In the current challenging economic environment defined by supply chain bottlenecks, high inflation, price sensitivity and increasing expectations from customers, marketplaces find themselves well positioned to navigate and succeed in the dynamic e-commerce channel. This briefing analyses three major trends that shape successful strategies and drive innovation in marketplaces, through the lens of eight companies operating marketplaces around the world.
Posting the strongest growth in the entire retailing industry over the pandemic years, e-commerce is expected to continue growing and to represent 25% of global sales of goods by 2026, following a 10% CAGR over the next five years. This opportunity will boost competition, with developments in logistics, use of technologies and innovation as strong differentiators.
Companies operating marketplaces are dominating in e-commerce. Benefiting from increasing numbers of sellers and online shoppers, sales of third-party merchants posted higher growth than the overall channel in 2021 and are likely to reach 50% of online retail sales over the next years. However, this strong growth also leads to increasing regulatory supervision.
The retailing landscape is navigating a period of instability defined by supply chain bottlenecks, high inflation, shortage of products, rising prices and growing operational costs. Marketplaces offset some of these challenges by providing a low-risk platform for online sales to a diverse group of sellers that operate independently, offering a wide range of products and prices.
Consumers are more digitally savvy and open to spend online. However, they expect seamless shopping experiences, competitive prices, faster and diverse delivery options, easy and secure payments, and lately a stronger focus on sustainability. Having access to a great volume of data, marketplaces can understand customers’ expectations, and should even predict future trends.
Repeat customers are more profitable than one-time shoppers. Marketplaces’ strategies focusing on efficient logistics, well-positioned category specialisation or on creating synergies through ecosystems that benefit the retailing activity can be approached separately. However, together these represent efforts to build trust, loyalty and repeat customers.
Sales of new and used goods to the general public for personal or household consumption. Excludes specialist retailers of motor vehicles, motorcycles, vehicle parts, fuel. Also excludes foodservice, rental and hire and wholesale industries (Cash and Carry). Sales value excluding or including VAT/Sales Tax. Retailing is the aggregation of Store-based retailing and Non-store retailing. Retailing 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, ie retailers operating illegally, and (b) any proportion of sales generated by a registered and licensed retailer which 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 retailing. In relation to click and collect purchases (i.e. where purchases are made over the internet but picked up at store) where the sales data is attributed depends on where the payment is made: If payment is made in store, then the sale is included in store-based sales. If payment is made over the internet, then the sale is included in internet retailing.
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