TOKYO -- Japanese flea market app Mercari began on Thursday an anonymous shipping service in the U.S. with UPS as it looks to attract users in the country by allowing sellers and buyers to hide their personal information.
The service is available on the U.S. version of the app, which offers 100,000 items daily. Sellers bring items sold through Mercari to one of about 5,000 UPS locations for packaging and shipping.
UPS staff scan a two-dimensional bar code on the app after the sale to obtain the seller's and buyer's information. The U.S. delivery service will then package the item with only the buyer's address so that neither party can see the other's address.
Shipping will cost $20 for the first 4.5 kg, and rise from there. The service is more expensive than the most common delivery methods used on Mercari -- a $13 fixed rate from the U.S. Postal Service or $9.80 from FedEx -- because UPS handles the packaging as well.
Consumer-to-consumer sales have taken off faster in the U.S. than in Mercari's home market of Japan. Competition in the U.S. market is fierce from both established players like eBay, which booked sales of almost $10 billion in 2017, and startups like California-based Poshmark. Anonymous delivery services, however, have yet to gain traction in the country.
Users can ask delivery companies to conceal their information at some point during shipping, but doing so takes time and effort. Many users on eBay message boards have said that they would like to hide their address.
Mercari began anonymous deliveries in Japan in 2015 together with Yamato Transport. The service is thought to be a source of the company's meteoric growth by attracting users previously uneasy about flea market apps. Rivals Rakuten and Yahoo Japan followed with similar services soon after.
The app launched in the U.S. in September 2014, about a year after Japan, and has 40 million downloads in the country. Gross merchandise volume there was $71 million from July to September, a 77% jump on the year. But the company's recognition and scale of service pales in comparison to Japan, where 99 billion yen ($873 million) in goods were shipped during the period.
Mercari booked a consolidated net loss of 2.8 billion yen in the July-September quarter. The app operator's share price has slumped, sinking its valuation to about 400 billion yen from 717 billion yen upon listing in June. As investors scrutinize the stock, the importance of the company's sole overseas market -- the U.S. -- is growing.
Mercari is bringing a strategy proven at home to the U.S., but competitors like Poshmark are capable of following suit. Mercari will likely need to find other ways to grow in the American market.