The transformation in the retail industry is accelerating, with more products sold online every day and e-commerce becoming more important than ever. Already dominating the space, marketplaces are well positioned to facilitate this shift, in an increasingly competitive digital environment. This report profiles a diversity of marketplace business models from around the world, while analysing the trends that drive the transformation and the successful strategies built around them.
This report comes in PPT.
E-commerce reached a value share of 16% of total retail sales in 2020, with the top 10 marketplaces generating almost half of the world’s online sales. Amazon, Tmall and JD are the clear leaders. The platform economy transformed the retailing industry, and the way businesses sell products online.
2020 brought an unprecedented shift to e-commerce due to the COVID-19 pandemic. Searching for alternative channels to continue selling their products, retailers ramped up their omnichannel operations, listing on marketplaces or investing in own websites. This led to higher competition in marketplaces and fragmentation in e-commerce.
With the competition one click away, successful marketplaces need to understand and adapt to consumers’ current and future needs, focusing on service, satisfaction and engagement. By doing so they enhance the shopping experience and build loyalty.
Although marketplaces can provide quick access to online sales, the sellers’ positioning and goals need to be well aligned with the hosting platforms, and their capability to deliver in terms of user base, geographic reach, logistics, last-mile delivery, specialisation etc.
The explosive growth in e-commerce is likely to be followed by increasing digital sales regulations and taxation focus, with the goal to create an environment dominated by fair competition, to promote innovation and to protect consumers’ interest.
Even if ongoing vaccination campaigns provide hope for a return to normality, e-commerce is expected to continue its growth, pushed by increased interest from both companies and consumers. As a result, we expect e-commerce to generate more than half of the absolute value growth for the global retail industry by 2025.
Retail is the sale of new and used goods to consumers from a business for personal or household consumption from retail outlets, kiosks, market stalls, vending, direct selling and e-commerce. Retail is the aggregation of Retail Offline and Retail E-Commerce. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts. Also excludes fuel sales, foodservice sales, rental transactions, and wholesale sales (e.g. Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retail also excludes the informal retail sector. Informal retailing is retail trade which is not declared to the tax authorities. Informal retailing encompasses (a) sales generated by unregistered and unlicensed retailers, i.e. retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer that is not declared to the tax authorities. Unregistered and unlicensed retailers operate predominantly (although not exclusively) as street hawkers or operate open market stalls, as these channels are harder for the authorities to monitor than permanent outlets. Activities in the illegal market, which is usually understood to refer to trade in illegal, counterfeit or stolen merchandise, are included within our definition of informal retailing. Activities in the “grey market”, which is usually understood to refer to trade in legal merchandise that is sold through unauthorized channels – for example cigarettes bought legally in another country, legally imported, but sold at lower prices than in authorized channels – will be included as informal retailing if no tax is paid on sale by the retailer. However if the retailer pays tax – for example on cigarettes bought legally in another country but sold at a lower price than standard – the sale is included within formal retail.
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