DIGITAL INTERACTIVE SERVICES

Types of eCommerce marketplaces and their challenges

How many products have you started buying online vis-à-vis offline buying in the recent few years? It is convenient and cost-effective as customers have more choices. The popularity of e-commerce has increased by 46% since the pandemic, thanks to consumers’ massive shift in purchasing habits. On the business side, this has resulted in increased competition among e-commerce marketplaces where suppliers can list their products and services to reach a wider audience. As a result, e-commerce players are increasingly looking for e-commerce marketplace management services.

Famous eCommerce marketplaces

Some of the well-known eCommerce marketplaces globally are:

• Amazon
• eBay
• Etsy
• Walmart
• Decathlon
• Kroger
• StockX
• Houzz
• Newegg
• Fruugo

Some of the well-known e-commerce marketplaces in India are:

• Flipkart
• Meesho
• Myntra
• Snapdeal
• Pepperfry
• ShopClues
• Limeroad

eCommerce marketplaces, such as Amazon and Flipkart, offer a wide range of products. Other marketplaces, such as Etsy and Myntra, offer niche products such as art, vintage items, and fashion apparel.

Types of eCommerce marketplaces

To serve a business model, the marketplace must align with the purpose. Suppliers must choose the right marketplace for their products and services to reach the right audience.

Based on the type of product or service

• Physical goods This marketplace sells physical goods, with Amazon.com and eBay.com being the best examples.
• Virtual goods: Examples of marketplaces that sell virtual goods are Google Play Store and Apple Store, which offer mobile apps.
• Booking services: These marketplaces are interfaces for booking services such as hotels, taxis, flights, and holidays. Examples of these would be Booking.com and Skyscanner.com.
• Other services: The rest of the categories include job portals, freelancer portals, home care services, car care services, etc.

Based on the structure of sellers in the marketplace

• Vertical: This type of marketplace has multiple vendors of the same product. For example, Protoporia.gr is a marketplace for publishing houses. Amazon.com started as a marketplace for books.
• Horizontal: In a horizontal marketplace, several vendors with different products come together but have one distinct feature. For example, trsrentelco.com is a marketplace that offers electronic testing equipment for sale and rent from various brands under one roof.
• Global: This is a 360-degree marketplace that offers unlimited products from numerous vendors globally. A perfect example of this would be Amazon.com.

Based on the target audience

• Business-to-business (B2B): In this marketplace, one business offers its services and products to other businesses. The aim is not to find as many clients as possible but to create robust supply chains and long-term relationships. Examples of such marketplaces are Justdial.com and Indiamart.com.
• Business-to-customer (B2C): B2C marketplaces deal directly with the end customers. Here, the main goal is to acquire as many customers as they can to generate sales. Examples are Amazon.com, eBay.com, and Aliexpress.com.
• Customer-to-customer (C2C): This marketplace connects the seller directly with the buyer and lets them negotiate for the products or services. An example of a C2C marketplace is Semexe.com.

eCommerce marketplace challenges

Running a marketplace and doing so successfully is no easy task. The challenges are many, from getting the right customers and sellers to price wars with competitors and online fraud.

• Data security: Online marketplaces hold the personal data of millions of customers, which are susceptible to cyberattacks. Marketplaces need robust security systems to avoid data breaches through brute force attacks.
• Customer loyalty: It is difficult and expensive to acquire customers, but it is easy to lose them if you lack a retention strategy. With a bunch of choices available, it is a buyer’s market.
• Price competition: Marketplaces not only have to compete with other marketplaces but also provide the right balance of price so that they can serve both the supplier and the customer appropriately.
• Inventory management: Businesses must forecast the demand in real time to prevent shortfall or overstocking products in their warehouses.
• Return, refunds, and fulfilment: Fulfilment is just the first step. Managing refunds and returns and taking care of possible fraud is another. Marketplaces need technology to track returns and refunds and avoid fraud.

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How can Infosys BPM help?

With years of experience in consulting online marketplaces, Infosys BPM helps you deliver high customer satisfaction and value-driven services delivery through:

• Brand governance
• Catalogue management
• Marketing operations
• Back-office support
• Reporting and analytics

Read more about the eCommerce marketplace management services at Infosys BPM.