For years, tech critics whispered that online classifieds platforms were basically dead ends for real profit. They called them digital garage sales where people haggled over ten-dollar t-shirts while the platform burned through venture capital. Singapore homegrown unicorn Carousell just proved everyone wrong.
The company recently announced that it officially turned EBITDA positive for its fiscal year 2025. Revenue jumped 18% to hit $141 million, up from $119.3 million the year before. That is nearly triple what the company pulled in back in 2021.
If you are looking for the real secret behind this milestone, it is not just about cutting costs or laying off staff. The truth is much more interesting. Carousell completely re-engineered its core business model. It transitioned from a passive matching site into a high-tech recommerce machine, leaning heavily on artificial intelligence to build the trust that peer-to-peer marketplaces usually lack.
Shifting from Classifieds to Recommerce
Most people still think of Carousell as an app where you take a blurry photo of an old couch and pray someone picks it up. That old model is incredibly hard to monetize. You can only sell so many visibility bumps or banner ads before casual users get annoyed.
To fix this, Chief Executive Officer Siu Rui Quek shifted the strategy toward managed services. Instead of just letting buyers and sellers fight it out, Carousell stepped in as a trusted middleman. The company calls this recommerce, and it is absolutely printing money for them.
Recommerce revenue grew by a massive 40% year-on-year. It now accounts for 45% of the company total top-line revenue, making it the single biggest driver of growth.
The Brick and Mortar Twist
You would not expect an internet unicorn to build physical shops, but that is exactly what happened. By the end of 2025, Carousell setup 29 physical stores across Singapore, Hong Kong, Malaysia, and Indonesia.
These stores act as physical inspection points and trade-in centers for high-value items like luxury handbags, smartphones, and fashion. This move alone drove a 20% increase in Gross Merchandise Value across their premium categories. People want to touch a luxury watch or see a refurbished phone before parting with hundreds of dollars. By bridging the digital and physical worlds, Carousell eliminated the anxiety that keeps people from buying used goods.
How AI Stops the Scammers
Trust is everything when you are buying someone else used gear. If a platform is filled with fake accounts and counterfeit items, users leave. Carousell used to struggle with this, but their recent heavy investments in artificial intelligence changed the entire game.
The company deployed advanced machine learning models to police the marketplace. These AI systems analyze listings in real-time, scanning for weird behavior patterns, shady language, or suspicious photos. The tech catches bad actors before their listings even go live.
The results are pretty staggering. Carousell scam detection accuracy reached 98%. Today, an incredible 99.96% of transactions on the platform happen without any fraudulent incidents at all.
Three Second Listings
The AI does not just catch bad guys. It also removes the friction of selling. Carousell introduced AI-assisted listing tools that allow users to snap a photo and generate a complete listing in under three seconds. The system auto-identifies the product, fills in the category, and suggests an optimal price based on historical marketplace data. This keeps the supply pipeline full and keeps users engaged.
What Other Startups Can Learn
The broader lesson here is about execution over hype. Many tech firms panic when funding dries up, scrambling for a quick public listing or chasing the next trendy tech buzzword.
Carousell took a different path. They stayed quiet, ignored the pressure to constantly expand into new countries, and focused on extracting more value from their seven core markets. They integrated smart acquisitions like Laku6 for mobile electronics and Refash for secondhand fashion to build a tight ecosystem.
Your Next Steps to Capitalize on the Recommerce Trend
If you run a retail business or an e-commerce brand, you cannot ignore this shift toward secondhand shopping. Consumers are squeezed by inflation and increasingly care about sustainability. Here is how you can adapt right now.
- Audit your returns: Stop liquidating returned items for pennies. Look into building an official refurbished or open-box section on your site.
- Focus on verification: If you deal in high-value goods, invest in authentication. Buyers will gladly pay a premium if you guarantee an item is real.
- Simplify the user input: Use basic image recognition APIs to help your users categorize and list items faster. Less typing means higher conversion rates.
