It’s a picturesque Saturday morning on a wine farm somewhere in Cape Town, South Africa. The sun casts golden rays across rows of gleaming cars parked neatly in a sprawling field. The lineup is unusual, featuring Anglias and Morris Minors, vintage Porsches, Italian sportscars, and a few iconic Mustangs. Their proud owners stroll among them, pausing to admire one another’s vehicles and swap tales of breakdowns, repair bills, and fuel economy (or lack thereof).
Surrounding the field, banners for Cars.co.za – a leading local online vehicle marketplace – flutter in the breeze. Yet, surprisingly, none of the cars on display today are for sale. So why has Cars.co.za arranged and sponsored a car event that isn’t focused on selling cars?
The answer lies in one word: community.
Over the past decade, online vehicle marketplaces in South Africa have surged, with new players like Weelee, CHANGECARS, and Surf4Cars entering the fray. Cars.co.za, the second-largest platform in the sector with 5.1 million monthly visitors, faces a tough battle for attention in this crowded space.
To stand out, Cars.co.za has embraced community building as a strategy. They launched SentiMETAL in 2017 as a way to connect with a community of car enthusiasts who live and breathe rare, exotic and collectible cars.
The SentiMETAL content crew travels all over South Africa, interviewing car owners and learning more about the special machines they own. These car owners participate in the breakfast runs and events organised by SentiMETAL (most of which are free to attend), not because they are interested in buying or selling, but because they enjoy the opportunity to connect with others who share their passion.
Although the ROI of SentiMETAL events can’t be measured in numbers of cars sold, the SentiMETAL videos on the platform’s YouTube channel have attracted hundreds of thousands of views, which has helped grow Cars.co.za social media following (across all platforms) into the largest of any vehicle classifieds brand in South Africa. This translates to increased brand awareness, user engagement, and ultimately, sales conversions over time.
Does every marketplace need a community?
Not all marketplaces are ideal for community building. In some cases, the very nature of their interactions makes relationships between users unnecessary or even counterproductive.
Take an on-demand, commoditised platform like Uber, for example. Its model thrives on efficiency and simplicity; users and drivers interact briefly, often anonymously, and with no expectation of forming a relationship.
Certain B2B marketplaces face the same issue, like Flexport, a meta platform and highly-managed marketplace that connects suppliers with selected ecommerce platforms and major retailers via curated logistics service providers. While they offer various resources and educational materials, Flexport’s primary focus is providing a seamless and efficient platform for its users to conduct business. A marketplace community takes a backseat because it’s simply not core to the value they offer.
However, these examples are the exception, not the rule. For most marketplaces, community building adds layers of value that go beyond the transactional. Sellers can share expertise, provide inspiration, and offer tips that enrich the buyer experience. Buyers, in turn, contribute by sharing feedback, articulating challenges, and even co-creating solutions. When done right, this dynamic creates a feedback loop that strengthens loyalty and drives growth.
The marketplaces that truly thrive in this space are those that bring people together around a shared interest or passion:
Chewy, a marketplace for pet products and services, provides pet owners with community resources that enhance their relationships with their pets. Their dedicated blog, beChewy, features everything from lists of pet name suggestions to interviews that showcase the animal lovers behind their most popular products.
Reverb, a platform for secondhand musical instruments, engage music-lovers with video interviews where well-known artists discuss their favourite instruments and go-to gear.
Ravelry, a hub for knitters, crocheters and hand weavers, is another great example. Yes, they present an opportunity for people to sell patterns and yarns, but they also facilitate a large number of interactions via forums, groups and events for crafters.
These marketplaces succeed because they understand that for their users, connection is part of the value provided.
What are the benefits of community in marketplaces? Just ask Sephora.
Many marketplaces still think of communities as nice-to-haves, when in reality, an engaged community can be a fundamental growth driver. Sephora, an international beauty product marketplace, is a good example. With over 6 million Beauty Insider Community members, who have collectively generated more than 3 million posts since 2017, it has built arguably the largest beauty-focused community in the world.
Online revenue has grown from $800 million in 2017 to $3.5 billion in 2024, a trend that is mirrored by a commensurate increase in Beauty Insider Community membership. Correlation or causation? Let’s take a closer look.
Engagement, loyalty, and network effects
When customers feel a genuine connection to the community that surrounds a brand, loyalty naturally follows. The numbers confirm it: according to this research, 81.6% of consumers are more inclined to explore new products when they’re part of an online brand community.
This translates strongly to recurring purchases on marketplaces. Sephora reports that its Beauty Insider members drive the majority of its sales. The programme, which is free to join, features three annual spending tiers: Insider ($0 to $349), VIB ($350 to $999), and Rouge ($1,000 or more).
Sephora has been especially adept at using community events to drive that buyer loyalty. In 2024, it launched its inaugural Rouge Celebration Event, a four-day series of in-store and online experiences exclusively for its highest spenders. Rouge members enjoyed access to product demonstrations, virtual masterclasses, and early shopping opportunities for new products from brands like Drybar and Givenchy. Held across the US and Canada, the event saw impressive participation from Rouge members.
“For Sephora, launching in-person activations like the Rouge Celebration Event is a way to keep its members engaged.”
This engagement extends beyond the individual. As more members join the community and provide data through their purchases and interactions, Sephora can refine its recommendations and offers. More members also means more reviews, more content, and a wider range of experiences to learn from, enriching the overall experience for all participants. Network effects in action.
Transparency, trust, and the voice of the customer
Autenticity is one of Sephora’s strongest assets, and it’s something they’ve nurtured carefully through their social media presence. They use platforms like Instagram, TikTok, and Facebook for more than just showcasing products, instead turning them into channels where customers can share their stories, reviews, and beauty routines.
By encouraging users to share their personal stories, honest reviews, and beauty routines, Sephora reinforces its reputation as a brand that genuinely listens to and learns from its community. This approach also ensures that Sephora is seen as a brand agnostic, neutral source of information on beauty products. Community interaction helps unlock a sense of trust by giving customers direct access to real people’s reviews and opinions, rather than only Sephora’s marketing messaging.
More than any customer survey would, these online conversations give Sephora invaluable insights into what their customers really want, which helps them refine products and experiences in a way that feels personal and relevant.
Measurable impact of community building
Metrics such as repeat purchase rates, customer lifetime value, and transaction volumes all improve when marketplaces invest in community building. Engaged customers tend to buy more often, spend more per transaction, and recommend the platform to others.
In Sephora’s case Beauty Insiders are more likely to spend more over time as they explore new products, discover brands, and participate in exclusive events. The heightened engagement inside the community has delivered measurable results: a 22% boost in cross-sell and a 13 – 51% rise in upsell revenue.
Sephora’s strong emphasis on customer experience and community building also contributes to a high NPS. Satisfied customers become brand advocates, sharing their positive experiences with friends and family, which drives organic growth and reduces reliance on paid acquisition channels.
Lower customer acquisition costs and increased revenue
Acquiring new customers can be a costly endeavour, with research showing that hooking new customers can cost 5 to 25 times more than retaining existing ones, depending on the industry. This highlights the importance of focusing on customer retention, where the likelihood of success is significantly higher. The probability of selling to a new customer is just 5-20%, whereas selling to an existing customer has a much greater chance of success, ranging from 60-70%.
By creating an ecosystem where customers feel connected and engaged, Sephora ensures that loyalty translates into consistent revenue. This strategy pays off: 65% of the company’s revenue comes from returning customers, while only 35% comes from new shoppers.
One of the areas where the Sephora community really shines is when their customers start recommending products to each other. The magic of the community effect is that this happens in an unforced, natural way, as seen in the screenshot below. A discussion on products included in one member’s morning skincare routine inspires other members to check these products out, with one even adding a product to her wishlist as a result of the conversation.
How to create a marketplace community
Building a thriving marketplace community begins with a deep understanding of the distinct groups that form it. This often means recognising the differing roles and needs of buyers and sellers. Buyers may prioritise trust, ease of use, and access to reliable reviews, while sellers often value visibility, sales tools, and a platform that supports their business growth.
Community-building strategies must cater to these unique motivations rather than taking a one-size-fits-all approach. For example, creating spaces for buyers to share product feedback or participate in loyalty programmes leads to increased trust and engagement. On the other hand, offering sellers resources like performance insights, promotional opportunities, and networking events helps them succeed within the marketplace. By tailoring efforts to each group’s specific needs, marketplaces can cultivate a balanced ecosystem where both buyers and sellers feel valued and supported.
Segmenting users based on traits and behaviors enables marketplaces to tailor community experiences that resonate with distinct groups. For example, geographic segmentation allows marketplaces to present targeted messaging according to a customer’s location. A clothing marketplace like Yaga might showcase different products to online customers based on regional weather patterns, highlighting winter apparel to those in colder climates and lighter clothing to those in warmer areas.
Amazon collects vast amounts of data on its customers, including age, location, purchase history, and browsing behavior. They use this data to personalise product recommendations, tailor advertising campaigns, and offer targeted deals to specific demographics. For example, they might offer discounts on baby products to young parents, or electronics to young professionals.
Strategy 1: User stories
Customer interviews and testimonials build credibility by sharing authentic experiences. Rover, a platform that connects pet owners with trusted sitters and walkers, illustrates this beautifully. Testimonials from pet owners highlight the peace of mind they’ve gained from Rover’s services, while sitters share how the platform has enabled them to turn their passion for animals into meaningful work.
Celebrating users’ achievements can demonstrate the value of the platform and amplify the voices of the community. Airbnb excels at this by highlighting success stories from both hosts and guests. This includes stories of hosts who have transformed their spaces into welcoming havens, as well as guests who’ve had great experiences.
Strategy 2: UGC
According to Edelman’s Trust Barometer, 76% of consumers view content shared by their peers – fellow customers – as more authentic and reliable than brand- or platform-owned content. User-generated content (UGC) strategies tap into this trust factor, turning happy customers into advocates and their stories into marketing gold.
TripAdvisor gets this. Their “Dream Trips” feature invites users to share their ultimate travel itineraries, mixing real experiences with bucket-list destinations. These posts inspire others to plan their own adventures while showcasing what’s possible with the platform’s tools. It’s community-driven inspiration, and TripAdvisor hardly has to say a word.
For communities that thrive on information-sharing, a searchable knowledge base is invaluable. Ravelry, the knitting marketplace which was mentioned briefly at the start of this article, is a textbook example of a knowledge base at work. When a handcrafter gets stuck or faces a challenge in the middle of a creative project, they can easily turn to Ravelry’s knowledge base for help – and if the answer isn’t easily found, they can ask their question on the community forum.
Forums are a particularly inspired way to encourage community members to engage directly with each other. These spaces allow for peer-to-peer support, networking, and collaboration. For example, Fiverr’s community forum provides a virtual hub where freelancers can discuss work-related challenges, share tips, and seek advice from their peers. These forums strengthen the bonds within the community and add value to users by addressing their practical concerns and offering collective wisdom.
Strategy 3: Events
Events offer a powerful way to create and strengthen marketplace communities.
Affordable Art Fair, for instance, leveraged its highly successful physical art fairs to drive traffic to its nascent online art marketplace. By giving art enthusiasts the opportunity to meet artists face-to-face and discover new works in a festive setting it planted the seeds for further engagement on its platform.
Similarly, workshops, networking sessions, and celebratory meetups can significantly enhance community engagement. For example, Etsy, a global online marketplace for handmade and vintage items, hosts “Etsy Labs”. These are workshops where sellers and buyers can participate in hands-on crafting sessions, fortifying their sense of community through skill-sharing.
Co-working spaces like Venture X host a variety of events, including structured networking sessions, casual “happy hours,” and guest speaker series, offering a supportive community for professionals seeking a collaborative environment.
These events not only facilitate skill development and knowledge sharing but also create opportunities for members to connect, collaborate, and build lasting relationships within the community.
Strategy 4: Knowledge base
When a community has access to reliable, engaging information, it becomes a space where shared knowledge sparks meaningful conversations and collective growth. Switch2Zero, is a sustainability platform that helps businesses reduce their carbon footprint. Their blog covers topics that resonate deeply with their audience, such as carbon offset strategies, innovative green technologies, and easy-to-adopt habits for a sustainable lifestyle.
Every community needs support
In communities as in life, interactions don’t always go to plan. When conflicts arise between buyers and sellers, customer support plays the vital role of a neutral mediator, ensuring everyone gets a fair resolution. Airbnb, for instance, has a “Resolution Center”, which provides a structured process for resolving disputes. If a host identifies damages or issues post-checkout, they can submit a compensation request through the Resolution Center. This involves selecting the relevant reservation, specifying the reason for the request, and providing detailed information about the damages and associated costs.
Guests can also use the Resolution Center to address issues encountered during their stay. This includes requesting refunds or compensation for problems experienced. The process requires selecting the pertinent reservation and detailing the nature of the issue.
If direct communication through the Resolution Center does not yield a resolution within 72 hours, either party can request Airbnb’s involvement. A dedicated Airbnb team member will then review the case, consider the information and evidence provided by both sides, and arrive at a fair decision.
Proactive support makes a big difference. Anticipating common questions and providing resources like FAQs, help articles, and video tutorials can significantly reduce the need for direct interactions. It’s about empowering users to find solutions on their own while knowing help is always available if needed.
Platforms like TaskRabbit take it a step further by not just offering support but also actively investing in their community. They provide taskers with training materials, safety tips, and access to forums where they can connect and learn from each other. This approach builds a sense of belonging and mutual respect, which keeps users engaged and loyal over the long term.
A marathon, not a sprint
Building a sustainable community starts with figuring out who your target audience is and what their community preferences are. This requires steady, meaningful interactions, a commitment to listening and evolving, and a genuine focus on the needs and growth of the people in the community.
Marketplaces that want to follow a community building strategy should therefore realise that it’s not a short-term project. It takes more than just resources – it takes patience and consistency.