'Flea market' apps offer easy, tax-free transactions

'Flea market' apps offer easy, tax-free transactions

Smartphone apps that let users sell and buy items among each other like a virtual flea market are growing in popularity. Buyers can buy goods at reasonable prices, sellers can seek buyers among the high number of smartphone users, and consumption tax is not applied.

Clothes and baby goods

Yokohama resident Kyoka Watanabe, 23, started to use the Fril app about a year ago. Since then she has bought and sold about 90 items, including a coat.

"The lineup of clothes is continuously updated. It's like window-shopping, and I enjoy it," Watanabe said.

Launched in July 2012, Fril is exclusively for women. According to operator Fablic, Inc., based in Shibuya Ward, Tokyo, a variety of women including young ladies and housewives use the app, and about 6 million items - predominantly clothes - have been put up for sale. The average price is from ¥2,000 (S$421) to ¥3,000, and there are about 1.9 million subscribers to the app.

Flea market apps have appeared one after another over the past two years, in line with the growing popularity of smartphones. Mama Mall is one of them, operated by Digital Identity Inc. based in Shibuya Ward.

Yuki Yamamoto, director of the media division at Digital Identity, said, "Children grow up fast, so many items such as outgrown clothes and strollers are put on the site for sale."

Fixed prices for sellers

Unlike net auctions, in which prices change according to the bidding, online flea markets sell items at fixed prices set by the sellers.

A seller takes a photo of an item, and posts it with a price and related information on the app. Potential buyers apply to purchase an item, instead of ordering it, and if there are multiple applicants, the seller chooses one based on the applicants' comments and other details.

When a deal is completed, payment is received by the operator first. Credit cards are used most often, but there are other options, including paying at convenience stores. In principle, sellers dispatch products at their own expense.

Payments are transferred to sellers by the operator after buyers' receipt of the products is confirmed. This helps prevent such problems as goods failing to be delivered.

Registration and membership is often free, but an about 10 per cent sales commission is paid to the operator once a deal is reached. Consumption tax does not apply to individual transactions.

System relies on trust

However, care must be taken in some respects, as individual transactions depend on the integrity of those involved. Around summer, inquiries began to increase from consumers about flea market apps at EC Network, a general incorporated association based in Tokyo that provides advice on e-commerce trading to consumers.

Director Yuri Harada said: "In one case, a person bought what they believed was a designer item, but it turned out to be a fake. Users cannot always count on operators due to the individual [nature of] transactions. That's why transactions for expensive products are not appropriate [for the online flea market system]."

Some products may have stains or other flaws, or be different from the images posted. Consumers should check other users' evaluations and comments about particular sellers, and ask sellers questions before making purchases.

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