Evolution of Online Marketplace platforms and its future
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What do you do if you need something you don’t have? Obviously, you will go to a nearby market. But what if you don’t find it in the local market? This is where online marketplaces come into play. eCommerce marketplace platforms ensure that anything can be bought by anyone from anywhere in the world. It does make a good case for itself theoretically, doesn’t it?
From 1995 to 2020, evolution of online marketplace platforms have been growing from their failures.
Source – Digital Commerce 360
Online marketplaces have a twisted tale full of ups and downs. They have been around for the last 20 years. But it is now getting hype more than ever before. Why did eCommerce marketplaces take so many years to become an exciting business proponent?
To know this, first, we need to understand the concept and evolution of online marketplaces.
Evolution of Online Marketplace Platforms
Source – Business2Community
Ever since there’s been anything to sell, there’s been a marketplace. It is a place where a multitude of sellers can sell their respective products catering to a crowd. For buyers, it is the perfect place to compare several products from every category and make their choices based on their respective priorities such as needs, wants and prices.
Online marketplaces are an amalgam of everything human life revolves around. In a fast-growing era of technology, it should not be a surprise if online marketplaces become the most prominent junction for sellers to find buyers and or vice versa.
One thing which gives an edge to online marketplaces is its ability to compile a wide range of products from vivid categories. It is just the medium of interaction in that sense but it has the power and responsibility to keep the market system alive.
Did You Know
In the US, about 55% of the online product searches done by consumers start from Amazon. Amazon alone makes 37% of the entire online shopping done in the US.
Source – Buzzfeed
These statistics should open the eyes of those who are still sleeping by the tide of online marketplaces. Marketplaces are playing an important role in society for thousands of years. But it is hard to deny the ever more dominant role eCommerce marketplaces are gaining within the span of two decades.
eCommerce marketplaces are seemingly creating more grandeur opportunities for small and medium businesses. This is already resulting in an inevitable tectonic shift in consumer behaviour.
Diverse approaches to Online Marketplaces
When it comes to the approach, marketplaces were always experimenting to find their own distinct charm. It is all about finding a sweet spot with the consumers. This is also vital to configure their own unique attribute different from other marketplace platforms.
Essentials online marketplaces
From the first marketplace platform to the evolution of online marketplaces, it has always included routine essentials. With times products of such platforms were increasing to varieties in form of online grocery delivery marketplace, household utilities, hygiene supplies and other accessories. Such marketplaces are just revolving around fulfilling the necessities of human life.
That gives the ease of shopping all the essential at one go, compare a variety of products from different brands and convenient home delivery. Nothing can beat the luxurious shopping experience provided by eCommerce marketplace platforms.
This concept comes back from the print newspaper were classified ads used to feature properties that are open for sale. Online marketplaces too adopted a similar localized concept but on a wider scale.
There is one difference though which is in the structural base of the two. It was anything from land, real estate, commercial buildings, industrial machinery, heavy vehicles or availability of residential spaces for lease or purchase.
Service Bookings marketplaces
eCommerce marketplaces have evolved with the rise of internet connectivity. And it is exploding a whole new range of options. You can book tickets for hotels, flights, movies, music concerts, stand-up shows or even plan an entire travel itinerary specifically from a range of available packages.
Read more – Top 3 mistakes online sellers do!
This also opened the gates of online booking marketplaces wherein individual service providers, skill workers or company could thrive as a business. It gives any skilled man a massive public outreach to grow as a business, an opportunity to explore the sky.
Mega marketplace platforms
There are a few mega marketplaces which sell almost everything under the sun that people need in their lives. eCommerce Marketplaces like Amazon or Alibaba are among the biggest brands in the entire world. They share a massive chunk of eCommerce sales among themselves. Such online marketplaces are perfect examples of how big eCommerce marketplace can get. In fact, mega marketplaces are the reason which made eCommerce marketplaces a sensational idea.
Did you know
Amazon, eBay and Alibaba, three businesses accounted for about $365 billion in sales worldwide in 2016. That’s 31% of the global eCommerce sales.
Source – EuroMonitor
On a certain level, these mega marketplaces turned brands are responsible for a number of innovative technologies. Businesses which were shying away from trying are now also keen to go online. Even existing retail shopping chains are undeniably surprised by these mega brands and are now shifting their business model.
The coolest aspect of these mega marketplaces is that they open a whole universe of consumers searching for your product. to even remote individual sellers. Any seller along those marketplace platforms can grow with these growing opportunities in front of them.
Niche classified marketplaces
Unlike mega marketplaces, niche classified marketplace platforms are pretty reserved and restrict themselves to a much smaller but very articulate audience. Classified marketplaces keep the business transactions restricted to a niche category of products like fashion, luxury fashion, herbal products, medicines, books, outdoor accessories, mobile accessories etc.
Such online marketplaces offer a more vivid range of brands from a specific category of products. This gives users the luxury to choose from a diverse variety for picking and choosing their favourite products.
Classified marketplace platforms are expected to compile an extraordinary variety and a never-ending range of product choices for the consumers. Therefore, niche online marketplace often curate product lines based on distinct tastes for both men and women. It works really well, especially in catching the attraction of passionate buyers.
Curated lists also add more ecstasy for the buyer as he gets more products of his liking served in an instant. For instance, online liquor and wine marketplace and personal or health care marketplaces have been one of the very profitable marketplace platforms during the lockdown. Myntra is a popular eCommerce marketplace for fashion products and accessories which is selling the highest quantity of fashion products in India.
Advancements of eCommerce marketplaces
Online markets are becoming more complex each day. But no matter how things have changed, eCommerce marketplaces still provide customers with one easy, convenient destination to compare a wide choice of offerings from a variety of sellers.
Unifying business opportunities
One of the best aspects of online marketplaces is that you can sell your product from your home to a person sitting on the opposite part of the globe easily. This is actually unifying business potential and revoking opportunities with equal and healthy competition for all.
This way buyers get to find an astounding collection of products making it easier for them to find what they want without any additional effort. No matter if a product is only available in a land far away from the buyer, still the buyer can buy it without any issues.
Destroying physical barriers
The borders are imaginary lines but they have been a big problem for business communities for a long time. Online marketplaces took on this barrier and destroyed it emphatically. This releases huge restrictions for businesses which is potentially a threshold of growth.
Now as we see the eCommerce marketplaces getting bigger and better, they are encompassing every fortitude and restrictions those boundaries impose.
Covering market dynamics
Online marketplace platforms are bringing together the variable aspects of sales. This is actually covering a deeper part of history. Many new marketplaces are taking shape out of like-minded sellers, brands and products coming together on mutually beneficial terms.
This way, a group of established small businesses come together and leverage their existing consumer base and get to sell their products to a much larger audience.
Exploring new revenue streams
eCommerce marketplace platforms give a lot of bona fide advantages to the businesses. There are great flexibility and scalability to create new streams of revenues. These revenue channels only add more weight to the existing revenue models. This gives opportunities for generating recurring revenues through various means without slipping in the wrong zone in front of their buyers.
When we talk about exploring new revenue streams, this essentially obligates any limit which is otherwise pulling business to a few unexpected risks in a very competitive business environment. To name a few of these revenue streams, we can take examples of commission-based sales, paid memberships, subscription service and many other things. Amazon is a classic example of all the mentioned revenue streams as it draws profit from extensive resources nurtured with time.
Developing a healthy ecosystem
If an online marketplace can become more than just an eCommerce platform, it creates a genuine connection with customers. This develops a sense of belongingness and relativity among sellers and buyers, no matter if the seller is even a big brand in its own right.
Businesses in such a way feel plugged into a community or a tribe, through membership benefits, tailored content to help them access product services. There is a very high chance that a buyer can make a well-informed decision based on merits. This is very vital to create a sense of belongingness.
Interesting read – Multi-channel Selling: Experience eCommerce At It’s Full Potential
Foreseeing future trends
eCommerce marketplaces generate substantial traffic and this helps them procure great insights on the customers’ buying behaviour. Understandably, this enhances the ability of a business to grow more powerful insights on trends.
The buying habits of consumers are a big sign for any market to examine where it is heading. It is much easier to predict future trends and populist notion in buyers of contemporary time. Such elaborate data prove a key to the planning and operation of successful businesses.
How are marketplace platforms different from single seller stores?
Many marketplace platforms exhibit similarities inherited from eCommerce stores. But one key determining factor which separates the two is their way of selling. eCommerce marketplaces bring forth a diverse range of sellers from distinct regions to sell their products online.
In eCommerce web stores, the sellers are basically running a store or chain if any better. But it is their own shopping store in the form of a website.
Every webs store can convert into an online marketplace platform for growth but it needs some elementary changes in business platforms. One needs to prepare a more agile and long strategic approach for such eCommerce marketplace transitions.
Sadly, it is not as easy as it appears at first. Once an eCommerce platform comes into the fold of a typical online marketplace, it will need good support by some well-organized sellers. use pricing mechanisms or can cope with tens of thousands of products in their inventories.
Marketplace platforms are not just about online websites or apps. It is a bit different business model that can hugely impact your organization and expand your value to a much wider consumer base.
Future of Online Marketplaces – Start of a new era
Online marketplaces are growing fast and this is likely to continue because :
- More people are flocking online marketplace platforms as the internet is accessible everywhere.
- Sellers can sell their products beyond borders and boundaries.
- It is creating a healthy competitive environment for small businesses to challenge brands.
- Marketplace ecosystem adds immense versatility to products making it convenient for consumers.
- The trust deficit is narrowing down between online marketplaces and consumers.
- It saves a lot of time and money for buyers which pulls them over again and again.
Online marketplaces are changing the world. To go by the eCommerce trends in 2020, marketplaces will run riot throughout different industries in near future. It allows an equal opportunity to all, unlike street markets. This makes businesses more open to success wherein it gets to compete for the neck to neck with leading online brands. So either creating or joining an online marketplace is a really good option for any aspiring entrepreneurs these days.
Online Marketplace solutions are going to be one of the most effective ways of growing businesses, especially on established multivendor eCommerce platforms like Magento. In other words, a business can no longer ignore eCommerce marketplace platform and their influence if they want to grow after a certain point. Online marketplaces are here and they are here to dominate. It is eventually claiming the important role the early marketplaces promised but could not deliver.
Our Marketplace Basic Solution is now available on Magento Marketplace.
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