The Future Of Online Marketplaces
Businesses looking to venture into new markets often find that the easiest and quickest way to do so is to join an existing online marketplace.
Borrowing the credibility of a known marketplace is a good way to introduce your brand to a new audience. And online marketplaces are on the up: nearly 40% of ecommerce shoppers turn to Amazon first when looking for a product. Shoppers are increasingly less likely to use search engines for shopping, favouring online marketplaces instead. But online marketplaces are not without their perils.
Top-selling categories are highly competitive places and your product is often very easy to compare against your competitor’s.
There’s often skullduggery from rival sellers who may try to write negative reviews of your product and service. And because online marketplaces often have high standards for delivery time, it can be demanding to sell through them.
Buyers on the Not On The High Street marketplace are notoriously demanding, with some sellers on the platform reporting 10% of their sales being returned. This site also offers options for very fast delivery, which can be a challenge for smaller operators.
There’s also the danger that your entire business could be wiped out if you fall out of favour with your platform of choice. That’s happened to many Amazon sellers who find their accounts shut down after a few complaints from sellers, whether justified or not. It’s not easy to appeal against Amazon’s decisions and reclaim your presence on the site. Even those vendors making a success in online marketplaces generally caution against relying too heavily on a single platform.
Many of the household name marketplaces, such as Amazon, Tmall, and eBay, are targeted at consumers. From a B2B perspective however there are many global marketplaces that are less well known but may have much to offer brands seeking new markets overseas.
The best known of these are sites such as the Chinese juggernaut Alibaba. China offers other B2B marketplaces such as DHGate and MadeinChina.com. Asia also offers other huge global B2B marketplaces such as EC21, a Korean platform which offers brands the option to create their own homepage to showcase their products. EC21 offers a variety of language interfaces, including Russian and Korean. As a consequence, it may be a relatively straightforward way to enter a market such as Russia if you’re a B2B enterprise.
India offers several major B2B online marketplaces of which the largest is perhaps IndiaMart. If you’re targeting small or medium sized business clients, then Trade India is also a good Indian marketplace to list on. These both attract huge numbers of visitors daily.
India’s native B2B marketplaces dwarf America’s biggest platforms in terms of visitor numbers.
ThomasNet.com, the US platform for buyer/seller encounters, receives the same traffic in a month that IndiaMart sees in a single day. It’s more of a seller directory than anything else and doesn’t offer the same ‘request a quote’ feature that has contributed to Alibaba’s success.
If you’re approaching these B2B platforms from your experiences shopping in consumer marketplaces, then you may find them a little hard to understand initially. It’s always worthwhile trying out a new marketplace from a buyer’s perspective before you try and go in as a seller to determine how users will find your products and develop strategies to ensure maximum exposure.
Listing on an international marketplace is a great way to dip a toe in the water of an international market. There are multiple ways to approach this.
On a global marketplace such as eBay or Amazon, you have the option to offer international shipping on a product you list on your local version of the marketplace. This can add to your sales volume with very little effort.
If your marketplace offers other versions of its site internationally it may be worth setting up separate stores and listings separately on each site.
This separates your activity in that marketplace from your domestic activities, which protects your main account and its feedback ratings in case you don’t fare as well in the new market.
The future of online marketplaces
Online marketplaces are no longer restricted to physical products sold via retail marketplaces such as Rakuten and eBay. Service marketplaces, such as Uber and Airbnb, are becoming increasingly disruptive in their own spaces and it’s likely we’ll see new ones emerge as consumers begin to get more comfortable with this concept.
Marketplaces are starting to emerge for a wide range of services, such as hireable chefs to cook you a meal at home, grocery delivery from small independent shops, and domestic services such as pet sitters and groomers via Taskrabbit.
On the B2B front, professional services are already available via sites such as Elance, Peopleperhour, Crew, and Fiverr, which enable businesses to hire freelancers such as graphic designers or web developers for specific tasks.
In the future it’s also likely that marketplace buying will become more complex. Retail marketplaces have so far offered a fairly simple buying process. But in the future, as consumers are increasingly accustomed to online shopping, the complexity of online purchasing may increase as shoppers get more savvy.
Group buying, where shoppers collaborate to obtain discounted goods by all approaching the seller at once with a large group order, is starting to emerge.
There are also unfulfilled opportunities for more complex transactions to take place in the online space. At present marketplaces are particularly good at sourcing commodities, but there are opportunities for higher ticker value purchases, tailored products, and ones that require a higher level of involvement before purchase.
Tasks such as hiring a wedding photographers, buying a house or renting business premises could all be done online, however not all marketplaces are yet sophisticated enough to enable them. Marketplaces need to find ways to accommodate unique, personalised transactions and also to offer buyer protection when making larger or more complex purchases.
It seems that the trend for much of the web’s eCommerce to take place via these market platforms is set to continue. It’s worth keeping abreast of the many opportunities offered in marketplaces as this can be a viable route to expand your business.
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