Marketplaces as a radical business model change

Marketplaces boom has overwhelmed us all, from individuals to businesses, from teenagers to mature people; they are now an integral part of our age and have revolutionized the purchasing culture and business model of many companies.

A marketplace – as per the definition included in the 21st century lexicon – is a real or virtual space in which activities of buying and selling goods and services take place among a plurality of buyers and sellers. The growing popularity of the Internet has made the rise of online marketplaces (e-marketplaces) exponential.

Digital commerce is growing year by year, and the pandemic has given a very strong acceleration to a trend that was already (even if more slowly) growing, as marketplaces have temporarily been almost the only buying destinations with adequate selection and availability and performing processes. Indeed, the coronavirus and the months-long retail shutdown accelerated the willingness of manufacturers and retailers to develop digital access for their customers. However, even without the pandemic, they would still have had to develop online, but would probably have done so a few months or years late. The pandemic generated a supply and demand shock that helped the entire e-commerce industry increase sales and market share exponentially globally.

While (almost) all e-commerce vendors benefited in 2020, already in 2021 it became evident that it is mainly marketplaces that are further extending their market power. By 2024, 40% of global e-commerce sales are expected to be generated through online marketplaces (Oliver Wyman Future of Retail Study). This represents a doubling of market share in just a few years.

“The march of marketplaces will continue to disrupt e-commerce, creating huge opportunities for first-movers and smart incumbents… Marketplace growth will continue at 15% per year in the West and become as large as direct online retail in established categories by 2025 (accounting for 45-50% of online spend). This will push direct eCommerce into decline in some markets and segments.” (OC&C)

This significant growth in online sales, however, has highlighted the need to create resilient logistics: only players with direct control over logistics or access to equally efficient partners have been successful.

In addition, to satisfy both trading partners and final consumers, marketplace operators are continuously developing new tools and services (e.g., payment management, augmented reality, fast delivery services, review management, etc.) that make them increasingly attractive and indispensable to consumers, but also to marketplace vendors.

But not only that. E-marketplaces no longer serve only as product search engines, but increasingly also as advertising and entertainment mediums, thus gaining almost totalizing relevance across all touchpoints of the customer journey. The boundaries between social media and commerce are becoming increasingly blurred through the use of influencers or interaction formats such as live shopping.

So, we see how all of this is part of a unique and huge ecosystem, touching different industries (IT, commerce, supply chain, operations, transports, communication, finance, etc.) that now find themselves sharing a single goal. And this ecosystem continues to expand day by day.

Studies of marketplaces not only fascinate insiders but are excellent sources for all businesses: it is critical to stay abreast of evolving marketplaces, and it is strategic to pick up on developments-which are going at the speed of light-to stay one step ahead.

Identifying the right marketplace for your business is an analysis and planning job that requires significant internal and external management work: it is neither trivial nor immediate if you don’t want to waste energy and resources. Roncucci&Partners helps many companies in that activity by identifying the right targets and channels for its clients.



Stefania Gilli e Valentina Gestri Paolucci

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