyperlocal startups need to quickly sign on large volumes of all types of vendors to keep up with the diverse demands of shoppers. Currently, Antsquare is working on social integration so that users can follow their favourite vendors and see new products as they’re posted. That level of convenience is something the company hopes will keep consumers coming back to the app.
Mobile e-commerce is still a new field for micro businesses, and it’s unclear if models like Antsquare’s will take hold. But so long as shoppers have at least some desire to connect with local proprietors and each other, these apps will find an audience.
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How are you attracting local consumers to your business? Are you using an e-commerce app like Antsquare or VarageSale? Would you? Let us know by commenting below.