The Marketplace Phenomenon: Accelerating sales worldwide
London, June 2019
Multi brand e-commerce websites, now have a new competitor, the ‘Marketplace’. The marketplace model gives retailers a chance to sell on multi-brand e-commerce websites, making their products visible where customers are searching for them.
The big difference of the emerging 'marketplace' model takes a leaf out of the drop-shipping model that gained popularity in 2010, where a brand lists its products on a multi brand e-commerce website. On a sale, the brand self ships the order from their own warehouse, rather than stocking it with the marketplace provider.
In times of Retail apocalypse, disposable incomes shrinking, retail giants shutting stores worldwide and fashion sales going out of fashion, keeping a brand in the run for business can be taxing. But with prompt seller applications, self listing, and vitally, allowing the brand to self fulfill their orders, the marketplace trend has been soaring.
Written in a report by Mckinsey, in collaboration with Business Of Fashion, Amazon, with an estimated total share of more than 8 percent, is on course to become the leading apparel retailer in the United States. Flipkart has a 40 percent share of online fashion and lifestyle sales in India.”
This year, 19 percent of Amazon professional merchants brought in more than $1 million in sales, according to a new survey by Feedvisor, an algorithmic pricing and revenue intelligence platform for online retailers. The marketplace model has hence proven to be a business accelerator providing unbeatable delivery propositions, legions of choices, and efficient use of data.
On the reverse side, multi-brand e- commerce giants have permuted to the marketplace model, allowing brands to self fulfil orders. The Top 5 e-commerce sites in every country are multibrand marketplaces. This has made the process apace and transparent for the retailer, the marketplace and it’s consumers. Reports suggest that more than 50% of retailers rely on marketplaces for sales even after having their own physical or online stores.
Fig.1. Revenues of leading Marketplaces
Multi-brand eCommerce websites like The Iconic in Australia, Zalora in Southeast Asia, Zalando in the UK have acquired the marketplace model in the past few years. With upcoming game changers like Trouva, Zilingo, Reebonz, Retail Week analysts predict that marketplaces will account for 40% of the global online retail market by 2020.
What then is the hitch? Is the Marketplace model a compeer for your business, what do you need to be on a marketplace? How does the process commence?
Wait for our next article to know the answers to all these questions and know a little more about the Marketplace Marvel.
The Author works on Marketplace partnerships and Marketing at WhereWolf
WhereWolf helps brands connect to 20+ marketplaces, over 50+ countries with 98 million active shoppers.