Are Marketplaces Right for Your Business?

Are Marketplaces Right for Your Business?

The emergence of prominent marketplaces in Asia Pacific (APAC) has made them a key feature in the regional eCommerce landscape. While the marketplace seems to promise easy revenue growth at low operational costs, retailers need to weigh the costs and benefits of selling on the platform. This article gives an overview of the marketplaces in APAC’s eCommerce landscape and highlights some key factors for consideration before launching on a marketplace. An Overview of Asia Pacific’s Marketplaces   As the world’s leading eCommerce market with an estimated USD $1.5 trillion in B2C sales in 2014[1], APAC is home to many rapidly growing online marketplaces. The prevalence of marketplaces can also be attributed to online customers’ increasing openness to shopping on multiple platforms. Marketplaces’ wide-ranging offerings across different brands and product categories also help attract and retain consumers who are looking for more variety. With a wide customer reach, these selling platforms have proved appealing to retailers looking to explore more revenue channels and gain greater exposure in foreign markets. Marketplaces are also innovating regularly to allow customers to connect with brands at various touch points. On some of the most popular marketplace sites in APAC, up to 50% of customer traffic comes from mobile devices[2], with a significant proportion of sales derived from mobile applications[3]. In fact, marketplaces such as Zalora are preparing for a ‘mobile-only’ market by opening shopping channels on chat apps like Line or Viber[4]. Others are leveraging social commerce initiatives to widen customer reach – Alibaba’s social media channel, Weitao, offers customers easy buying options directly from Tmall or Taobao stores[5]. While global marketplaces continue to...