How will 2024 look like for online classifieds marketplaces?

As we embark on the new year, Joreca has undertaken a review of the macro dynamics of the main classifieds markets in 2023. Analysing the top classified real estate and automotive markets, we have detailed herewith, our expectations to what 2024 holds for marketplace businesses.

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Marketplaces: Four main different contexts

At Joreca, drawing upon our wealth of more than 10 years of experience, we recognise that during periods of heightened market tension, marketplaces have the potential to capitalise on their strategic positioning. Acting as the intermediary between sellers striving to distinguish their offerings in an increasingly competitive landscape, and discerning buyers who require more persuasion, our services become pivotal and even more valuable.

In other words, when the market inventory size grows in tandem with the number of dealers, marketplaces likewise find themselves in a favourable business context, allowing for price increases and providing room for challengers. Conversely, a decline in both key performance indicators signals a potential global decline for marketplace businesses.

On the other hand, market size and the number of advertisers evolving in different directions reveals uncertain contexts for marketplaces. A drop in the number of dealers coupled with a simultaneous growth in the number of listings, may signify a market concentration within larger dealerships, bolstering the position of large marketplaces whilst potentially weakening smaller ones. An increase in market automation, with more dealers but fewer listings, may lead to a reduction in spending per dealer, impacting the average revenue per advertiser.

What can we anticipate for 2024?

To build on our forecast about what are the main trends for 2024 regarding each of the markets that we cover, we have measured the 2023 market situation development based on the pre-covid period, which still represents the key reference point for the traditional business landscape. 

Whilst comparing 2023’s market situation with the pre-Covid market is indeed informative, it doesn't however fully shape our 2024 predictions. The business context for marketplaces for this year is poised to be significantly influenced by the forward-looking assessments of advertisers, who, in turn, derive their perspectives from the short-term market dynamic developments.

By tactfully considering short-term reflections with a broader, long-term outlook, Joreca recognises a nuanced trend, and we can see that 2023 – whilst looking at it from a pre-Covid perspective – may have felt more dynamic than it was.

Market Expectations: Real Estate Classifieds

Potential “Happy times”

France and the UK – to a certain level – may experience a positive 2024. Volumes are up again thanks to a gradual sales rotation decrease.  In search of greater exposure, as well as increasing the number of agents, should see more investment in marketing. The numbers have remained stable for these markets or have even risen over the last 12 months, and thus look set to continue their upward trend again this year.

Potential “Risky times”

In stark opposition to these abovementioned two countries, Germany, Brazil, Spain, Italy and the US may encounter some bumpy roads ahead in 2024. Whilst inventories are going up, the number of active agents in contrast is decreasing, therefore potentially and significantly putting more pressure on local N2 or N3 marketplaces.  

Market Expectations: on Automotive markets

Potential “Happy times”

In Brazil, 2023 saw an improvement in comparison to pre-Covid heights, but not as favourable as results recorded in 2022. The dynamic reveals a decrease in the growth of advertisers with an increased volume of listings. In 2024, maintaining a favourable business environment might bring new challenges for marketplaces to capture all listings and help advertisers to sell their stocks faster.

Potential “Risky times”

Although both the German and Spanish markets are in worse shape than pre-Covid, 2023 saw a substantial rise in listings for these countries. Dealers, still below their pre-pandemic levels (including a significative number of non-paying professional publishers disappearing due to the monetisation on free portals in Spain), may indeed act as if they were overstocked, potentially accepting price increases for more guarantees to sell their stocks whilst – at the same time – challenging rotation ratios.

Additionally, France and Italy, who both maintained a similar level of advertisers just below pre-Covid levels, have also likewise shown a considerable growth in dealer listings during 2023. Moving into 2024, dealers might continue with this cognitive bias, acting as if they were overstocked, investing more on marketplaces, whilst having similar stock levels to those of the pre-pandemic era.

Potential “Winner takes all” to “Bad Times” markets

Lastly, the US and the UK markets witnessed stability in 2023 after a substantial decline over previous, recent years. 2024 might arguably continue as a year of consolidation and restructuring, absorbing the complicated challenges encountered during 2023.

Conclusion 

In conclusion, it is important to reiterate that the pre-pandemic period can indeed still be considered as the “old normal”, and still provides an effective comparison point to understand how the market context has evolved.

Upon looking at and analysing the gap between these two trends, Joreca observes that – in most of the markets – 2023, whilst looking at it from a pre-Covid viewpoint, may have felt more dynamic than it indeed actually was.

Consequently, to define our projection concerning the main trends for 2024 – related to each of the markets that we cover – we have reflected on 2023’s situation comparing two trends.

Firstly, by comparing the 2023 market situation with the pre-Covid period, this has informed us about how it has changed and developed compared to the “old normal” context.

Secondly, whilst associating 2023’s market position with pre-Covid levels is revealing, it’s crucial to note however that it doesn't fully outline our predictions, as the 2024 business context for marketplaces shall largely be driven by advertisers’ anticipations, which – in addition – calls for looking at 2023 from a short-term perspective.