Lala.com an online platform for trading old/used CD’s has raised another 5.75 million dollars to keep them going. Lets try to analyze if similar model can be functional in indian scenario. We do have argument of ebay or craiglist performing well abroad but in india its been used more by small time traders to push goods instead of regular joe willing to get something for their old items.
Few of the pain points which effect this kind of model in indian scenario.
* Micropayments collection is very costly affair hence trade charge of 10 bucx is very hard to collect using credit card (reason why single music track retailing is yet to pickup in india)
* People are still not ready to let go of things they dont need anymore. As the local kabadi walla will pay more than what anyone else would value it. Unlike west where either things goto salvation army or recycling centre. This has lead to shortfall of items for second hand item markets too which are replenishing their shelves with cheap copycats of original items to meets client demands.
So how can one really make it work.
* Try the social networking way to help them connect with people of common interest and enable internal barter.
* Another good way is to help value their items create a stock exchange of items which are based on quality parameters like year old, condition maintained or software way to measure peoples quality based on their social background. So we lure people to list all their movable assets with the website and create profile valuations of their bookshelf, music collection etc.
On the other hand we do a reverse auction or demand management where people list items they would like to have on their shelf hence effecting valuation of assets in exchange. This way people may get tempted to put more items in the exchange for trade. Whats the model you earn per transaction. If jaydaad can do National property exchange why cant their be a second hand goods exchange etc. The key is to regulate exchange by trading only items whose valuation could be managed by the software.
Would invite people to discuss this further and point out problems in the model.