Supercharging your online business with marketplaces

Marketplaces and online commerce

Over $2 trillion has been spent on online marketplaces in 2019. 57% of total global online retail sales is now spent on marketplaces. Undoubtedly it is the next big trend in online commerce and its share in online commerce is only set to grow in the new world order during and post COVID-19.

So, what are marketplaces? How can they help you get more out of your online businesses? And how can you ensure that your business is geared to absorbing this new dimension in your online strategy?

1. What are online marketplaces?

Online marketplaces are websites or apps set up by an operator that provide a transactional platform for consumers to purchase a variety of products from independent sellers, who pay the operator a commission to use their platform. Marketplaces enable operators to quickly grow assortments, enable new business models and streamline internal operations. All while gathering rich customer data to better feed personalization engines and omni-channel strategies.

2. Marketplaces are emerging across sectors

While traditionally, businesses already selling direct to consumers (e.g. Retailers & CPG businesses) have also listed their products on mainstream marketplace platforms like Amazon, eBay, Zalando and others, they are also now creating enterprise grade marketplaces by integrating horizontally or vertically across the value chain. This trend has also emerged in consumer-facing industries such as the Financial Services sector, Telco as well as in businesses focussed on B2B trading. However, deciding to launch a marketplace is complex as it has implications not just on selecting an operator and how you are perceived by your customers but also your operating model, margin, profitability and technology.

3. Adopting marketplaces

Undoubtedly, technology is key. And there are a host of technology vendors that are available to support businesses joining existing marketplaces or those wanting to set one up. If you want to join an existing marketplace like an amazon for example, there are vendors that provide solutions to extend your products into other channels. They typically provide product feed generation and help with sales, pricing, performance reporting. On the other hand, enterprise grade marketplaces vendors provide ability to create and manage online marketplaces where multiple third-party sellers can list products and interact with buyers. You can use these vendors for onboarding, product catalogue services, order management etc.

4. Technology is not all

It is a complex decision to arrive at the marketplace strategy that works best for your customers and in turn for your business. And there are implications of marketplaces on other parts of the business, including but not limited to technology. A strategic view must be taken and with that an assessment of other business functions, to gear them to utilizing the benefits of marketplaces alongside careful consideration of the impact to company brand-positioning. We assess your online business and the fit of marketplaces, as well as its implications on functions such as supply chain, finance, customer service/experience. We bring our capabilities not just to setting up marketplaces but in ensuring we set you up for success by optimising your trading strategies online alongside mitigating key business risks.

5. Moving a step closer

You may be at different stages of the marketplace journey, from exploring if it is a viable opportunity for your business, to optimizing your already existing presence on marketplaces. And if you are wondering about next steps, a conversation with Deloitte can be an excellent starting point. We bring extensive capabilities and first-hand experiences from marketplace experts to define your vision for your online business and marketplaces.

Sounds complex? It is, but we at Deloitte have experts at hand to help you through this journey.