• There are more risks for buyers than sellers, because of uncertainty about the goods being purchased
• There are differences in perceived benefits between experienced and inexperienced participants in the secondhand market

 

The online secondhand market is a 10 trillion won industry. As of July 2016, “Joonggonara”, the largest Korean secondhand market website, has over 14.59 million members – one in four Koreans is a member. In this large secondhand market, there has been a rapid increase in the number of victims of fraud. According to cybercrime statistics from the National Police Agency, reports for fraud in the secondhand market skyrocketed from 46,000 in 2014 to 63,000 as of October 2015. The actual number of cases is predicted to be greater, because of unreported cases for smaller losses (Digital Times, 2016). Because Joonggonara does not directly regulate or monitor trade, participants cannot be compensated for disputes that arise, and there is more risk associated with the quality of the goods sold, because those goods are secondhand.

 

Nevertheless, Joonggonara allows sellers and buyers to directly communicate and negotiate, offering secondhand goods at more affordable and reasonable prices.

 

Park et al. (2017) conducted their study after recognizing the possibility of an additional factor for preventing and combating dangers against trading on Joonggonara. A cost benefit analysis was used to consider the options influencing buyer gains from secondhand trade on Joonggonara. The deducted benefit was the use of direct interaction to purchase items at a reasonable price through buyer-preferred methods, while the cost was the uncertainty regarding seller information on the goods.

 

According to the results of the study, during secondhand trade, buyers face greater risk than sellers from uncertainty about the item. More perceived gains were attributed to economic benefits from direct communication with the seller (regarding additional information and price negotiation) than were attributed to trade convenience.

 

An investigation of the differences in perceived values and costs between experienced and inexperienced participants in secondhand trade showed that economic benefits had a significant impact on the perceived values for the former, while interaction and convenience impacted the perceived values for the latter. Additionally, the risk of lateness only influenced experienced participant intentions to make a purchase.

Based on the findings of the study, researchers proposed that to increase the economic benefits and level of direct interaction between sellers and buyers, real-time messengers and services connected to mobile messenger apps are necessary, in addition to the currently available comment and message features. By developing a system that allows participants to more directly and actively interact to exchange information on goods and negotiate prices, customers will perceive even greater value.

 

Furthermore, as a characteristic of secondhand trade, product information uncertainty is perceived as a greater risk to buyers than uncertainty regarding the seller. Therefore, to maintain high information quality, sellers should post information on every item, using select processes or recommended formats, including photos of the goods. Through this process, ways to resolve buyer issues concerning information should be explored.

 

The e-Business Studies, 2017, 18(1) : 3-20