It started in 1984. 72-year-old Jane Snowball had just broken her hip. Because of the injury, she was asked to participate in the Gateshead Shopping Experiment, a program designed to help pensioners with mobility problems.
She agreed, and her participation got her a standard television with a Videotex chipset and remote control with a "phone" button. This piece of technology transformed her old telly into a computer terminal connected to retailer computers that processed orders.
She sat down in her armchair, pressed the "phone" button on her remote, and saw a directory of available retailers in her area on her TV screen. She chose Tesco and made an order for cornflakes, eggs, and margarine.
Tesco received her order, packed her goods, and delivered them to her door. Thirty-eight years later, the global retail e-commerce industry is expected to generate more than 7 trillion dollars in sales by 2025.
Today's orders are more sophisticated and complex than Mrs. Snowball's three-item list. At the height of the pandemic, people bought a lot of laptops, televisions, and even vehicles from online retailers. And we have more than a couple of retailers to choose from now.
In fact, there are reportedly as many as 24 million retail websites in 2022.
In fact, there are reportedly as many as 24 million retail websites in 2022. The proliferation of all these online marketplaces is mostly due to the fact that people prefer buying online nowadays.
In fact, one in every four people in the world reportedly shops online. In 2021 alone, 2.14 billion people purchased products through online marketplaces, which is about 28% of the entire human population.
The same growth is projected when you localize this data to a specific country, such as the United States. By 2023, experts expect 300 million more Americans to shop online.
And everywhere else in the world, e-commerce has logged significant boosts in profit. Latin America recorded a 25% increase in e-commerce sales in 2021 (85 billion dollars), while the Philippines, Russia, and the UK saw a 20% growth in their respective regions.
Why People Like Shopping Online
The rise of online shopping sales is backed by many factors, foremost of which is the COVID-19 pandemic. Digital Commerce 360 added almost 219 billion dollars to e-commerce sales between 2020 and 2021.
Market and consumer data researcher Statista also says that in the Asia Pacific region. 17% of respondents said their shopping increased to two to three times a week after COVID-19. Compared to once to thrice a month before the pandemic.
17% of respondents said their shopping increased to two to three times a week after COVID-19.
In the US, another survey by Statista found that consumers reported a 13% increase in buying household supplies after the pandemic; frequency also increased. This trend is expected to continue, especially because there are a lot of benefits associated with buying goods on online marketplaces instead of traditional stores.
Some people even feel okay with never visiting a physical store again, according to a JungleScout survey.
Some people even feel okay with never visiting a physical store again, according to a JungleScout survey.
Wow! First off, shopping online accords people a lot of conveniences, and this is central to the appeal of e-commerce marketplaces. For example, the check-out process for online orders is very fast (no standing in lines).
With next-day delivery options, there's more incentive. Oberlo says that about 28% of surveyed consumers say getting their orders the next day is an important motivator. And if that's not enough, some stores offer free shipping. Consumers can also apply vouchers to get discounts for more value.
What are the Top Online Marketplaces in the World?
Leading the pack of online marketplaces in the world is Amazon. Started in 1994 as an online bookshop out of Jeff Bezos' garage, it shot to nationwide popularity within a month of its launch.
Today, it has a market cap of around 1,700 billion dollars and is way ahead of global competitors like Alibaba, Pinterest, eBay, and Rakuten. The majority of its sales come from people buying books, videos, and music. Additionally, 65% of its US-based shoppers are subscribed to its paid subscription service, Amazon Prime.
Another contender is eBay, which started as AuctionWeb and was envisioned to bring buyers and sellers together "in an honest and open marketplace."
Twenty-seven years later, it's pulling in more than 10 billion dollars in annual net revenue, mostly through transaction fees. Alibaba operates in 30+ countries, with more than 180 million active users.
Alibaba operates in 30+ countries, with more than 180 million active users.
Jack Ma's Alibaba holds sway on the other side of the world. Founded in 1999, Alibaba was put together after an investment of $80,000 from 80 investors for a Chinese online marketplace. Since then, it has expanded into a wide array of B2B and B2C services, as well as cloud infrastructure, media, and entertainment.
In 2021, Alibaba totaled 109 billion dollars in consolidated revenues from advertising, membership and other service fees, and sales commissions. It also successfully killed eBay's attempt to enter the Chinese market in 2003 by removing merchant fees on one of its online marketplaces, Taobao.
What Does This Mean For You for Starting an Online Marketplace?
The success of these online marketplaces provides a clear view of the potential value of starting your very own marketplace website. Like Amazon, eBay, and Alibaba, an online marketplace offers a platform for sellers to offer goods to buyers. There are four main types of online marketplaces: vertical, horizontal, global, and hybrid.
A vertical marketplace enables different sellers to offer the same types of products. If these products have the same set of characteristics and are sold online by different vendors, that becomes a horizontal marketplace.
One key difference between the two is the specific type of products sold. For example, handcrafted wearables will be sold in a vertical marketplace, while all types of clothing, including those made by hand, will be sold in a horizontal marketplace.
A global marketplace, on the other hand, brings all types of products to all types of buyers.
A hybrid marketplace offers its own products in addition to those sold by sellers.
The way we shop has shifted. The COVID-19 pandemic had a significant impact on the way we all shop.
According to research undertaken by the United Nations Conference on Trade and Development, the Brazilian Network Information Center, and Inveon, online purchases in several product categories increased by 6 to 10 percent since the pandemic.
This is particularly true for ICT/electronic goods, pharmaceutical/health products, gardening and DIY tools, education and online courses, and furniture and household products.
Similarly, McKinsey noted that the US grocery sector saw a 20 to 30 percent shift to online platforms as lockdowns were enforced, accelerating its e-commerce landscape by three to five years.
And this won't stop soon, as about 50% of surveyed consumers admitted to doing their grocery shopping online at least once a week, which can be interpreted as a new-normal mainstay. Additionally, the increased need by consumers for personalization has resulted in 35% of shoppers opting for niche marketplaces instead of traditional ones.
While almost half of the product searches start on either Amazon or eBay, more and more shoppers are getting adventurous and exploring other, more specific marketplaces. Especially for apparel, sneakers, or home products.
While almost half of the product searches start on either Amazon or eBay, more and more shoppers are getting adventurous and exploring other, more specific marketplaces. Especially for apparel, sneakers, or home products.
And there's now a plethora of support available to vendors. Shopify, for example, continuously offers new features to ensure that service offerings remain relevant amid changing trends.
Of course, it won’t be realistic to think that you’d be able to compete with giants like Amazon within your first month, but holding your own is not impossible, as consumers are displaying lower loyalty to brands because of changing priorities or economic factors.
Start Your Own Marketplace with Yclas
At the same time, starting your own marketplace website is not as difficult as it used to be. Yclas offers an easy-to-use platform replete with themes and templates that you can customize according to your specifications.
Whether you want to start a horizontal, vertical, global, or hybrid marketplace, an online car dealer website, or a business directory, there are a ton of built-in resources that you can use to go live in a day's time.
Need your website to integrate with other platforms? Yclas integrates with Facebook, PayPal, Stripe, Bitpay, Google Maps, Dropbox, and others.
This turnkey solution is perfect for those without worrying about hosting, installation, and coding skills. You can create a 100% customizable website installed on your own server.
Or you can go all in and get all that, plus create an iOS or Android app for your marketplace website.
Join our community today!
