According to the statistics eСommerce popularity has sharply increased by approximately 46% during the last two years.
This considerable growth coincides with introducing COVID isolation measures throughout the world. The interest in the online business is still growing. Among all the types of online platforms, there is a high demand for a marketplace in eCommerce.
Commerce marketplace or online eCommerce marketplace is a type of a web page, where vendors can display products and customers can find required ones.
The biggest and the most famous example of a products marketplace is definitely Amazon but there some others:
- Mercado Libre
- Rakuten Japan
This article deals with the marketplace meaning in eCommerce and business in general. It explains a basis related to the types of eCommerce and advantages of managing online business.This article will be beneficial for start-ups and established entrepreneurs, who still doubt switching to the online format. There is a plethora of hidden crucial possibilities that can be used to boost your business.
Types of eCommerce Marketplaces
Only when a commerce platform corresponds to the business model, can it serve for the proposed purposes. One of the main steps is to choose the right type of it.There are three primary classifications of marketplaces by the type of the business object, by the products they sell and contributors and by the target audience.
By the type of the business object:
- Marketplace for physical goods. It might be one of the most wide-spread kinds, all marketplace examples from the previous classifications are among this kind.
- Marketplace for virtual goods. The most famous examples of this kind are App Store and Google Play. They focused on applications and other virtual products.
- Marketplace for booking services. With such marketplaces people can book tickets, hotels, cars, and etc. For instance, Airbnb and Booking.com.
- Marketplace for other services. There is a wide range of services: freelance platforms such as freelance.com, home services like homeadvisor.com or taskrabbit.com.
By the products they sell and contributors:
- Vertical—a marketplace has a number of vendors who sell products of one type. For instance, Protoporia.gr is a book retailer, they have only books in their stores and a lot of contributors represented by publishing houses and shop’s clients since people have an opportunity to return a book after reading and get a discount.
- Horizontal—there are several vendors as well with different products which are united by one distinctive feature. For example, Nguyenkim.com is the largest electronics online supermarket in Vietnam. Their product is various electronic devices. They have about 50 partners of popular brands.
- Global—it is a platform where all types of products can be found and an unlimited number of vendors can join the community. ShopClues.com can perfectly illustrate this type. It is an equivalent of Amazon in India. They offer products from clothes to electronics.
- Business-to-business (B2B) means that a business, in particular a marketplace, offers products and services to other businesses. The scheme is oriented towards gaining several reliable partners and maintaining long-term relationships with them. Representers of this type are not pursuing an aim to find as many customers as possible. For example, ShakeDeal.com helps to connect source industries and supply chains.
ShakeDeal e marketplace platform
- Business-to-customer (B2C) model takes place when a business works directly with customers. This sphere is represented by the market giants such as Amazon, eBay, Aliexpress, and etc. As for the smaller market examples, Drone.net.tr is a Turkish marketplace which sells drones.
Drone.net e marketplace platform
- Customer-to-customer (C2C)—the purpose of such a platform is to connect a seller and buyer. The object might be a product or a service. An ultimate example is a shop of used bicycles Semexe.com.
Semexe e marketplace platform
Types of marketplaces by the products they offer
Note: Marketplace can be named “global", if it exports its products all over the world.
By the target audience:
The difference between eCommerce and marketplace
These terms are often confused. Indeed, both eCommerce and marketplace have the same conceptual core, they are online websites. But the difference is in the number of vendors. If we look into the first marketplace classification and add one more row below, there will be the result:
eCommerce and Marketplace comparison
Note: eCommerce is a general term as well; its branch “Marketplaces" has been developed so dramatically that sometimes it is considered as an independent part.
Each type is suitable for a certain business. So, the choice of a platform depends on the specificity of business model, perspectives, and plans.
How does a marketplace help to grow your business?
Marketplace meaning in eCommerce and business is not exaggerated. There is a vast range of benefits of having commerce marketplace:
- Free clients traffic: it is a channel of clients without any expenses. Potential clients will find you easily when searching;
- Internalization of your business: a marketplace can be available worldwide—eCommerce is beyond physical borders;
- Convenient way to compare products, services and prices: clients can clearly find and compare everything on a website;
- Round-the-clock availability: there is no more dependence on the timezones and working hours;
- Enlargement of assortment by the means of new vendors: you as a business owner will not need to store any products and spend resources on building new warehouses;
- A source of income at the cost of vendor’s revenue: marketplaces can take a tax or fee from its vendors for using their platform.
Those who win people’s trust
Sooner or later any business reaches its highest point in an offline environment and leaders face needance to broaden their horizons. Choosing a platform and a team who will open up the new possibilities in the online environment can be a challenging issue. It is not for nothing that over 1,300 entrepreneurs trust CS-Cart Multi-Vendor. What are the advantages of launching marketplace on CS-Cart Multi-Vendor:
- User-friendly platform. It does not require coding but you definitely can create a unique design. It has intuitive operation for both vendors and customers. It has adaptive design for any mobile phone or computer.
- Technical support. The base configuration of the product is enough to start and provide interaction between vendor and customer but for sophisticated clients there are a lot of additional features and regular updates. The free support period is also included.
- Great possibilities for expanding. It is appropriate for huge projects since it can withstand high loads and can be integrated with different business services such as CRM, HR, ERP, etc.
You can try demo version of the product and test its functionality.
What should we expect for the future of marketplaces?
To reflect the current situation and prospects of marketplaces and eCommerce in general, we should turn to the figures for the last few years and analyze forecasts of the specialists for the future development of the global market.
Online and offline sales as a % of total retail* spend, in $billions, 2012-2021. Source: Digital Commerce 360 analysis of U.S. Department of Commerce data; November 2021.
The figures gave an accurate picture of the ratio between online and offline sales. This bar graph includes all costs, in particular, those which could not be organized online such as restaurant, bar and automobile spendings.
There is a stable growth within one unit from 2012 to 2016; from 2016 to 2019 we have witnessed more intensive rising of the online sailings which varies within two units, and finally the initial surge by 3,6 units has happened in 2020. This record leap has not yet beated.
Today the growth slowed down but not stopped. Many orders are still organized via online services and the interest for the online sphere is relevant. Specialists expect steady rising for the next few years.
eCommerce share of total global retail sales from 2015 to 2024 Source: Statista; January 2021
The curve illustrates global retail sales from 2015 to forecasted 2024. As we see more and more people prefer online shopping. These relevant market figures substantiate the demand for online commerce marketplaces. In the willingness to keep pace with the times entrepreneurs are switching to the online format.
Given the estimates, the number of marketplace commerce platforms keep climbing and in 2024 will remain comparatively high at around 22 per cent. It will be interesting to see when it peaks.
Taking into account the statistics, lasting pandemic and convenience of online services, the transition towards the new format is only a matter of time. The online revolution provoked by coronavirus has pursued many people to leave the common regime. It came as a surprise that for many of them it has turned out to be a breath of fresh air and their business started to flourish.
The significant aspect when choosing a commerce marketplace is a certain business model. It will define the type of the marketplace. The greatest feature of it is universality. Not only mature market players can benefit from introducing this technologically-based innovation but also the beginners can consider it as a growth point for their start-ups.
Marketplace in eCommerce has established itself and proven to be a reliable system. This sector cannot be ignored anymore. Those who plan successful development and steady progress should contemplate the possibilities that marketplaces can offer.