Online marketplaces are here to stay!Posted: May 3, 2014
By Saatvik Sethi, Project Lead & Head – Content @ Solveda eCommerce Labs , Solveda Software
This article was previously published in Retail Today in November 2012
Every Wednesday, a plethora of vendors with bright and shiny makeshift stalls converge at a street near my house. The street gets transformed into a busy bazaar packed with people, mostly ladies, who leave no stone unturned to extract the best price from vendors. Groceries, household items, garments, shoes, toys, ice cream—everything under the sun is for sale. Can this idea of collective selling by vendors to a community, succeed online?
A SIMPLISTIC MODEL
How does a market place work? Gather vendors with a commodity or a service to sell, organise a ‘space’ where they can set up shop, have a strategy to attract a community and voila! You have a market place. If you are the owner of such a space, you charge a fee from vendors for using the space. The vendors are happy to pay you as they are servicing a volume of customers. The customers, in turn, get to select the best product at the best price (the art of bargaining was perfected at such places). It is a sweet deal for all the stake holders.
In 1993-94, Pierre Omidyar, a French-born Iranian American software developer launched an online market place called AuctionWeb. The business model essentially was the same as the street market. The ‘space’ was a website, the vendor and the buyer was virtually anyone with an internet connection. Anything from broken printers (that was actually the first item sold) to luxury yachts were up for sale. AuctionWeb was later christened eBay. Over the years, eBay has grown to be the world’s largest online marketplace. It has a presence in 30 countries with 102.4 million active users (as of Q1 2012).
WEB OF MARKETPLACES
eBay set a precedent for the online world to embrace the market place model. Post the success of eBay, many ideas were introduced, which were wholly or partially based on similar lines. I came across some interesting market places that merit a mention:
Online learning through webcams is a sellable commodity at Powhow.com. A seller can create an online webcam teaching session exhibiting anything from guitar classes, make-up, and origami to cooking lessons. The sellers decide their own content, timing and price for the class. The buyers, who take classes, can choose from different categories such as art, beauty, crafting, cooking, and fitness depending on what they want to learn and pay to join the class.
A common problem faced by those visiting a new place is the availability of reliable local guides, who can deliver an enriching site-seeing experience. This is where Vayable.com comes in. It allows the guides and the travelers to connect online. The guides list their experience, fix the price, duration and content of the tour and travelers book a tour and pay online. The remarkable feature about Vayable.com is that it has incorporated the traditional flea market place setup where vendors and buyers actually meet in person and develop a business relationship outside the market space.
One for the taste buds
The recipe is simple. Take food products, build an online community around it, stir it up a little with blogs and stories around the food, and you get Foodzie. Started as an online venture by Emily Olson, Rob LaFave and Nik Bauman in 2009, it operates as an online market place for food products. Recently, Foodzie was acquired by Joyus, an online video sales platform The idea was to offer users an enriching experience of shopping for food products through video. Will Foodzie change the way we consume and shop for food? The odds are clearly in its flavor!
Compared to the west, e-commerce is relatively a new occurrence in India. However, the road ahead holds promise. Last month, Flipkart, India’s largest online store, registered two companies—Flipkart Market Place Pvt Ltd and Flipkart Payment Gateway Services Pvt Ltd. It is still not clear whether the market place will be launched as a new site or as an add-on feature to the existing site. In August 2012, Snapdeal launched its “Brand Store” and took the later route of adding it as a feature to its site. It has about 3,000 brands and is projected to reach 10,000 brands by the end of 2013.
Other active players in this space include Tradus, ShopClues and Craftsvilla, which have a substantial customer base in India.
THE ROAD AHEAD
Can online marketplaces recreate that old world charm of a local street marketplace and reach the global community? Certainly, in due course, with the right mix of ideas and innovation, online market places will be able to achieve this milestone.
Saatvik Sethi is a Project Lead and Business Solutions Manager (eCommerce) at Solveda Software, a leading eCommerce focused global system integrator. For more info on solutions and offerings from Solveda, please visit: http://www.solveda.com