The global pandemic helped to turn our lives into a digital world much faster. The growth of digital marketplaces escalated immediately. Digital marketplaces help drive ecommerce. The data marketplace concept is also getting more and more popular among companies as they see the huge benefits and opportunities that these types of marketplaces provide.
According to a McKinsey & Company report, before the pandemic, the top 100 online marketplaces made up half of the global sales with $2 trillion. And Statista reports that by 2024, ecommerce will account for more than $6 US billion dollars in sales.
The definition of the digital marketplace
Digital marketplaces are online platforms that provide a safe virtual environment for both buyers and sellers, offering their services or products. Thanks to digital marketplaces, buyers are able to quickly and easily find the needed people who provide products meeting their budget and requirements.
It takes several years for digital marketplaces to build up their reputation. Key aspects in building a successful marketplace include having a clear strategy, vision, and the right buyers or sellers.
Types and examples of digital marketplaces
The number of digital marketplaces will only grow, and the demand for such platforms will increase over the next few years. The marketplace business, serving customer-centric goals, is complex. However, it offers numerous opportunities for both buyers and sellers. Here are different types of marketplaces and the markets they serve:
- Business-to-consumer (B2C) marketplaces. This is considered to be one of the most saturated categories with huge competition. Great examples of B2C marketplaces include the ecommerce giant Amazon. There are also many niche B2C marketplaces, which are focused on certain categories like electronics, apparel, and home improvement.
- Business-to-business (B2B) marketplaces. B2B marketplaces offer sheer monetary potential and are more niche as well as vertical industry-focused. The most famous examples of B2B marketplaces include Alibaba and Amazon Business.
- Peer-to-peer (P2P) or consumer-to-consumer (C2C) marketplaces. Marketplaces like eBay, TaoBao, Etsy, and Airbnb have a unique feature — consumers here are both sellers and buyers.
- Consumer-to-manufacturer (C2M) or consumer-to-business (C2B) marketplaces. The biggest example of such a marketplace is PinDuoDuo. In just a few years, the C2M model has gained a 4% share of the global ecommerce business and is projected to expand beyond China.
- Service-to-consumer (Se2C) marketplaces. This is a growth category with numerous local examples like HomeAdvisor in the United States, UrbanClap in India, and hipages in Australia.
There are also data marketplaces with an online transactional architecture. These facilitate data sharing and enable data monetization. Data marketplaces leverage relevant data and offer several kinds of data to reveal new revenue opportunities and save valuable company resources.
Any organization can build this type of marketplace using various data products, including queries, reports, data services, APIs, ML models, and more.
Opportunities that digital marketplaces provide
Many successful marketplaces offer a wide variety of advantages and opportunities for users. The main benefits of digital marketplaces include:
Access to advanced analytics. Using sophisticated analytics to analyze the competition and adjust marketing campaigns, pricing, and offers is very useful. Data allows you to drive certain product lines, optimize business processes, ramp up manufacturing, and improve operations. By doing so you can meet demand and gain more profit and better outcomes.
Personalization. Digital marketplaces offer advanced AI-based technologies and tools to personalize the customer experience and better engage with clients. Through most of the marketplaces available, sellers can build long-term one-on-one relationships with their buyers.
Post-sales support. This is an important aspect of the overall customer experience. And as marketplaces are focused on customer experience and satisfaction, they provide the needed tools for post-sales support. This helps sellers build long-term customer relationships and develop lifelong fans. And this all is managed by the marketplace operator.
Global reach. Digital marketplaces allow their users to reach international sellers, buyers, and partners. In a global economy, businesses can have a huge reach with global marketplaces, providing services and products to people that wouldn’t be able to reach through local marketplaces. This helps to boost revenue and get much more opportunities than with local marketplaces.
Marketplaces, specifically data marketplaces, involve data monetization, allowing businesses to generate economic value from their target organizations.
Not all types of marketplaces offer all these advantages, but still knowing these may help potential sellers or buyers when they’re considering using a digital marketplace. It’s also worth mentioning that each type of marketplace has its unique challenges regarding payments, financing, logistics, and fulfillment needs.
Digital marketplaces will grow even more throughout the years. And as data gets more used by various businesses, demand for data marketplaces in the data economy will increase tremendously.
With all advantages and opportunities like personalization, global reach, and sophisticated analytics, digital marketplaces offer to their users, it’s safe to say that they will play a great role in the future of business.