Whether you currently sell only on marketplaces or only from your own store or if you have a wide presence in lots of online locations, the role of marketplaces in eCommerce cannot be underestimated. Most of the world’s population of online buyers are buying from marketplaces rather than from a retailers own store. In Asia and in Emerging Markets marketplaces are the norm. In the western world, where for years retailers own .com sites have been the main players, marketplaces are growing faster than overall eCommerce and will become the largest driver of online sales here too.
Let’s briefly look at why there’s currently a difference between these regions. In Europe and North America people have been distance buying and distance selling for decades; indeed more than a century. The earliest retail catalogs date back hundreds of years but modern mail order, or distance selling, started in the mid 1800s. Tiffany published their first Blue Book catalog in 1845, the Thonet brothers, furniture makers in Germany, founded their mail order service in 1859, Pryce-Jones founded the mail order service of the Royal Welsh Warehouse in 1861 and Montgomery Ward, founded by Aaron Montgomery Ward in 1872. The expansion of the railways at this time no doubt helped these entrepreneurs to succeed at this time.
This meant that by the time the catalog of the future arrived, online stores, in Europe and the USA there was already an established practice of people buying and selling at distance, without having seen the goods in person. There was an established delivery network able to get goods to buyers. Sending payment via checks has been a part of life in Europe and North America since the 1600s. This incremental process of distance selling built trust over time so when online stores came along it wasn’t a large leap of faith.
Much of the rest of the world did not have this history and affinity with distance selling. When Jack Ma and his 17 co-founders set up the first eBay marketplace clone in China everyone expected it to be hugely successful. In the beginning it was not. Buyers did not trust sellers to send their goods and if they did there was a fear that sellers would send counterfeit or low-quality products. The original C2C (consumer to consumer) website was pivoted to focus instead on providing store fronts for Chinese businesses.
With some further modifying to build trust, or providing guarantees in place of the trust, Alibaba and it’s group of marketplaces became successful. They had recognized the core issue in their market and put solutions in place. Now buyers don’t have to trust sellers, they just need to trust Alibaba.
Many other regions are now growing eCommerce and facing similar issues, regions such as India, Latin America, South East Asia, and they are finding the Alibaba business model a better fit than the US eBay/Amazon business models. Not all for the same reasons, but mostly because they haven’t already gone through the process of learning and trusting distance buying and selling. As such, in all these regions, Marketplaces are taking the lion’s share of eCommerce traffic.
The switch to marketplace in the West has a different reason. With marketplaces now providing pretty much any product you could ask for, with buyers mostly now having experience of buying of marketplaces and in fact learning that if the marketplace rates a seller highly then they’ll probably provide a good service, many buyers are defaulting to marketplaces to start their shopping journey. Essentially using them as product search engines rather than searching on Google.
It means if you’re not on a marketplace where the buyer is searching then you’re not going to be getting that buyer. Even super brands have a new incentive to sell on marketplaces, given the easily found competition, and many are now doing so.
Fitting Marketplaces into Your Plans
There are a lot of marketplaces available but to help work out where to sell, you can break them down into the segments that you as a retailer will be interested in. Namely:
Geography, those with Global reach, Regional reach and Local/National reach.
Seller Focus, those that provide a platform for you as a retailer to sell your goods, think eBay, verses those that provide a platform for themselves first and other retailers second, think Amazon.
Categories, general and specialist.
This gives you a starting point when thinking about which marketplaces to engage with.
As we’re discussing generic localization you will want to go for those marketplaces that have the greatest reach. Testing in Europe and the US is easiest for most sellers regardless of location. Sellers still need to be on eBay and Amazon at this stage. You can also look at the likes of Mercado Libre if you have Spanish listings and are up for more challenging markets. Listing on these marketplaces will give you access to most of the top economies in the West.
In APAC (non-Australia) it can be more challenging for non-APAC Sellers but listing on Amazon and eBay will also give some access to these regions. You can look at the main marketplaces in regions that interest you to get more data in those areas. Flipcart in India, Shopee for South East Asia. Remember it’s not only the buyers from the countries that a platform is big in who will be buying from it. Others will too, just in smaller quantities.
My advice is start with what’s easy but without a doubt get onto marketplaces and make sure you are visible in all regions, usually be ensuring you provide shipping to those regions. In the coming weeks we’ll will go into detail how to sell on these individual marketplaces internationally but until then make sure you start buying a few items and maybe selling a few just to get an understanding of how they function if you don’t know already.
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