As the growth in eCommerce continues, many companies are expanding the ways they transact with customers online. Marketplaces continue to be in high demand, but should you compete against the likes of Amazon and Alibaba or simply join them?
Echidna is exploring what you should consider when it comes to deciding on whether to invest in a marketplace. This article will break down the growth of marketplaces, determining which type of marketplace is best suited for your company, and how you can ultimately go toe to toe with Amazon and Alibaba.
Marketplaces are defined simply as buying or selling in competitive conditions. This simple concept has exploded into a worldwide phenomenon that is not slowing down, from $2 trillion in marketplace sales reported in 2019 to $7 trillion in sales projected by 2024.
Three key trends have made marketplaces grow to what they are today:
50% of all sales were done through a marketplace in 2020.
Amazon and Alibaba provide a convenient way for businesses to join a quick marketplace opportunity. Payment options, product delivery, and acquisition are largely covered for you on these sites. But what are you giving up control of in order for this convenience? Your company will be losing control of the direct customer relationship and the customer data that goes along with it (buying, search, final sale, etc.). With a limited ability to define your audience, it will make it increasingly difficult to grow in the future.
Remember, who will you be missing isn’t relevant, but joining because your customer wants you to is the important thing. If your customer is shopping on these marketplaces you can join them in a way you can still build your brand. By developing a series of strategies to help cover and protect your brand is important when joining any marketplace that isn’t your own.
Marketplace strategies include:
Using marketplaces in your arsenal of selling options is key. So should you join one or building a digital marketplace on your own?
Consider the benefits of having a vertical marketplace:
This option also allows you to broaden your range to simply add competitors and other vendors to use your marketplace over somebody else's or creating their own.
Technology has evolved and gone are the days of overly complex, “not worth it”, marketplace implementations. There are a variety of strong marketplace solutions available now to help companies build their own.
4 simple questions will help to define your desired marketplace architecture.
If you are looking for guidance in marketplaces- whether how to add them into your strategy, narrowing down marketplace solutions, or creating a simplified user experience contact our team at Echidna to start a conversation.
HorecaHub is an innovative leader in selling, marketing, and distributing products to hotels, restaurants, and cafes; providing top-quality food and catering supplies to the foodservice industry.
Echidna partnered with HorecaHub to build their B2B eMarketplace solution that connects buyers to a variety of options. The user experience was key, making sure it was easy for buyers to find, filter, and put products in their shopping cart together as quickly as possible with a smooth checkout process. Technically, being able to communicate with their ERP system to immediately pull stock and also offering a responsive solution for users visiting from various devices was important. Now buyers can enjoy one order, one delivery, one invoice, and one payment- something this easy was not possible before the HorecaHub eMarketplace launched.
Tour the buyer-side of the HorecaHub eMarketplace:
Whether you join an actual marketplace like Alibaba or Amazon or create your own- they are here to stay. It is important to be there and have a strategy around them. Don’t think about marketplaces as a complex system to master, but by working with a technology specialist you can make another channel to continue growing your brand- whether you build one or join one. Consider the benefits of building one and the opportunity that comes with that.
Echidna is a leading digital commerce agency with capabilities including strategy, creative, marketing, systems integration, technology services, and managed services. Our team is experts in delivering end-to-end solutions with high complexity for B2B, B2C, D2C, and mixed business models to help leaders continue with their growth and innovation well into the future. We are committed to delivering top-notch quality on a predictable schedule and at an affordable rate that our clients recognize the real value in.