40% of ALL global ecommerce sales are expected to take place on marketplaces by 2020. According to a 2016 report by Forrester, two-thirds of online shoppers purchase from a marketplace at least once a month. When we’re looking to buy something, more than half of shoppers start their search with Amazon – rather than Google – to find it. And beyond the marketplaces we in the UK are familiar with – Amazon, eBay, ASOS – there is a whole world of marketplaces globally, many of whom feature in the top 10 most trafficked websites in their home markets, where they are household names. Take New Zealand’s Trade Me for example. In a country of just over 5 million people, TradeMe has 4.4 million registered users, is the country’s main digital platform and accounts for a whopping 75% of all domestic web traffic. Familiar with Cdiscount? They have 16 million monthly unique visitors and a 33% share of the ecommerce market in France, where they are second only to Amazon in reach and revenue. And there are dozens of similar examples around the world.
So what are you waiting for? If you’re serious about expanding your global footprint, it’s time to consider your global marketplace strategy.
The marketplace model
First the basics. The marketplace model is essentially as follows: the marketplace platform provides the traffic, technology, payment system and all of the underlying infrastructure required to sell products online. For a commission and a small monthly fee, any brand, retailer or manufacturer can list their products on the marketplace and take advantage of the existing customer base – often in the millions – to sell their items. For businesses looking to expand into new markets, it offers a quick and easy way to start selling before investing in a fully-localised version of your branded website. Perhaps more importantly, it offers new market entrants a way to build brand awareness, drive engagement with local customers and test the receptiveness of a new market to your products.
Top tips for working with marketplaces
Here are some of the key steps and considerations you need to cover to create your marketplace strategy.
1. Choose your marketplaces carefully.
It can be tempting to think bigger = better and focus your attention on the marketplaces with the most traffic and highest GMV, but this won’t always be the best decision for your brand, and may even mean failure to launch. Chinese marketplaces have staggering traffic and sales figures, but the barriers to entry mean they are definitely not right for all but the most sophisticated (and deep-pocketed) international brands. A better approach is to think about your target customers. If you know your customers shop on a specific marketplace, then you should consider being on there. There are many smaller (relatively), more specific and niche marketplaces that may suit your business – do you create personalised gifting products? not on the high street; Consumer electronics, gadgets or smart home devices? Newegg; DIY or home improvement products? Mano Mano. You get the idea. Go where your customers (or target customers) are.
2. Launch new marketplaces one at a time.
Whilst most marketplaces will follow a similar set of rules, processes and best practises, each platform is unique and it will pay to do a deep dive to really understand the individual nuances, how to drive traffic to your listings, what the various marketing opportunities are, what the marketplace SLAs are and how you can make sure you’re in compliance. Put in the legwork at the beginning and you will avoid pain or even suspended accounts later on.
3. Get the basics right.
One of the major pros of marketplaces is the built-in, trusting audience of ready-to-buy shoppers. One of the cons, is that your competitors and even the marketplace itself may be competing with you for that shopping spend. There are a few things you can do to ensure you take your share of the pie. Most marketplaces use a catalogue system, where EAN codes are used to group all offers for a specific item on a single page. The top slot (Buy Box in Amazon terms) will usually go to the seller with the best commercial offer and the highest rating. You can achieve a high seller rating by meeting the SLAs set by the marketplace for responding to customer queries, making sure you deliver within your stated shipping times, and avoid cancelling orders you have accepted because you’ve gone out of stock without realising.
4. Create a discoverability plan.
The first step is getting your product data just right. Make sure you provide photos in line with the marketplace guidelines. Usually that will mean a variety of angles, shot against a plain white background and a zoomed in version of each photo. Use all of the available image and video slots provided to give your customers the best experience possible. Make sure that you also provided accurate product titles and detailed product descriptions that highlight the key features of your items. If you sell technical products, include a detailed technical specification for each item, and a way for shoppers to compare models if relevant. Read your online reviews and talk to your sales team to find out what the most frequent product-related questions or comments are – and incorporate these into your descriptions. Once and only after you’ve mastered these basics – build a marketing plan for each individual platform. Most marketplaces have their own advertising units, and all offer some combination of display advertising, sponsored search, enhanced content marketing and targeted email campaigns on a paid basis. Create a strategy like you would for your own website and use these tools to increase your sales exponentially.
5. Take advantage of partners.
A whole industry has built up around marketplaces sellers. Most marketplaces will require you to provide local returns addresses in each market where shoppers are. If you’re a small local business this can seem insurmountable. But there are numerous companies who can provide you with this service for a low monthly fee and a price per return. They allow you to offer your international customers a user-friendly, fully-localised returns experience, and will consolidate your return items into bigger shipments to create cost savings, or even resell your products locally for you, turning returns into cash. Similarly, currency service providers can help you manage operating in multiple currencies, by setting you up with virtual dollar, euro and other bank accounts, and helping you repatriate funds from your international marketplace sales when rates are most favourable. Finally, if your plan is to use numerous different marketplaces across multiple geographies – you will definitely want to consider a feed management provider. These companies, also called integrators, can help you centralise your product, stock and order feeds in one location, which greatly reduces your overall admin, as well as reducing the risk of inaccurate stock data as you sell on different channels simultaneously.