Global marketplaces such as Amazon, eBay and Alibaba may be taking an increasing chunk of worldwide e-commerce revenue, but it seems we haven’t seen anything yet.
According to a survey conducted on nearly 300 retailers from over the world, these stores will own 39% of the global online retail market by 2020 as their dominance is taken up a notch.
While many would be led to believe that online marketplaces already deliver a huge chunk of online revenue, a graph from the study – ‘Rise of the Global Marketplaces’, from the Ecommerce Foundation – shows just how much extra they’ll need to earn to get to the magic 39% barrier.
In China, the country’s top two marketplaces – Alibaba and Jingdong Mall – take a 80% share of the market, while Germany has seen Amazon DE and Otto account for 55% of earnings.
Poland has Allegro Market Place on 50%, Japan has Rakuten Ichiba and Amazon JP dead on 40%, but these are the only nations out of the 18 examined where marketplaces exceed the market share they’re tipped to gain by 2020.
A more even playing field is found in Argentina, Canada and South Korea, where the top two marketplaces fail to hold a share above 10%. Estimates from the study have many of the other nations floating around 20-30% in terms of how much they own.
In short, marketplaces have a great deal of ground to make before they step ever-closer to a majority stake. That said, the survey’s mapping of growth experienced by six well-known marketplaces – Amazon, eBay, Facebook, Alibaba, Mercado Libre and Google – make for interesting reading.
Amazon has seen the sharpest rise in revenue since 2005, up to $89 billion last year, but Facebook’s recent growth is also worth noting
The companies are having no issues with turning earnings into profit – another graph from the study showing Google to be leading in EBITDA.
Conclusions derived from the retailer survey showed that smaller sellers generally consider themselves to be on a par or even better than global marketplaces at customer-facing processes. This encompasses CRM, use of human resources and the general standard of customer service.
Where global marketplaces are likely to steal ground is in IT and big data, where retailers admit they cannot compete.
The action
The study might paint a picture of a market preparing to make a sizeable fortune for a very select pack of global behemoths. However, it seems online retailers have a good idea of how to claw back some of their lost earnings.
Taking the route of ‘if you can’t beat them, join them’, retailers are planning on using the marketplaces to sell internationally at the same time as getting specific with customer segments, markets and products.
The groups are also looking to premium products as a way to steal market share, as the marketplaces – which offer reach but without a valuable customer ‘experience’ – are offering “very little” for luxury sellers.
Finally, operating at the core of any successful business, the group will be looking to improve their customer service and delivery in order to ensure that people that do buy with them are given reason to repeat their buys.