What is a local online marketplace?

Definition of a local marketplace

A local marketplace, like any other marketplace, brings buyers and sellers together, but with a focus on a particular local market. Depending on the scope, local can be at the national, state, district, city, or municipality level. So, the buyers and sellers transact within the scope of a localized setting.

So why do marketplace admins limit a platform to a specific location when they can reach everyone online?

There are various cases where having a local online marketplace makes sense.

In general, marketplaces where the buyer and seller need to meet face-to-face will benefit from a local focus -- at least in the beginning. They can solve problems specific to the particular region and create value for both parties much more easily than aiming for global reach from the get-go.

A good example of this is 99, a ride-sharing company in Brazil. By focusing on the Brazilian market, it understands the local market better and outcompetes global players like Uber. Grab in Thailand and Ola in India are other similar examples.

Similarly, many peer-to-peer rental, secondhand goods, and social interaction marketplaces have local components built into them. We'll explore some top local online marketplaces in a minute.

But, the local marketplace model isn't limited to niche players. Global marketplaces can have a local component, too. There are many platforms that segment their users by location. Thus, sellers are matched with buyers from the same location.

Airbnb, Uber, Turo, and Thumbtack are all examples of global marketplaces, but their offering is, by nature, local.

Furthermore, even marketplaces that don't have local offerings can benefit from a local constraint. For example, Amazon has a specific, separate website for every country. In the US, it is Amazon.com, while in the Netherlands it is Amazon.nl, and so on. Unless you prompt, Amazon will show you the sellers from the Netherlands if you're in that location.

Key characteristics of local marketplaces

To clarify whether a marketplace has local intent or not, you need to look at certain characteristics. These are:

• Geographic focus. A local marketplace always focuses on a certain geography or a set of geographies. That is the fundamental aspect of a local online marketplace.
• Community-oriented. Local marketplaces are often built around a certain community, usually based on location. Local Facebook Marketplace groups are a prime example. They are designed to bring the community together and facilitate transactions within that community.
• Local services and experience. Marketplaces with a local focus often focus on facilitating local services. This could mean house cleaning, home renovation, food delivery, grocery delivery, etc., where the service providers need to be in the same location as the buyer.
• Face-to-face interactions. Many marketplaces with a local focus are designed to facilitate offline interaction after online interaction. So, one party has to travel to another party to provide their service. Local services are a great example -- think Airbnb, Uber, or Thumbtack, for instance.
• Location-based filtering. A key feature of a local marketplace is that buyers can find sellers based on location. This can be achieved by a location-based search. Some platforms might even ask for location access prior to login and use location information to automate the matching experience. This is a characteristic of a local platform that connects buyers and sellers in a particular locality via a map-based interface.
• Diverse listings. Although not always, local marketplaces can include a wide range of products and services, from secondhand goods and homemade crafts to local business services. So, the marketplace might have a strict local focus but a horizontal offering.
• User verification and vetting. Because these marketplaces facilitate offline interactions, certain background checks are often in place for the parties involved. Particularly for trust-intensive local services like baby-sitting or other care services, mechanisms to build trust can be critical. This ensures the safety of the members, making the platform trustworthy.
• Compliance with local regulations. Platforms that serve a local market often display accreditations received by local regulators. This is a sign that they are focused on a certain geography.
• Simplified logistics. Local marketplaces can thrive without handling any logistics (like shipping) because the parties meet in person to exchange goods or services.

A local online platform may or may not meet all of the above characteristics, but it will meet many. So, look for these characteristics when researching competitors. You can also incorporate these features into your marketplace if you're building one.

Examples of a local online marketplace

Now, let's look at some real-life examples of online marketplaces. There are scores of marketplaces out there, and many types of marketplaces can have a local element.

Let's look at two groups: the top 15 local marketplaces for selling items, and 10 marketplaces with a local element featured on VC firm Andreessen Horowitz's list of 100 top marketplaces of 2024.

Top 14 local marketplaces for selling items

Peer-to-peer product-selling marketplaces are perhaps the most common example of local marketplaces. These marketplaces facilitate local deals between buyers and sellers, thereby creating value.

Some of the top local product-selling marketplaces include:

1. Craigslist
2. Facebook Marketplace
3. OfferUp
4. LetGo
5. Nextdoor
6. eBay Classified
7. VarageSale
8. 5miles
9. Mericari
10. Poshmark
11. Bookoo
12. Trove Market
13. Swappa Local
14. Wallapop
15. Depop

Ever since the Internet became a thing, several companies have created marketplaces to facilitate transactions locally. Few marketplaces, like Craigslist, have survived, while others have fallen victim to competition.

Seeing the success and potential, later, companies like Facebook launched their own marketplaces. Facebook Marketplaces allows anyone to list, sell, and buy items within the neighborhood.

The best part about such marketplaces is their convenience. There's no shipping time or charges involved, and payments usually happen outside the platform, which can mean lower transaction fees.

Let's look at 15 local marketplaces that facilitate local peer-to-peer product selling.

Craigslist

Craigslist is often used as a local marketplace for buying, selling, and trading goods and services within specific geographic regions. It segments its users by various cities and regions worldwide.

Craigslist allows users to browse listings and conduct transactions primarily within their local area. You will find all sorts of local services, ranging from handyman services to home rentals to secondhand items on sale.

Facebook Marketplace

Similar to Craigslist, there is Facebook Marketplace, where buyers can view and buy goods and services on offer within their locality.

Facebook Marketplace uses location-based features to show listings from nearby users, making it easy for buyers to find items available for sale in their vicinity. Sellers can create listings for various items, including furniture, electronics, clothing, vehicles, and more, and specify their location for potential buyers to see.

OfferUp

OfferUp is often considered a modern version of Craigslist due to its interface and image-rich listings. At the core, it offers the same value as Craigslist.

However, OfferUp includes enhanced safety features such as user profiles with ratings and reviews, secure messaging, and in-app payment options to enhance trust and security for users. Thus, it's often preferred over others in the same niche.

Letgo

Letgo was a popular online marketplace that allowed users to buy and sell locally, competing against players like Cragislist and eBay. Letgo merged with Wallapop in 2016 and became a part of OfferUp in 2020.

Nextdoor

Nextdoor is a private social networking platform designed for neighborhoods and communities. It allows residents within specific geographic areas, such as neighborhoods or towns, to connect, communicate, and engage with one another online and share information. This community-focused approach made it a billion-dollar company.

There's a "For Sale" section where you can list items for sale or buy stuff from local residents.

eBay Classifieds

eBay Classifieds is a Craigslist-like classified service launched by eBay to help users list and discover local deals.

As you know, eBay is a global marketplace that connects buyers and sellers worldwide. However, the local classified service allows users to list items for sale in categories such as clothing, electronics, furniture, home appliances, toys, collectibles, real estate, and more.

VarageSale

VarageSale operates as a closed, members-only community where users must join specific "yardsale" groups based on their geographic location to participate in buying and selling. Thus, it has a strong community focus.

Each VarageSale group has its own set of rules, guidelines, and membership requirements, which the members moderate. Thus, the groups feel more intimate, personal, and trustworthy.

5miles

In the local online marketplace landscape, 5miles differentiates itself by emphasizing local transactions within a five-mile radius of the user's location. This focus on proximity makes it convenient for users to find items available for sale nearby and reduces the need for long-distance travel or shipping.

Mercari

Mercari is a Japanese e-commerce platform that facilitates the buying and selling of new and used items. Focused on the Japanese market, Mercari, like Craigslist, supports listings in a variety of categories, including clothing, electronics, toys, home goods, collectibles, beauty products, and more.

Meracari competes in the local market by offering local pickup services to save sellers' time. There's also a ratings and review system to make the marketplace more trustworthy.

Poshmark

Poshmark is a fashion-focused national online marketplace that doesn't limit transactions to specific geographic regions or neighborhoods in the same way that local marketplaces like Craigslist or Nextdoor do. Instead, it connects fashionists within the entire United States. Poshmark doesn't allow pickup and is therefore not locally focused, but many use it for local sales too because of the ease of delivery.

In addition to buying and selling items, Poshmark runs Posh Parties, which are virtual shopping events. These are fun and interactive ways for users to discover new listings and connect with other members of the Poshmark community.

Bookoo

Bookoo is almost Craigslist but more localized. It lists items on sale listed by your circle, which consists of your friends, family, and the groups you've joined.

The platform positions itself as premium and more family-friendly. Thus, it feels more at home and trustworthy than Craigslist.

Trove Marketplace

Trove Marketplace is an online marketplace platform that specializes in selling and buying secondhand furniture and home decor.

Trove Marketplace enables users to buy and sell items from sellers located across the United States. While users can search for items by location or filter listings based on proximity, the platform's primary functionality revolves around online transactions and nationwide shipping rather than local, in-person exchanges.

Swappa Local

Swappa Local was a feature within the Swappa platform that allows users to buy or sell electronic items locally. Swappa itself is an online marketplace specializing in the sale of used electronics such as smartphones, laptops, tablets, and gaming consoles.

It facilitates in-person transactions but provides buyer and seller protections to ensure secure transactions and reduce the risk of fraud or scams.

Wallapop

Wallapop is another online marketplace platform that connects users looking to buy and sell secondhand goods within their local communities.

Wallapop's platform is location-based, meaning that users can browse listings and discover items available for sale within their local vicinity. This focus on local transactions allows for convenient in-person pickups and reduces the need for long-distance shipping.

Depop

Depop is not primarily a local marketplace like Craigslist or Nextdoor. Instead, it is an online platform that connects buyers and sellers of vintage and secondhand fashion items.

While Depop does not restrict transactions to specific geographic areas or neighborhoods, users can filter listings by location to find items from nearby sellers.

Each of the 15 local marketplaces is distinctive in its own way despite offering the same service, local transactions. Some focus on a particular niche, while others offer enhanced services like user protection and community-driven or social selling.

Top 11 Local Marketplaces in 2024

Every year, celebrated VC firm Andreessen Horowitz compiles the list of 100 top marketplace startups and private companies based on several factors like reach, growth, and user experience, among others. At least 11 marketplaces on that list that have a clear local focus:

1. Instacart
2. SeatGeek
3. Turo
4. RockAuto
5. StyleSeat
6. Houzz
7. SpotHero
8. Thumbtack
9. Teleflora
10. ChowNow
11. Headway

Instacart

Instacart is a grocery delivery service operational in the US and Canada. It allows users to buy groceries from local stores. While it operates internationally, its fulfillment is local. Thus, Instacart asks for your location and shows the grocery stores near your location. This makes Instacart a truly localized marketplace even though it has a global reach.

SeatGeek

SeatGeek is an online ticket marketplace that allows users to buy and sell tickets for sports events, concerts, theater shows, and other live entertainment experiences in specific locations. It is available in Canada, US, and Mexico and requires location access to function as a marketplace.

Turo

Turo is an online peer-to-peer car-sharing platform that allows individuals to rent out their personal vehicles to others on a short-term basis. With its services available in the US, Australia, France, and the UK, it cannot function without the renter and the car being in the same location. Thus, there's a local component to Turo.

Fever

Fever operates primarily as a discovery and ticketing platform for local events, including concerts, festivals, theater shows, exhibitions, workshops, and more. Fever is available in more than 10 countries, but events are listed based on location.

StyleSeat

StyleSeat is an online platform that connects beauty and wellness professionals with clients seeking their services. This includes hairstylists, makeup artists, estheticians, massage therapists, and more -- all services for which a buyer likely isn't willing to travel very far from home. The professionals are from across the US, but their listings are by location.

Houzz

Houzz is an online community platform for home remodeling, design, and improvement. It is available in multiple countries around the world, making it a global platform for home design and improvement. But again, the focus is local: connecting designers with homeowners in a geographic area.

SpotHero

SpotHero connects parking lot spaces and drivers looking to park their vehicles. Because of the nature of the service, it uses location data to connect the two parties. Thus, it has a highly localized service offering.

Thumbtack

Thumbtack is a popular marketplace that connects consumers with local service professionals. Again, it is the nature of the service that makes Thumbtack a local online marketplace despite its nationwide coverage.

Teleflora

Teleflora connects florists with nearby customers looking for flowers. When a customer places an order on Teleflora, the request is sent to a local florist in the recipient's area, who fulfills and delivers the order. The service is present in the US and Canada and works through location-based data.

ChowNow

Rivaling DoorDash and Uber Eats is ChowNow, an online food ordering platform connecting restaurants with locals. With over 14,000 independent restaurants across the US and Canada, ChowNow has a local focus of connecting two sides in a particular location.

Headway

Headway is a mental health-focused online marketplace that connects therapists with people struggling with stress and other mental issues. Again, it is the location-focused business model that makes Headway a local online marketplace.

How does a local focus help early-stage marketplaces?

Are you considering building an online marketplace or currently own an early-stage marketplace?

A local focus can help you get early traction.

Many successful founders credit their success to focusing on a smaller market before expanding to other locations. In our interview with Grubhub's former Chief Product Officer, Casey Winters, we learned that Grubhub initially delivered food exclusively to Chicago neighborhoods. In another interview, Kickstarter's co-founder Charles Adler told us the co-founders focused exclusively on the art community as their first market.

Likewise, Travis Kalanick of Uber conquered the streets of San Francisco before expanding globally. You can find similar traits in many other global marketplaces with a local delivery model.

Essentially, there are three big benefits of narrowing down to a local market.

• Local focus helps solve the marketplace chicken-and-egg problem and build initial supply.
• Local marketplaces reach liquidity faster.
• Local focus makes learning and iterating easier.

Solving the chicken-and-egg problem and building initial supply

Any platform that connects buyers with sellers needs to solve the chicken-and-egg problem. This is about building your initial user base. You need to attract enough buyers to appeal to sellers and vice versa. So, do you go after the buyers first or sellers first?

The best tactic is to go after the side that experiences a bigger pain. Usually, that's supply---sellers usually have more trouble finding customers than vice versa. A local focus can help build initial supply.

First of all, focusing locally broadens the user acquisition tactics you can use.

Gaurav Singhal of Drive lah found potential suppliers for his car-sharing marketplace by placing flyers on car windows around Singapore. Similar is the story of Nomady founders, who went door-to-door talking with landowners after discovering that there was a demand for private campsites.

Greenpal used door hangers to reach homeowners, while Jason Bergman employed a different approach, sending thousands of direct messages via Instagram to athletes to promote his athlete sponsorship marketplace.

Second, a local constraint means your pool of initial users can be quite small -- which is great! You can focus your efforts on onboarding a small group of key suppliers that are the most enthusiastic about your marketplace.

Third, you can onboard your small group of first suppliers with the promise of buyer potential -- and actually deliver on that promise. Finding a small group of local customers for your local sellers is much easier than finding thousands of customers for sellers scattered across the world.

So, if you're struggling with the chicken-and-egg problem, consider niching down. Making a hundred users happy is by far the better strategy than disappointing a thousand.

Reaching liquidity faster

For a marketplace to succeed, sellers need to make sales, and buyers need to find what they're looking for. In other words, you need to increase your marketplace liquidity (the likelihood of transactions).

But it's hard to get users to transact in your early days. Founders often find that it isn't easy to match the right seller with the right buyer. At the same time, if you can't match sellers and buyers, your marketplace isn't solving a problem for your users.

Localizing can help you increase the number of transactions on your marketplace.

First of all, it's easy to balance the number of sellers and buyers within a limited location. This ensures that everyone can find what they're looking for in your marketplace. With a smaller user base, you also have the opportunity to take a more hands-on approach, doing manual work to foster liquidity and create a thriving community.

That's why it's always advised to take baby steps to success. Again -- it's much more important to have a small group of happy users who transact than thousands of registered users who aren't seeing the value of your marketplace.

Learning and iterating

The primary task of any startup is to gather initial customer feedback and iterate its offering to meet the customer's demands. Success is an endless cycle of build-measure-learn. A local constraint can boost learning in several ways.

First of all, if you're building a marketplace for a location close to you, you can meet your sellers face-to-face. Talking to the sellers allows you to deeply understand their needs and enhance their experience, setting you apart from competitors. This can inform your product and business development and help you offer exceptional customer service -- which can be the secret ingredient that boosts conversion rates, fosters loyalty, and generates positive word-of-mouth.

Second of all, it's easier to iterate on your business model if you're starting small. At Greenpal, a lawn care marketplace, the founders learned the hard way that smaller markets are easier to serve than bigger markets. So, they focused on smaller markets with less competition.

Another marketplace, Freightos, discovered that it was easier to serve small importers and exporters from China than to serve global, bigger businesses. So, they turned their focus from global coverage to small Chinese importers and exporters.

The lesson here is to create a growth playbook based on your experiences in one market. This approach allows you to refine your strategy and increase your chances of success as you expand your marketplace to new markets.

Third, with a constrained marketplace, you can take a more managed marketplace approach. This means doing lots of things manually first while your marketplace app is a barebones Minimum Viable Platform. As you learn what works and what doesn't, you can prioritize building more features for your app in a cost-effective and futureproof way.

This approach aligns with Sharetribe's philosophy. Sharetribe helps founders quickly launch their marketplace with the essentials. Once you've proven your concept, you can then keep on adding custom features on the top of Sharetribe's no-code marketplace builder.

Local marketplaces powered by Sharetribe

At Sharetribe, we have helped dozens of local marketplaces set up their platforms from scratch with all the essential tools and minimal coding.

Here are some examples of local marketplaces built with Sharetribe:

The Octopus Club

Octopus Club is an innovative marketplace designed for buying and selling used baby items. This includes items like used toys, clothing, car seats, maternity items -- anything parents and children may need. Users can browse listings from all sellers, or filter to view items that offer "Collection" and sort them on a map view to find sellers close to them. Parents can even list goods as donations and help other parents in need.

Drive Lah

Drive lah is a ride-sharing company from Singapore. Car-sharing is a location-based service, which hasn't prevented Drive lah from making their ambitious growth goals a reality. The company has raised millions in VC funding and expanded to locations across Singapore and Australia.

Swimmy

When summer comes, people yearn to splash into the pools. Swimmy fulfills these yearnings. It's a local online marketplace that connects users with pool owners willing to rent their pools.

Swimmy's founder, Raphaëlle de Monteynard, configured the marketplace in a couple of days without any coding and secured 1,000 registered users in the first summer of operation itself. Later, she customized the platform with code as the business expanded to hundreds of thousands of users. Started in France, Swimmy is now gaining traction in Spain, thereby attesting to the importance of going local in your early days.

Key takeaways

• A local online marketplace is an online platform that connects buyers and sellers within a specific geographic location.
• These marketplaces can either be niche players in a particular geography or have global reach. Even after having global reach, marketplaces can offer location-based services.
• Certain characteristics, like geographical focus, community orientation, and facilitating offline experiences, are often shared by local marketplaces.
• Peer-to-peer goods selling and service delivery are the prime examples of local online marketplaces. Some popular names include Craigslist and Nextdoor.
• On the other hand, Instacart, Uber, and Turo are some global marketplaces that operate in local services (food delivery, ride-hailing, car-sharing).
• Having a local focus early on when building a marketplace can help it solve problems like the chicken-and-egg problem, liquidity, and iteration.