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Marketplaces and Mobile Consideration

Marketplaces and Mobile Consideration

In his book Platform Scale, Sangeet Paul Choudary introduces Platforms as an emerging business model wherein a business’s value is created by – and consumed by – users. These platforms connect producers who provide value with consumers who consume value. Platforms create suitable conditions for the production and consumption of value. A Mobile Marketplace, by extension, is a platform.

Statistic: Mobile activities of online shoppers in the United States as of February 2017 | Statista
Find more statistics at Statista

Mobile First Marketplaces first came into prominence in 2015 when Myntra, the India-based fashion ecommerce label decided to launch its mobile-app-only platform where its customers could only make purchases on the site through smartphones. Myntra moved to its app-only business model move came after the company claimed that 95 percent of Internet traffic on their site came mobile and 70 percent sales were generated through smartphones. The move to app-only back in 2015 generated mixed reviews and saw 10% dip in sales initially. In February 2016, the company retracted its app-only model in an attempt to win back lost customers. Nevertheless, Myntra took on a pioneer status of its own.

Today in 2018, Myntra has proved to be a forerunner of a new generation of “mobile-first” marketplaces that have dramatically superior ease of use, and enable constant grazing of marketplace content throughout the day.

Building a Mobile First Marketplace

A Mobile First Marketplace operator is in the business of enabling interactions. As the world becomes more connected, mobile first marketplaces tap into these connections and turn them into effective business models through value exchange and creation. For this reason, Sangeet Paul Chaudhary points out that ecosystems are the key enablers of value creation on platforms and a new source of competitive advantage.

As a commerce operator, you need to focus on three core areas to build a mobile first marketplace. According to Yalantis.com, they include:

– Inspiring your potential user base – get people excited about your platform.

– Building an infrastructure that will let users exchange value.

– Connecting users with each other, and also with goods, services or content created on the platform.

Designing a Three-tier Business Architecture

To design a marketplace that works, you need to start with a well-designed architecture (starting with an existing cloud-based platform such as Mirakl can help accelerate the process). All design decisions should ensure the repeatability and sustainability of the core interaction that the platform enables. A marketplace’s architecture consists of three basic layers:

Network-Marketplace-Community Layer

The network-marketplace-community layer consists of a platform’s users and the relationships among them. Interactions between those who create value and those who consume value happen in the network layer. For platforms, where the network-community-marketplace layer plays a dominant role, the community itself is the main source of value for the platform.

 Infrastructure Layer

The infrastructure layer consists of tools, rules, and services that allow users to create and consume value. In other words, the infrastructure layer makes the platform work. Platforms where the infrastructure layer is dominant derive most of their value from the unique infrastructure.

Data Layer

The data layer is comprised, as its name suggests, of data used by the platform. It conveys value from the producer to the consumer. In other words, the data layer ensures that a particular user finds the value they’re looking for, whether that’s content, services, or products.

In Closing

Year 2018 offers you a great opportunity as a commerce operator to capitalize on consumer conversion just by creating a user-friendly mobile-first eCommerce site. Jeff Jordan of venture capital first Andreessen Horowitz, strongly believes that while marketplaces take on different avatars, the principles to manage them and make them profitable successes still apply and remain the same. All of this brings us back to the point of Mobile-First Marketplaces. Make 2018 a ‘Mobile First’ year in which your retail experience begins with the smallest mobile device and scale upwards towards desktop computers.

If you would like to learn more about Mobile-First Marketplaces, write to us at engage@mcfadyen.com or connect with us on Twitter @McFadyenDigital

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