A real-time shopping community

Mercari is a shopping app that encompasses the largest community of buyers and sellers, allowing easy e-commerce to happen anywhere at any time. This Japan-based marketplace enables real-time mobile commerce for anyone who wants to buy or sell anything. The platform connects with an easy shipping label creator for sellers, and is cross-category in its ability to empower business across many verticals. With over 10 million installs of the app in the U.S. alone, Mercari is a peer-to-peer marketplace that straddles 3 countries: Japan, the United States, and the United Kingdom.


Growing across the world

As an agile startup working across geographies and oceans, Mercari is committed to an excellent customer experience while maintaining a sustainable business. Their U.S. efforts encountered many new challenges that the Japan venture had not previously seen. From promotional or referral fraud – with fake invitations to new users taking advantage of Mercari credit – to payment fraud and spam listings, Mercari found that the U.S. marketplace industry was open to various types of bad and costly behavior. In order to maintain the integrity of their marketplace, Mercari required considerable manual review hours to vet accounts and products, enlisting a lean team across San Francisco, Portland, and Japan.

Puneet Shah joined Mercari as a Senior Product Manager tasked with creating a seamless experience for customers while reducing the impact of these fraudulent users. With less than 3% of the overall company dedicated to fraud, Puneet and his team needed a scalable solution that could keep up with their growing customer base while predicting behavioral trends that they hadn’t had to deal with before.

Puneet Shah
“The rules-based systems couldn’t keep up with Mercari’s volume, and needed constant updating. We needed something better.”


Machine learning for smarter decisions

With their entry into the U.S. market – and the subsequent growth in malicious sign-ups – Mercari initially turned to more old-fashioned, rules-based solutions. Unfortunately, these outdated technologies couldn’t scale with Mercari’s astronomic growth, and the stagnant rules required constant updating, flagged too many false positives, and negatively impacted their chargeback rate. Puneet and his team decided that they needed a solution that could learn in real time and predict fraud, without relying on in-house fraud experts to write and maintain rules. Because Mercari’s fraud issue was wholly new and the marketplace industry presents challenges where the business takes on various roles and risks, the defaults suggested by other vendors didn’t align with Mercari’s unique needs.

Because the team at Mercari wasn’t familiar with machine learning, a new tool required buy in, an extensive trial, and thoughtful analytics before its findings could be confidently acted upon. When Puneet decided to fully integrate and trial the Sift system, he decided not to backfill the machine learning model with historical data and instead let the algorithms learn on live data before assessing accuracy. The Mercari team found Sift’s API documentation to be clean and organized – especially when compared with other vendors – and the engineers had the solution integrated within a matter of days. Puneet planned on giving the models one month to crunch the data and begin adjusting to Mercari’s needs. Throughout the learning phase, Puneet was committed to sending good quality data via the API and JavaScript snippet, to ensure that the learnings would be as actionable as possible.

Puneet Shah
“When I want to dive deeper or review with leadership, built in reporting helps me measure exactly how Sift is helping grow our business, reduce fraud, and keep our marketplace safe.”


Scoring high with machine learning

Very quickly, Puneet’s team saw highly accurate learnings and analysts were reviewing cases in the Sift Console. Two weeks into integration, Mercari began using the Queues feature; Sift was turning out such accurate scores that Puneet’s team was able to confidently auto-ban high risk orders within one month of integration.

The efficacy of Sift has helped Mercari’s team of analysts to become fraud fighting experts. Within three months of using Sift, Mercari’s chargeback and fraud rates dropped by 60%.

When it comes to measuring the ongoing success of their fraud program, Mercari has come to trust Sift Insights. Instead of downloading data and fumbling with complicated spreadsheets, fraud team supervisor Pascual Artero looks to Sift Insights for real-time visibility into the impact of fraud on the business. Insights has significantly reduced the time he spends compiling reports. And armed with actionable Sift dashboards and reports, Pascual has been able to optimize operations and make better day-to-day decisions.

Sift has enabled Mercari to focus its energies on growth and the optimal experience for its customers. With Sift, Mercari has a solution in place that scales with their business, ensuring a sustainable and trustworthy marketplace for buyers and sellers alike.

Puneet Shah
“Sift has really thought through the marketplace aspect and understands that we work with multiple relationships. Getting started with a dedicated marketplace integration guide gave us a sense of confidence.”