For the past decade, the Internet has given rise to new forms of trade. Companies like Uber and Airbnb are transforming the transport and travel industries, while digital currency Bitcoin is making a long-term play at disrupting the banking system. But it’s not all about innovation: the web has also enabled the return of one of the oldest forms of exchange—bartering.
Sharing sites are ubiquitous (people nowadays can easily swap holiday homes, office supplies, books and skills), but specifically in places where formal economies have broken down, barter economies emerge.
Venezuela is one such place. 70 percent of food is imported, but the price of its export commodity—oil, which it produces cost-inefficiently because it hasn’t allowed foreign investment—has collapsed.
In an attempt to head off the runaway inflation that this state of affairs would normally produce, the government has regulated the prices of basic foodstuffs by mandate, meaning in turn that their availability has tanked. Even daily staples such as milk, coffee and flour have become luxuries. Supermarket shelves are empty, and people have to either endure very long hours in line to buy whatever’s left or go through the bachaqueros—people who do the lines and then resell their purchases for 20 times the ticket price.
The web has stepped in. Social-media sites have become the place to trade goods and donate items. There are several Instagram accounts that allow parents to swap formula for diapers, youngsters to exchange condoms for alcohol, and women to trade birth-control pills for sanitary pads. Every day, the Twitter account @spvzla (Public Service Venezuela), receives thousands of tweets from people who are in desperate need of medication.
Greece is another case where economic woes have brought back age-old economic behaviours. Due to the debt crisis, people don’t have the means to access goods, so they rely on swapping what they have to get what they need. According to The New York Times, artists are exchanging their designs for olive oil, while butchers exchange meat for tyres.
One of the most prominent bartering platforms in Greece is TradeNow, now boasting over 30,000 members. Here, users trade anything from office supplies and real estate to services such as babysitting and plumbing. Although members can purchase ‘Trade Points’ (1 euro per point) to compensate for any difference in value during the exchange, no universally tradeable currency is involved in these transactions.
Although bartering has traditionally flourished in specific places during times of economic collapse (another example is Germany, which functioned largely on barter in the immediate aftermath of World War II), it may be that it has a far wider role.
In the same way that Uber and Airbnb have led to the formalisation of the sharing economy, it’s perfectly conceivable that bartering sites, with simple, intuitive interfaces delivering great usage experiences might take this form of trade into the mainstream.
Big brands and social media to the rescue?
While startups present one avenue through which bartering might one day find its way into the mainstream, it’s worth speculating on how established, recognised companies with powerful brands might also have a role to play.
Perhaps there is a role for social-media platforms to design seamless experiences that help people turn their networks into true sources of support. While in Venezuela or Greece this might mean people trading contraceptives for baby formula, in the US or other places in Europe and Asia it might translate into people easily exchanging books, toys or electronics within their current networks.
What’s the role for brands here? Some big-name brands are beginning to facilitate trade and exchange. Amazon is enabling these kinds of exchanges through its TradeIn platform, which lets people swap expensive items such as computers, electronics and other tech devices for Amazon gift cards. And California-based TradeYa—is a website that allows members to exchange high-end items (such as swapping a Louis Vuitton bag for a Nikon DSLR).
Perhaps other brands could get in on the act, raising their profiles and deepening their association with the category (never a bad thing for an online strategy!) whilst facilitating exchange.
As the sharing economy becomes more and more predominant and swapping transactions become easier, one can imagine a rise in bartering in the developed world, not only so people can find what they need, but also what they want. And with that, the global economy will be disrupted, once again.
Veronica Marquez is senior research executive with Flamingo New York