Mercari Looks For GMV & Active User Boost With New Seller Promotion

Liz Morton
Liz Morton


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Mercari US is desperately trying to buy its way into a GMV and active users bump as the end of quarter is fast approaching and pressure to show new fee strategy is working mounts.

The site kicked off a month long promo starting on June 15th, offering sellers the chance to earn site credits for launching their first listings and inviting friends.

New sellers who have never listed before are eligible to earn up to $100 in credits if they list 100 items within the promotional period.

And all users can earn additional credit for referring friends to join and make their first sales, provided the new user joins using their referral code.

As usual, check those terms and conditions carefully - importantly, Mercari credit cannot be redeemed for cash, can only be used toward future purchases on the site and will expire within 30 days of being issued.

Those terms make it obvious what the goal behind this promotion is - entice as many new users as possible to list items for sale on the site and then use the credits to make purchases all within a relatively short time frame to boost reportable GMV and Monthly Active Users (MAU) stats for the site.

Mercari defines GMV as the total value of merchandise sold during a specified period and MAU as the quarterly average number of registered users who accessed the Mercari service via app or website at least once during a given month.

By starting the promo in the middle of June and allowing it to run through the middle of July, that spreads the initial impact out over not just two months but two quarters as well.

Mercari is also likely betting that issuing the credits starting August 1 and putting a 30 day expiration date on them will ensure a returning active users and GMV bump as those sellers will be put in a "use it or lose it" position to incentivize them to make a purchase.

The move comes as Mercari US CEO John Lagerling is under intense pressure to deliver GMV and user growth while showing that the significant shakeup to Mercari's fee structure announced in March was the right strategic move.

Mercari Shifts Fees From Sellers To Buyers, Adds 3 Day Returns For Any Reason
Mercari drops selling fees, passes payment processing & service fees on to buyers but there’s a catch - items can now be returned for any reason!

Largerling quietly undertook a mass layoff last week, eliminating 45% of US based roles while telling employees in an internal memo:

"More recently, changes to our fee structure have helped us increase listings, but have not yet delivered the short-term results that we had hoped for on the buyer / GMV side. To remain viable in the U.S. market and ultimately get back on track, we must cut costs and consolidate quickly."

Mercari US Undertakes Mass Layoff Months After Major Fee Structure Shakeup
Mercari US has undertaken a significant mass layoff, eliminating 45% of staff months after major fee structure & business operations shake up.

While this promotion may have a short-term payoff to buy the CEO more time to "get back on track", the long terms consequences could be brutal - just ask ex-eBay CEO Devin Wenig.

Back in 2018, Wenig leaned heavily on sitewide eBay-funded discounts to try to goose GMV on the platform, with many "flash sales" of 15-20% off throughout the year.

Those promotions proved to be a double-edged sword - once buyers got used to receiving discounts, they'd often wait for a sale before making a purchase, creating "one and done" or only occasional buying patterns.

Wenig's strategy was considered such a failure that current CEO Jamie Iannone felt the need to explicitly distance himself from it when speaking to investors in Q2 2021.

We've discontinued legacy tactics that led to low value, infrequent or one and done buyers. Our buyer base is starting to evolve based on this strategy. These high-volume buyers are growing compared to a year-ago and their spend on eBay is growing even faster. This higher-quality mix of buyers increases value for sellers and will lead to improved health of our ecosystem over the long-term...

..This is something that I laid out last July when we talked about the tech-led reimagination as being focused on turning buyers into lifelong enthusiasts on the platform and moving away from the tactics that we had in 2019 what was really just about the number of active buyers even low value buyers or one and done buyers.

Similarly, Mercari has been increasingly turning to funding discounts and promotions to stimulate activity on the site, with many users reporting receiving frequent $10 off coupons since the fee structure change to offset some of the service and payment processing fees buyers are now seeing added at checkout.

If Lagerling isn't careful, he too may find that funding discounts and promotions for onsite credit will backfire in a major way if these new users fall off after the promotion is over or only come back when more discounts are offered, leading to a an acceleration of the downward spiral Mercari already finds itself in and making it even more difficult to remain viable in the US market long term.

Mercari

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Liz Morton is a 17 year ecommerce pro turned indie investigative journalist providing ad-free deep dives on eBay, Amazon, Etsy & more, championing sellers & advocating for corporate accountability.

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None Such
All these promotions carry a strong whiff of desperation. Free advice to the CEO: revert back to fees on sellers, promote the site as “fee free” for buyers. Yeah, 180 degree turn but better to admit a mistake than keep driving the company into the ditch.

Recent Comments
Avatar Placeholderterry5515 hours ago
Sales down 40% from last year, this is gonna be a small business killer
Avatar PlaceholderJaeLynnYesterday
I've had this happen a few times, and it confused me. One seller alleged that they had to use Amazon's services to make sure I got my item in time. I recently bought something simple, and the seller made a mistake. They'd sent me 3 different messages, one of them too early, telling me they hoped my item arrived in perfect condition. The next day, the item was marked as shipped, and I got an official Ebay shipping email. The seller was using direct messages to give me item updates. If I wanted Amazon, I'd have used them myself! lol
Avatar Placeholderlessthanthreerecords2 days ago
Happening to me too. On my active listings page (with the full list) it looks fine, but when I click on them, many have the random characters. I reported it, and that's when one glitch led to another! As I was typing the message after clicking the "?", letters were repeatedly not coming up (usually one or two at the end of a word). I was finally able to get the message entered, but how tedious!