As we’ve written before, the overwhelming trend in e-commerce is towards cross-border shopping – consumers buying goods from sellers in a different country. As this trend moves forward, online marketplaces are becoming increasingly important as channels by which retailers can reach global consumers.
We’ve recently written about how marketplaces can help brands and retailers expand internationally.
Last year, researchers predicted that global cross-border e-commerce would climb to $1 trillion by 2020 – which would amount to growth of well over 300% in comparison to as recently as 2014. By that time, another piece of research showed, marketplaces would account for nearly 40% of e-commerce trade globally (the same findings indicated that two-thirds of shoppers would already choose to purchase from a marketplace).
All this shows that marketplaces are not merely growing on the back of a trend towards e-commerce, but are also have an increasingly dominant share of the overall e-commerce pie – something which both results from and contributes to their popularity with shoppers.
But what is it that attracts merchants to marketplace platforms?
Well, as we’ve written elsewhere, marketplaces represent a proven pathway towards global expansion for retailers and brands – thanks to the high levels of trust they enjoy in the markets they operate within, and the repeat custom they encourage by providing a familiar, convenient environment in which shoppers can expect always to find what they’re looking for.
It’s worth pointing out that when we speak of marketplaces, we don’t just mean the ubiquitous megaliths like Alibaba and Amazon. For example, the most popular marketplace in New Zealand is a site called Trade Me, which has more registered users there than Facebook, but isn’t widely known elsewhere.
With the help of these deeply-embedded local and regional platforms, brands and retailers can both find audiences with a high level of engagement, and plant themselves in the conciousness of consumers across the globe.
Of course, any successful marketplace is itself a busy and competitive trading environment. But online marketplaces offer a wealth of marketing features within their platforms to help sellers and brands get in front of the eyes of the right consumers – something which these platforms are uniquely placed to do, thanks to the local knowledge they possess.
As we’ve commented in the past, there’s a misconception out there that marketplaces are synonymous with discount retailing. But while it’s undoubtedly true that some do occupy this niche, there are hundreds of different platforms to choose from around the world, enabling brands to choose partners that closely reflect their values.
Marketplaces around the world naturally reflect the pre-existing retail landscapes of the places in which they operate. So, in Southeast Asia, they act as ‘virtual shopping malls’, fulfilling the same broad remit that might be placed upon physical retail spaces, but catering to the millions of consumers who don’t live near a big shopping hub.
Meanwhile, in Europe and the US, there’s a trend towards marketplaces with particular specializations – whether in technology products, clothing, or hobby supplies. And in China and the Middle East, local marketplaces have popped up to serve the growing demand for high-end fashion brands.
In our ever-globalizing world, the old-school cachet of traditional European brands is more alluring than ever to consumers around the world. For those that are prepared to seize the moment, the opportunity is huge: the likes of Burberry, which a generation ago was a small elite fashion house, have become global luxury empires – not least with the help of marketplaces like Ozon in Russia and China’s Taobao.
(Burberry’s Taobao store makes full use of the platform’s capacity for individualized branding, ensuring that the brand’s distinctive heritage is fully conveyed.)
Of course, it’s not just luxury brands that have harnessed the power of marketplaces. The British shoemaker Dune successfully sells its products via the French fashion marketplace La Redoute, and in doing so not only maintains its reputation for quality and style, but enhances it. US utility wear stalwart Timberland has taken a slightly different approach, using Spanish flash sale marketplace Privalia.
Many retailers and brands have been slow to look beyond the borders of their native countries – some feeling contented with local success, others daunted at the challenges and unknowns of global trade. But the fact is that if people within your home region are excited by your products, then there are likely to be many others out there around the world for whom what you offer will have an even greater capacity to delight.
Online marketplaces are a powerful partner in your journey towards taking the unique joys of what you have to offer to people all around the world.