New shopping app has prices that drop every second – but there’s a catch

Photo credit: Tech in Asia’s Andre Gunawan.

Global ecommerce spending is predicted to grow to an eye watering US$2.5 trillion by 2018, accounting for approximately 9 percent of all retail sales. As cheaper smartphones proliferate, high-speed internet continues to roll out in underserved areas, and economic growth in countries like the US and China continues unabated, it’s likely that we won’t be witnessing any slowdown in ecommerce activity either.

But the problem for new startups trying to carve out a slice of the ecommerce pie is an issue of differentiation. Most stores are vanilla products – you log on to the site, search for products that interest you, compare prices, and place your order. The likes of Amazon, Lazada, Flipkart, and Alibaba already have millions of items for sale. Why should a user buy from someone else, someone unproven?

That’s precisely how iBuySell aims to set itself apart, says Kaustuva Mukhurjee, the startup’s CEO. The startup is a mobile shopping marketplace with a very unique thing – a “live sale” section where new products across several categories are listed every few minutes. The price of each item drops every second until one person decides to purchase it, thereby “locking” it.

Once the price is frozen, the item is taken offline and reserved for the shopper. It does not follow a bidding mechanism similar to how eBay functions. Shoppers have to decide whether to wait for the price to drop further, in which case they risk losing it to someone else, or purchase straight away.

Screenshot of the iBuySell site

Moving fast

Kaustuva says there’s plenty of incentive for sellers to come onboard the marketplace too. There’s initially a free, one-month-long trial through which they can familiarize themselves with the dynamics of the store. Afterwards they have the option of paying a transaction fee anywhere between 5 and 15 percent or a monthly subscription fee which starts at US$29.

The discounts window is small, lasting about 90 seconds.

“Listing process is simple and fast for sellers – click some product pictures and upload from their phone or desktop. Enter the item title, description, a few details such as size, brand, and shipping costs,” he adds.

The trick behind the whole thing is that prices do not fall under a minimum ceiling indicated by the seller. Kaustuva says this helps eliminate the uncertainty associated with online auctions as sellers do not know what price they might get and may also end up sustaining losses.

So far there are about 200 sellers in Asia, with the majority of them based in India.

On the site there’s a broad range of products available for sale – from jewelry and bags to electronics and lifestyle goods. Sellers are banned from selling counterfeits. If they list any brand names then they also have to upload proof of authenticity such as serial number or item code, etc.

Kaustuva explains the idea for his store came about after he thought the online bidding systems on sites like eBay were frustrating and time-consuming. They didn’t like waiting 7 days for the auction to close or bidding several times in order to nab the item.