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Facebook Advances Bazaar Ambitions

09/03/2015 | 10:15pm US/Eastern

Facebook Inc. is channeling eBay Inc. in its latest effort to become a trading bazaar.

The social network is making it easier for its 1.49 billion users to buy, sell and trade used items from cars to waffle irons through a Facebook group.

Facebook says more than 850 million people use its Groups feature each month, exploring shared interests ranging from politics to specific diseases.

The company launched For Sale Groups late last year, and has been steadily adding tools. On Thursday, Facebook removed a requirement that the company approve creation of those groups.

The move is Facebook's latest advance into commerce. Last month, it said it was testing a way for businesses to sell items through their Facebook pages. In March, Facebook said it would allow users to track online orders through its Messenger app.

Brian Solis, an analyst at Altimeter Group, said Facebook is hoping users will spend more time and money on its sites.

More than half of U.S. Internet users visit Facebook daily, but fewer than 5% see social media as a starting point for shopping, according to a recent survey by R.W. Baird analysts.

"Why should you leave [Facebook] just go buy something?" said Mr. Solis.

For now, Facebook isn't generating revenue from For Sale Groups. It isn't charging either listing or transaction fees.

Facebook's push pits it against eBay and Craigslist, which have far more experience linking buyers and sellers. EBay says it has about 800 million items listed globally.

"EBay is one of the easiest, safest and most efficient ways to sell online. Our simplified selling process provides pricing guidance to help sellers get the most out of what they own," said Vincent Payen, eBay's head of consumer selling.

Facebook declined to say how many listings or transactions it has had. But it says clothing, cars, auto parts, books, crafts and sports equipment are some of its most popular categories.

Still, Facebook has roughly 10 times as many active users as eBay, which reported 157 million such users at the end of June.

This isn't Facebook's first foray into the secondhand market. In 2007, it rolled out a feature called Marketplace, which never took off, in part because it lacked a way to search by location and sellers wanted to reach an audience beyond their network of friends.

Facebook managers say the current initiative is different because its taps into the way its users behave. For example, after noticing that users were posting on groups and polling others about the reliability of sellers, it is creating a way for them to recommend a buyer or seller after a transaction.

Richard Jenkins, 42 years old, owns two comic-book stores around London called Raygun. He has been selling on eBay for about 15 years and says the e-commerce company accounts for 20% to 25% of his annual sales.

Mr. Jenkins began selling through Facebook groups for comic enthusiasts about three years ago.

So far, he said, the sales are "a drop in the ocean." But he thinks the effort helps his brand and "reflects well on my business."

The idea for For Sale Groups emerged after Facebook engineers on a research trip to Indonesia two years ago saw users tapping groups for commerce, said Bowen Pan, Facebook's product manager for commerce.

Earlier this year, the company introduced a "sell" feature that made it easier for users to list items within Facebook-approved For Sale Groups.

This week Facebook started allowing U.S. users to send payments to one another over its Messenger app, even if they weren't Facebook friends, said Deborah Liu, the company's head of platform. It is exploring how to let buyers and sellers trade messages more easily.

"We're really just thinking about how we connect this all together to make it easier to buy and sell," Ms. Liu said.

Facebook spun out Groups as its own app last November.

At Facebook's annual developer conference in March, Groups was projected on screen alongside Instagram and WhatsApp as Chief Executive Mark Zuckerberg outlined his suite of apps strategy.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

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