The personal second-hand trading platform Lightning Market will revise its commission policy to increase seller fees starting next month. Analysts view this as a strategic move to turn around operating profit and lock in customers.
According to related industry sources on the 20th, Lightning Market will raise the general seller commission for second-hand transactions from the current 3.5% to 6% starting September 17. For pro shops that sell products professionally, a differential commission of 6-10% will be imposed by category, up from the existing flat rate of 5%.
Additionally, it will launch the payment method service dubbed "Lightning Money." When using Lightning Money, an additional 2.5% of the product price will be deposited to the seller, maintaining the commission at the same level as before, according to the company.
It has been about a year since Lightning Market changed its commission policy last August. Last year, Lightning Market modified its commission policy to require sellers to pay a commission of 3.5% on the product price by using its own secure payment system. Previously, a commission of 3.5% was applied to the buyer in the name of shipping fees. According to the company, the number of reported fraudulent transactions decreased by approximately 80% just two months after the implementation of secure payments.
A representative of Lightning Market noted, "We changed the commission policy while launching the Lightning Money service to enhance transaction convenience and seller benefits," adding, "This is a policy to secure the sustainability of second-hand transactions and improve the transaction environment."
However, there is backlash among app users. One user commented, "Even if I receive Lightning Money, I can't use it on other platforms, so it feels like the commission has been raised anyway," adding, "It seems like a policy targeting second-hand dealers rather than individuals trading used goods."
Lightning Market, established in 2011, is a second-hand trading platform, and in 2020, private equity firm Praxis Capital Partners acquired management rights for about 150 billion won. In 2017 and 2018, prior to the Praxis acquisition, it recorded operating profits of 600 million won and 2.1 billion won, respectively, but has been posting losses since then.
Last July, Lightning Market attracted a series E investment of 40 billion won and announced, "We aim to make this year a turning point toward profitability," while revising its commission system. However, Lightning Market recorded an operating loss of 19.6 billion won last year. Although revenue (44.9 billion won) increased by 31.5% compared to the previous year due to the collection of seller commissions and the introduction of secure payments, it was unable to reduce its operating loss.
According to the Korea Internet & Security Agency (KISA), the domestic second-hand transaction market is estimated to have grown from 30 trillion won in 2023 to 43 trillion won last year. As of August last year, the number of second-hand trading app users was reported as follows: Carrot (21.25 million), Lightning Market (4.67 million), and Junggonara (1.68 million), and this trend is said to have continued into this year.
However, except for Carrot, losses have continued in terms of revenue. Carrot recorded a standalone revenue of 189.1 billion won and an operating profit of 37.6 billion won last year, marking two consecutive years of profitability. Junggonara recorded an operating loss of 2 billion won. KREAM, a subsidiary of Naver that supports second-hand trading services as a limited-edition trading platform, posted a loss of 8.8 billion won last year but recorded an operating profit of 1.9 billion won based on EBITDA.
Junggonara charges buyers a secure transaction commission of 3.5%, and KREAM imposes a commission of 5-6% based on transaction grades for sellers. Carrot does not charge any commission. The reason Carrot is able to generate revenue without charging transaction fees is that its local advertising business is thriving. Having intensified its local advertising business since 2022, Carrot's advertising revenue increased by 48% year-on-year last year. In the first quarter of this year, standalone advertising revenue surpassed 57.6 billion won, accounting for over 99% of the total.