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Web Classifieds Popular Amid Economic Uncertainty

Used goods are finding a new life on U.S. classified sites, as a growing number of consumers wary of a weaker economy search for bargains online, according to data from eBay's Kijiji.com.

While not an official benchmark of consumer sentiment, activity on the site points to accelerated interest among consumers to find better values for their most-expensive purchases in a period of steadily rising fuel and food prices.

Others are using the free classifieds site to pocket extra cash by cleaning out their cache of possessions, or to offer novel services to supplement their income.

For example, listings for motorcycles and bicycles have grown nearly 300 percent on the free site since January, compared with overall 60 percent growth for its wider Cars & Vehicles category in that time.

A spike of the same magnitude occurred in ads for cameras, phones and computers versus 80 percent overall growth of general "for sale" items, Kijiji.com executives told Reuters.

"We've been growing quickly as a site, but 300 percent really pops out," said Martin Herbst, general manager of Kijiji.com, adding that consumers may be selling higher-value goods first as they try to clear out what they don't need.

"The idea being, if I want to get extra cash in my pocket, I will get more from a Yamaha bike" than smaller-ticket items, Herbst said.

The rate of reply to the ads is also telling, with motorcycle and bike listings seeking a 200 percent surge in responses since January. Replies to ads informing users of local garage sales have also quadrupled in that time.

Kijiji launched last year in the United States as eBay (NASDAQ: EBAY) expanded its global classifieds business. The site now attracts 4 million monthly unique visitors.

"Classifieds work well both in a recession and not in a recession since consumers are always looking for good values," Herbst said. "I wouldn't say we are a recession-strong business,"

Kijiji is one example of Web companies whose businesses can shed more light on consumer behavior based on the data they collect.

Internet search leader Google (NASDAQ: GOOG) says it has not been hurt by the downturn. But it has described its auction for paid search listings as mimicking "what the GDP looks like" based on the decisions of its advertisers to pour more or less money into a given consumer category.

eBay is locked in a legal dispute with online classifieds leader Craigslist.com over its minority stake in the privately-held company. Craigslist has accused eBay of using its stake in the company to glean competitive information for its own classifieds business.



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