Monday, July 15, 2024
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Retail Marketplaces

Expanding Horizons

While not a new concept, online retail marketplaces continue to increase in popularity after recent global events and it remains more affordable to start an e-commerce business than a physical one. Over the next few pages, RLI delves into this world to learn more about why it is now so commonplace, what it is that attracts retailers and highlights some of the major players in the sector.

Retail Marketplaces 1

According to Insider Intelligence, the global e-commerce market will reach $6.3 trillion in 2023 and continue growing over the next few years. The numbers online prove online shopping has become an increasingly lucrative option for businesses across all sectors.

In Jake Pool’s article ‘The World’s Top Online Marketplaces 2023’ on the Webretailer website, he explains that by 2025, it is estimated that online shopping around the world could exceed $7.5 trillion and that it will account for almost one quarter (23.6 per cent) of all consumer spending on the planet.

The article entitled ’13 new online marketplaces you should be selling on’ from explains that marketplaces continue to grow as e-commerce increasingly becomes the de facto method of shopping. With a smartphone in almost every modern consumer’s pocket, online shopping is now conducted anytime and from anywhere. Whatever a customer needs or wants in the moment is available through a plethora of online marketplaces poised to meet consumer needs.

The piece continues by saying that the online marketplace space continues to expand and surge to reach consumers in new demographics. Not only are several high-profile marketplaces household names, but there are also many new players gaining traction around the world.

The health crisis the world has experienced in the last few years has deeply impacted consumer habits. With brick-and-mortar shops continuing to close even today because of ongoing problems caused by lockdowns, e-commerce has emerged as a beacon of hope and stability in a troubled economic landscape.

The online article ‘Why e-retailers are embracing the marketplace model’ on the Mangopay website highlights that recent times have resulted in companies being forced to accelerate their digital transformation by at least three years in order to survive. However, having an online presence is no longer enough: half of all e-commerce sales were conducted on third-party platforms even back in 2020, making marketplaces the real winners of this shift in online purchasing behaviours in recent times.

The article goes onto say that traditional e-commerce is at a crossroads, with retailers and e-retailers in particular rethinking their strategies to contend with global marketplaces and continue meeting the needs of their customers. To drive growth, adopting the right marketplace strategy means unlocking powerful one-stop shop experiences for guests.

In the marketplace model, the client is the seller. A marketplace’s focus will therefore be on onboarding vendors with quantitative and qualitative offers to attract and retain customers. As its role is that of an intermediary, the marketplace will take a commission on the sales generated by the vendors it hosts, but not own or have to manage stocks or logistics.
Now that we have an understanding of the concept, let’s take a look at some of the major players in the world of retail marketplaces…

6thStreet is an elevated fashion and lifestyle marketplace committed to delivering on-trend shoes, bags, outfits, beauty and accessories right to people’s doorsteps in the UAE, KSA, Kuwait, Oman, Qatar and Bahrain. The company also made headlines last year as they opened the GCC region’s first phygital store dedicated to fashion; an innovative tech-led space where online shopping converges with a physical store. Located in Dubai Hills Mall, the store is the future of retail, offering customers an integrated omni-channel experience with the benefits of both online and in-store shopping. It is owned by Apparel Group, the Dubai-headquartered global fashion and lifestyle retail conglomerate.

An online retail service based in China, AliExpress is owned by the Alibaba Group. Launched in 2010, it is made up of small businesses in China and other locations, such as Singapore, that offer products to international online buyers. According to the latest data, Alibaba Group is the world’s largest e-commerce marketplace retailer based on sales worldwide. Approximately $780bn US dollars would be generated by the platform’s online sales in 2022. AliExpress, the company’s top online marketplace for e-commerce brands and sellers provides an opportunity for businesses to reach new customers and sell their products globally.

The largest and most well-known marketplace is of course Amazon. The marketplace behemoth is in fact so big it has begun branching out to have its own physical locations, with its latest unit launching on Liverpool Street in London, UK. Amazon Fresh stores offer a wide selection of products, including Amazon’s private food brand ‘by Amazon’ and its premium grocery range, ‘Our Selection’, which offers hundreds of delicious items. With more than 300 million active users, Amazon is a professional selling platform with features such as order management, shipping and payments. Websites like Amazon have revolutionised the world of online sales platforms. Amazon is a go-to marketplace website for many shoppers: an estimated 44 per cent of Amazon shoppers say they always check prices on Amazon before making a purchase on another site. It is among the top 15 most visited websites in the world!

While maybe not a well-known one, Ankorstore is a European success story when it comes to marketplaces and in just three years has expanded to be present in 33 countries across Europe. Ankorstore was founded by entrepreneurs for entrepreneurs and is a partner to more than 300,000 retailers, florists, coffee shops and other concept stores across Europe – seeking authentic products and brands that e-commerce giants such as Amazon do not offer. The Ankorstore marketplace offers a product catalogue of over 30,000 European brands to retailers who want to offer their customers a differentiated shopping experience and new products.

Not far behind Amazon is eBay, whose global platform allows sellers to reach a much wider customer base. With so many users, eBay has become a highly-recognised brand in the industry and one of the most recognised names on the internet. The platform serves over 180 million worldwide buyers and operates in 190 markets around the world. Their technology empowers their customers, providing everyone the opportunity to grow and thrive — no matter who they are or where they are in the world. The ripple effect of their work creates waves of change for their customers, their company, their communities and the planet. eBay creates inspiring ecommerce experiences for its buyers, sellers and developers. Embracing innovation has been a cornerstone of their growth and customer loyalty for more than 25 years – encompassing technologies such as AI, computer vision, natural language processing and machine translation.

Etsy is a global marketplace where buyers can find special, creative and unusual items. It is an American marketplace that started out selling handmade items from individual makers and craftspeople. The platform is where small businesses and crafters can sell their original items. The only newly manufactured items allowed to be sold on Etsy are craft supplies, tools and party supplies. With almost 94 million active buyers, the app provides you with a large customer base to sell to—but it also comes with some challenges. Since there are no advertisements on Etsy, you must build your brand through positive word-of-mouth referrals and reviews from your satisfied customers. Etsy has over 86.53 million active users and is available in 36 countries, including the US, Australia, Singapore and across Europe. If you are trying to get your products in front of an engaged and active niche community and audience, Etsy is a smart choice.

As the leading destination for online shopping in the UAE, noon has everything anyone could need in one marketplace. Whether you’re shopping for the latest electronic products, fashion, homeware, products for kids and babies, books and stationery, sports and health essentials, beauty products, or groceries, they have millions of products in the noon UAE store. noon is an easy and secure platform for people to discover and shop the products they love. With fast delivery, easy payment and return options and a 24-hour customer service, find everything you need at competitive prices. All of our products are backed by our authenticity promise and noon warranty. The first e-commerce platform to use Arabic as the native language for its user interface, is setting a new design standard for online shopping in the region.

Japan-based Rakuten is the third-largest eCommerce marketplace globally. Globally, Rakuten’s 70+ businesses span e-commerce, digital content, communications and FinTech. Business owners are able to sell their products globally without worrying about regional restrictions. You can choose from a wide variety of categories on Rakuten, whether its accessories or home appliances. Customers-friendly features include payment processing, shipping and product listings on the marketplace. Sometimes colloquially referred to as the “Amazon of Japan”, Rakuten is one of Japan’s most recognisable brands – it even has its own baseball team, the Rakuten Eagles! Launched in 1997, Rakuten Ichiba (the official marketplace name of the Rakuten parent company) currently has 49,000 merchants on its platform and serves 115 million customers.

Founded in Boston, Massachusetts just last year, Temu (which means TEAM UP, PRICE DOWN) is an online marketplace that connects consumers with millions of sellers, manufacturers and brands around the world with the mission to empower them to live their best lives. Temu is committed to offering the most affordable quality products to enable consumers and sellers to fulfill their dreams in an inclusive environment. It offers heavily discounted goods which are mostly shipped to consumers directly from China. Temu is owned and operated by the Chinese-based and Cayman Islands registered company PDD Holdings, which also owns Pinduoduo, a popular online commerce platform in China. The platform allows China-based vendors to sell and ship directly to customers without having to rely on intermediate distributors in the destination country, thus increasing affordability for any buyers.