It’s been a suspicion of many for some time but the recent report from The Ecommerce Foundation and Nyenrode Business University finally provides some evidence to back the suspicions up, following some research. Basically marketplaces are in the ascendancy.
It was ecommerce news where we found the research highlighted. In short it looks like retailers expect marketplaces to own just short of 40% of online retail by 2020. The full report is available on the Ecommerce Foundation site.
40% sounds about right, perhaps it could be even higher. For retailers wanting to build an online presence the costs are high – so no wonder they are opting to sell through the marketplaces that have effectively become the new online shopping malls.
Building your own ecommerce web site is simple enough, but it is a feature of budget, the more money you have the more money you can spend and the more sexier and feature rich it can be. But once built the costs don’t stop. Online search optimisation is more time consuming than ever – endless copy writing to keep Google amused is hard work, building referral relationships equally time consuming. And PPC is costly when you get it wrong – you’ll need to man that continually in order to see what is working and what isn’t. PPC is not a set up and forget activity.
Once you have attracted the traffic to your site you’ll need to ensure a high proportion spend and then come back. But if you are selling in a competitive landscape your visitor is a second away from a better price, better info or better delivery – lets face it, establishing a profitable online ecommerce business without using the marketplaces is hard, really hard. And you’ll have to build a reputation for customer service that is unassailable.
So no wonder then that for some time informed comment has been suggesting that marketplaces are growing faster than ecommerce generally. Thanks to the research from The Ecommerce Foundation that is now proven beyond doubt.
The ecommerce world is big – “one trillion dollars per annum globally” – being one headline we particularly like, 40% of that is quite a big number. Looking closer to home IMRG recently reported that ecommerce in the UK in 2014 exceeded £100 Billion, again 40% of that is clearly big enough to be it’s own ecommerce sector.
Selling on the marketplaces is ideal for many retailers and with a little ambition and an organised supply chain, sales can increase significantly. It’s easy enough to see why – if you are selling on Amazon UK, then there is little to stop you selling on the other Amazon markets – America, Germany, France etc. And the same goes for eBay. So increasing the size your business is straightforward – handling VAT rates is about as complicated as it gets.
Add into the mix systems that manage multiple marketplaces and the potential to sell more becomes a reality.
Within the next 5 years 40% of online retail will be running through the global marketplaces, that’s coming straight from the research carried out on retailers – that’s the validation to the suspicions we were waiting on.