The Marketplace Model Boom: $4 Trillion by 2020
Marketplaces to drive “Fourth Wave” of Ecommerce with projected global sales of $4 trillion by 2020
A market report by eMarketer, the market data leader estimates that the global ecommerce market sales will reach the $4 trillion mark by 2020. This growth, according to Shopify, will be driven by the “fourth wave of ecommerce involves global ecommerce markets — literally enabling anyone to buy anything, anytime, and get it delivered anywhere.” It is clear now that thousands of marketplaces will occupy unique niches for products and services in a space once occupied by Amazon, Alibaba and other ecommerce players.
The Stats
Marketplaces are the most vibrant segment of the proverbial Fourth Wave. Shopify found that “Global marketplace platform provider revenues are expected to more than double from $18.7 billion in 2017 to $40.1 billion in 2022, driven by the sharing economy. Reflecting this is the fact that 30 niche marketplaces launched have received $2.3 billion in investment between 2012 and 2017.”
A 2017 Forrester Research report reveals that 95% of all consumers have already used a marketplace and more than 50% of buyers have revealed that it has changed the way they shop. They are now the premier disruption in the $23.86 trillion global retail Industry.
Adobe Digital’s “Holiday Predictions” report reveals that online sales have grown over 3 years from $82.5B (2015) to $94.4B (2016) to online sales of $108.5B (2017) registering over 13% y-o-y growth. According to eCommercenews.eu, the projection is that global marketplaces will own 39% of online retail market by 2020. A Gartner study reveals that over 60% of online sellers will list their products on marketplaces or sell third party products on their core commerce sites by 2020.
The New Marketplaces
The Fourth Wave of Ecommerce has a new generation of marketplaces coming up post 2018. There has been a surge of new marketplaces providing platforms for trading services, focusing on niche categories and serving specialized demands worldwide.
Businesses and individuals are increasingly selling products and services through specialist marketplaces in both business-to-business (B2B) and business-to-consumer (B2C) spaces:
McKinsey predicts that with the rising prosperity and participation of the emerging world, global flows of goods, services and flows would more than double, estimating that flows would reach between $54 trillion to $85 trillion by 2025.
The Road Ahead
Online marketplaces are the most vibrant segment of the ‘platform revolution’ dominating the 21st century because they reduce the cost of value creation, consumption and quality control. They serve business to customer and business to business markets, while powering rapid growth through economies of scale. Here is a listing of the world’s leading marketplaces:
Amazon – Books, clothes, furniture, electronics, etc.
Alibaba – Leading Asian marketplace selling all product types for B2B and B2C
Bonanza – More than 25,000 sellers offering fashion, collectibles, home décor
eBay – Automotive, electronics, apparel, and one-of-a-kind collectibles
Etsy – All things unique and handmade
Sears – Appliances, automotive, clothing, and electronics
Newegg – Primarily computer hardware and software
Jet – Grocery, home products, electronics, books, sports, and clothing
Overstock – Helps liquidate excess inventory for home, jewellery, and electronics
Rakuten – Japanese computers, electronics, apparel, home, and sporting goods
Pricefalls – Electronics, computers, and accessories
3Tailer – Home & garden, commercial, sporting/wellness, unique items, and luxury items
Walmart – Electronics, home goods, tools, outdoor
Uber – Connecting driver partners and riders
Zibbet – Handmade, fine art, vintage, and craft items
Marketplace model revenues are expected to double between 2017 and 2022. Juniper Research forecasts that global marketplace platform provider revenues will grow from $18.7 billion in 2017 to $40.1 billion in 2022. The Americas are expected to contribute some 57.2% of that 2022 total. In the decade ahead, specialist marketplaces for niche products and services will become the new department stores. As a commerce operator, marketplaces will help you offer more, sell more and learn more.
McFadyen’s marketplace solution can help you quickly deploy a robust marketplace with an increased catalog, better customer insights, and easy drop-shipping /fulfilment by third parties. If you would like to learn more about McFadyen’s marketplace solution, write to us at engage@mcfadyen.com or connect with us on Twitter @McFadyenDigital
Sources:
Core Research: the Boom in Marketplaces
McKinsey: Global Flows in a Digital Age
Shopify: Global Ecommerce Markets
