Samiksha Hiwase | 6 Min Read | December 25 , 2020
1. Quick read
The new online marketplace is competitive, its competition and competitiveness enhanced by the nature of the technologies themselves. However, when your organization accomplishes clear market leadership – generally as a quick follower with smarter execution than the pioneer – it attains complete dominance and is then near impossible to displace.
The online marketplace gives an impression of being the greatest beneficiary of this “new typical” as customers try to supplant their ordinary weekend journeys to shopping centers with browsing the shops online. This article introduces you to the prominent reasons why the online marketplace is the biggest winner in all situations.
2. The Offline-to-Online Conversion
Given the present circumstances, beginning with the lockdowns in almost all countries, most customers were stocking up on necessities like groceries and family consumables at both offline and online stores. Once these provisions were done, buyers gradually went to the online marketplace looking for toys, entertainment, games, sports goods, and electronic gadgets. A survey shows that eCommerce purchases of wine, beer, and related accessories also rose by up to 74%.
At the end of the day, customer behavior has changed. And this change may not be limited just to the present condition. As countries unlock and open up, we still notice shopping centers experiencing an uncommon decrease in footfall. While a part of this may be due to abundant caution on the part of the buyers, a larger reason is that the interest and demand for the online eCommerce marketplace are here to stay for the long haul. We had noticed a similar move to the online marketplace even prior to the present conditions. The existing lockdowns and closures simply accelerated this move to online shopping.
3. The Rise in Online Marketplaces in various fields
Given buyers’ changing demands which can disrupt inventory chains, organizations worldwide across different businesses need to reconsider the manner in which they work and are beginning to take an interest in online marketplaces as an effective reaction. With their digitization capacity and an inherent ability for collective purchasing and inventory management, online marketplaces serve to make up for the shortfall of actual stores or their absence in some geographies, and the decentralized purchasing and storage necessary for offline stores spread across regions.
Shoppers can find products in a single convenient place which is located at the tips of their fingers, while merchants are presented with a huge and expanding base of clients on the online marketplace. Thus, it is expected to see enterprising businessmen venturing out of their business inertia to set up their own online marketplaces.
Here are a few examples of ventures that have seen the rise of the online marketplace
As indicated by UNESCO, 91% of all students overall saw their schools shut, setting a surprising focus on online learning. A flood in worldwide online schooling combined with remote working because of COVID-19. Not just students with online classes, there erupted online classes even for the employed or temporarily unemployed people, who kept going to the internet to learn how to upskill, remain occupied, and increase productivity.
Udemy, a worldwide marketplace for gaining knowledge and training online revealed that they encountered a 425% expansion in enrollments from customers, 55% increment in course creation by educators, and 80% increase in utilization levels from private businesses and governments during the current spate of lockdowns.
The quickening trend in online education with learning made so easy and simple means more organizations are entering the educational field to tap its latent ability through creating online learning platforms. Online education institute information platform, network, and online marketplace for instructors and publishers. This new online knowledge platform will unite educators worldwide to share and access excellent learning content and other relevant assets.
As shortages of critical medical equipment and well-being products occurred, almost all companies in these and related sectors created online marketplaces to connect buyers and providers of medical care. Any disease or pandemic situation will definitely translate into an increase in business of the medical and wellness segment. The present one led to the formation of online healthcare marketplaces worldwide. Organizations are cautiously curating products to guarantee that they are not being sold at exorbitant costs, and are also locating respectable providers simultaneously. Examples in this field such as Edge4Health (United Kingdom) and B2B Manitoba (Canada) abound. Governments have likewise stepped up to collaborate and team up with applicable partners to extend their stocks of medical equipment.
A case in point is where government departments have entered into a partnership with various Hospital Associations to launch an online marketplace for medical equipment – this is a public/private partnership that matches organizations that manufacture or assemble and sell medical gadgets on the marketplace platform. A few nations like the UK additionally have websites that extend the list of raw material providers for their online marketplaces from different nations.
Online marketplaces were already proliferating in the travel field much before the present pandemic. These are believed to have played a significant role in the growth of the travel industry over the last decade. These marketplaces also request travel planners to join up and contribute their professional destination knowledge. They also connect travel and destination specialists and provide them access to a worldwide database of online clients who are looking to travel.
An online marketplace, TRVL.com has 5000 agents around the world who are utilizing their marketplace platform to book hotels through providers like Expedia, Booking, Bedsonline, and Priceline. The industry is additionally beginning to adjust its plans of action to tide through the short run and become more economically strong in the future.
The other example – in the Philippines, MAD Travel has begun the MAD Market, an online marketplace platform that sources from local farmers and SMEs, while conveying new produce to doorsteps across all over Metro Manila. Despite the fact that it is an obvious business move, it actually keeps the organization’s value proposition of connecting farmers and networks together – through the online shipping market rather than tourism. Co-founder Rafael Dionisio has shared that MAD Market will at present be on-going in all situations, travel industry bounces return back again, “it gets in other channels fro development of town economy and it should connect desirably to the number of networks and groups”.
Food and BeverageField
The Food Marketing Institute and Nielson together estimate that 70% of buyers will purchase probably a few samples of groceries online in the coming five to seven years. Quick forward now, effectively over half of the world’s retailers have started a plan to sell their merchandise on the online marketplace. Retailers are additionally upgrading their platform framework and re-creating their products strategy, transforming the opportunity to gain market share in the online marketplace.
The relevant examples are – In South Korea, super chain E-Mart is looking to get rid of pain spots and entice new customers to their stores, guaranteeing their contribution is consistently omnichannel, through the creation of an online marketplace platform incorporating its numerous grocery formats.
In North America, many people have additionally built up their own grocery online marketplace by conveying a simple digital onboarding experience for third party dealers and a brand new platform giving quick and easy access to the huge grocery’s customer base.
To enable nearby F&B administrators, Singapore has resolved to give sellers and smaller eateries a more moderate choice of going online through an association with the FairPrice Group and food shipping startup WhyQ. The new advanced food transport online platform called Marketplace @ WhyQ empowers F&B administrators to ship their food island-wide while charging them zero commission.
4. Reasons why online marketplace platforms are the all-time winner
Direct (within-market) network effects
The estimation of an interchanges network increments excessively as it grows, acquiring more others for every client to connect with. This impact is officially known as a “direct network externality” (“externality” since it includes third-party outsiders similarly to the individual client and firm).
There can likewise be both good and negative “behavioral” direct organization impacts if other customers’ adoption of a product makes it either more, or less, worthy, attractive, or trendy. For example, these behavioral results are significant for youngsters’ decision of social media. Direct organization impacts occur when a given customer’s utility increments with the number of different customers of a similar product or technology, implying that adoption of an item by various customers is complementary.
Machine studying and Big facts
Digital agencies accumulate information relentlessly, inexpensively, and proficiently. To take advantage of it, they use analytics, progressively computerized (“machine studying”), mostly to drive persistent improvement in services and products, costing, personalization.
They frequently add free or sponsored services to create more information, delivering a recursive connection among adoption and use, product and service quality, and the further selection and use.
Amazon, for instance, continually assesses and refines its services and communications, getting serious about what works and strengthening its dominance. The combination of huge information and machine study enhances network impacts and re-visitations of scale, once more strengthening marketplace leaders’ dominance and preventing others from entering.
“Marketplace stage financial aspects” or Indirect (cross-organization) market impacts
Most organizations are, at any rate, “platform” businesses: they make an incentive by coordinating clients with complementary necessities, for example, programming designers and clients (Microsoft’s MS-DOS and Apple’s App Store), providers and clients (Amazon), drivers and likely travelers (Uber) or sponsors and buyers (Google and Facebook).
These organization impacts are “indirect” on the grounds that – not at all like with the direct, single-market, externalities above – the value to members in each market (for example Diners) relies upon the number of members in the other market (for example Restaurants), and vice versa.
When a platform dominates the important business sectors, these network impacts become self-supporting as clients on each side assist clients on the other. The overall term for stage markets is “multi-sided” because a few platforms encourage connection between multiple kinds of clients. For example, Facebook interfaces six: friends as message senders, friends as message recipients, application developers, advertisers, and agencies as both message receivers and senders.
Indirect effects are those impacts that do not result directly from your organization’s tasks and are frequently created by different substances at an alternate area and time. These effects can be discovered ‘upstream’ of your business and brought about by the providers that give you raw materials for your items.
A Switching price can be built-in
Tech organizations send a scope of procedures to secure clients by making it expensive to switch to a rival.
The incompatibility between suppliers (“walled gardens” – for instance, where iOS applications don’t work on Android) and the subsequent loss of non-portable information, and the time required to learn a specific framework (“brand-precise shopper human resources”), all discourage consumer mobility.
Service customization, and accumulating content material, for example, playlists that can’t be relocated, further add to exchanging costs.
Strong client brands and ongoing use
Google, Apple, Amazon, Microsoft, and Facebook rank – in this order – as the five most significant brands in the world, worth a little more than a trillion dollars, or almost 30% of their $3.6 trillion joint market capitalization.
Other brand valuation organizations concur that these are among the most important worldwide brands (the actual or perceived numbers can vary).
Advanced products are “experience products”: clients need to attempt them and find out about them (from their own or believed others’ utilization experience) to pass judgment on their high-quality.
Notable, believed brands are fundamental in an online marketplace platform to energize trial and discourage switching to a competitor. Utilization becomes recurring or even addictive, reinforcing the incumbents’ dominance.
5. Wrapping up
The value of online marketplaces is no longer being challenged. They may not exclusively be platforms to encourage the pattern towards virtual transformation, but they help organizations to reduce the upfront funding needed to scale with their low access cost, and they also facilitate customer comfort. Online marketplaces are consequently quickly turning into the powerhouse behind the new standard that is tilting towards eCommerce, and are, for sure, the greatest winner in all situations. You can contact our team to assist you in creating a winning online marketplace.