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Lixtor marketplace plans to increase its critical-mass
Posted on 15-Dec-2014 15:05. | Tags Filed under: News.

Auckland-based company Lixtor is an emerging competitor to Trade Me’s strong presence in the local second hand online market.

Lixtor’s CEO Henry Aung explains that if TXT is to Texting, and PXT is to Picture-texting, then listing should be LXT, and Lister should become Lixtor.

And then there’s a price-tag to signify the “marketplace” nature of the site. Henry Aung notes that Lixtor provides users with the same feature set as Trade Me but it does not charge a success-fee.

“It’s a chicken-and-egg problem”, said Henry, who said Trade Me maintains a monopoly in New Zealand because “sellers want to sell at the marketplace that has the most buyers, and buyers want to shop at the marketplace with the most sellers.”

He continues saying "A classic example of this problem in a different industry is the telecommunications sector. The more people who own telephones, the more valuable the telephone become for their owners. This creates a positive externality because a user may purchase a telephone without intending to create value for other users, but does so in any case."

Online social networks work in the same way, with sites like Twitter and Facebook becoming more attractive as more users join.

However, he believes he has found a way to solve this problem by rewarding buyers to shop at Lixtor. This Christmas Lixtor will select one lucky buyer to win back all the money he/she spent on Lixtor website, up to $1000.

"This will stimulate buyers who are in any case will be buying presents for Christmas to buy at Lixtor instead of say Trade Me. As a result, more and more sellers will start to sell on Lixtor too. That’s the theory anyway."

Users interested in the competition need to become a verified-member of the site to participate in the draw. A user becomes a verified-member when he/she makes the first credit to his/her Lixtor pre-paid account. The theory is that this prevents users from creating dummy accounts to increase their chance of winning the prize, while also creating a larger verified-members base for the site, which is one of the key points to overcoming the “critical-mass” problem.

The money deposited in the Lixtor account becomes an account credit and can be used to create enhanced-listings with paid-for features such as listings with bold-title, highlighted or appearing on homepage.

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