While COVID-19 has challenges businesses, online marketplaces have enjoyed success through their ability to adapt, argues Mac Wang, head of ANZ at Stripe in this piece.
As bricks & mortar stores across the country close their doors – some permanently – ecommerce has never been more important.
The ecommerce opportunity is ripe, 45 per cent of online shoppers globally say they plan to spend more time shopping online after the pandemic is over. Online marketplace searches in particular, have increased by 46 percent year on year, with search data showing that 84 per cent more Australians are Googling marketplaces from January to July 2020.
The online marketplace industry is revealing itself to be an opportunity for businesses like Red Balloon, Deliveroo and Airtasker to empower and support the sole trader and small business community at a time when it’s needed most.
It’s all about adaptation:
On March 11, the World Health Organisation announced a global pandemic and marketplaces saw sales and traffic plummet. Red Balloon, the online experiential marketplace for example, saw daily traffic go from 85,000 to 8,000.
Reimagination and adaptation have become the key drivers of enabling marketplaces to become resilient throughout COVID-19. Red Balloon adapted itself by launching Experiences At Home, which allowed its vendors to tap into audiences across the globe, through the power of technology and the ability to enjoy the experience from the comfort of home.
Online marketplaces which were traditionally catering for a localised audience, have now opened up a global economy through the benefit of staying at home.
Investing local to go global:
Two sided marketplaces rely on social networks: the success of the marketplace is only as successful as the growth of its social network. With this kind of marketplace, the product is not the software you build – it’s access to the network you’ve created. However when it comes to expanding globally, there are plenty of local considerations you need to think about. Marketplaces like Uber, Airbnb, Deliveroo and Airtasker who have their operations run part online, part in the real world, understand the importance of local payment methods, local customs and local customers before simply moving to a new market. The secret to successful global expansion for online marketplaces is having a playbook for repeatedly starting from scratch each time, city-by-city. This way, you have a ‘go to guide’ to creating an effective marketplace in thousands of locations all over the world. What’s important to consider, is the playbook is just a foundation for your business. Local laws, regulations, traditions and operations will all vary, meaning your marketplace cannot be a cut and paste. It has to align to local consumer needs.
The (COVID-19) seller market:
Ensuring you have engaged sellers on your platform is going to be more important than ever for marketplace revenue.
As such, marketplaces have a renewed need and responsibility to create additional value for sellers, that will ultimately increase their desire to stay with that marketplace. As the state of the economy continues to hang in the balance, marketplaces need to be prioritising ways to continue to generate revenue, through innovation. Deliveroo for example, developed a relief package for its restaurants given they were losing out on dine in customer revenue.
They also had menu curators go into select restaurants and identify ways chefs could expand their menu, to serve a broader range of customer tastes and earn additional revenue that way. It’s these small yet significant strides that marketplaces need to take to retain the volatile seller market.
