Exploring E-commerce Marketplace Platforms: Types Unveiled

HomeE-CommerceExploring E-commerce Marketplace Platforms: Types Unveiled

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Key Takeaways

Statista reports that global ecommerce sales will reach $6.5 trillion in 2023. This represents over 22% the total retail sales. This growth shows the importance of ecommerce marketplace platforms to the retail industry.

According to a study by eMarketer, the top five ecommerce marketplaces will account for 65% global online retail sales by 2021. This statistic highlights the dominance of existing platforms on the market and the competition that new marketplaces must face.

A survey conducted by BigCommerce found that 55% of consumers prefer shopping online on multi-vendor platforms because of the wide range of options and competitive prices. This consumer preference is what drives the evolution and diversification in e-commerce marketplaces.

The e-commerce landscape is diverse, encompassing various marketplace models like B2C (Business-to-Consumer), B2B (Business-to-Business), and C2C (Consumer-to-Consumer). Each model has its own operational strategy and caters to certain needs.

Marketplace platforms are being revolutionized by technological advances such as blockchain, AI and cloud computing. These technologies improve customer experiences, streamline operations, and enhance security.

Aren’t you glad we are no longer in the pandemic era? Now we just call it endemic. We coined it as a dark age since it greatly impacted every Industry. Most importantly, it almost crushed the eCommerce marketplace bringing down small businesses and entirely wiping out cottage industries. Surviving ones took the online marketplace as a resolute, others followed and soon we had a booming online eCommerce foundation.

Statistically, 2020 saw a 16% rise in overall global sales, which was pandemic inclined. Can you imagine how strong an impact COVID-19 must have had to boost project gains in a single year five times more than what five years combined couldn’t bring? 

With that, let’s get to know what an eCommerce marketplace truly means.

1. What is an Online eCommerce Marketplace?

Traditionally, a marketplace is where buyers and sellers meet intending to purchase and sell goods or services. Economically, it is the exchange of property rights but when talking about the eCommerce marketplace, it’s more buyer and seller oriented branching out into three main categories mentioned below: 

  • Business to Business (B2B)
  • Business to Consumer (B2C)
  • Consumer to Consumer (C2C)

Although it goes unsaid in most explanations, we also have a fourth type known as the customer-to-business marketplace. The reason is that it is not truly an eCommerce marketplace. Every defined eCommerce platform has a separate meaning, sells differentiated goods and services, and has advantages and drawbacks. 

Let’s learn about them in more detail!

1.1. Types of E-Commerce marketplace platforms

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1.1.1. B2B (Business To Business)

A business-to-business e-commerce marketplace or platform is where sellers do deals with other businesses or organizations instead of selling to regular customers directly.

According to recent studies, 80% of all B2B sales transactions take place through digital platforms or channels. Hence, we coined the term e-commerce to specifically define sector undertakings.

In today’s world, digital platforms are crucial because they automate and simplify many processes. However, there’s a downside. New tech is making traditional B2B and B2C businesses less important.

1.1.2. Example

  • Pillow company provides comfortable mattresses, sheets, and soft pillows to hospitality businesses.
  • A website localisation, optimisation, and building service provider.

These organisations come together when the pillow company needs a website built. They don’t directly deliver to customers, they might be customers by definition in this example but their major line of business deals only with other business organisations. 

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2. Types of B2B Platforms

2.1. Distributors

When you first read distributor, you must imagine a middleman working hard to sell all his wares! Surprisingly, you aren’t wrong. A distributor is like a middleman, but in B2B e-commerce, they help funnel sales to other businesses instead of selling directly to customers.

Having distributors can help your business by working with lots of other businesses. In the past, this was hard because it was tough to connect with many manufacturers at once. But online platforms and digital tech have made this easier by automating the distributor’s job.

When manufacturers see their profits and sales dropping, they often turn to distributors. They might not have a big network to find new customers, but they know a lot about what customers want. By keeping records, manufacturers help businesses connect and join the B2B market.

2.2. Wholesalers

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An organisation maintains two types of goods- Stock and supply. Stock is the original quantity bought in bulk or manufactured. Supply is a proportionate percentage of the given stock the wholesaler is willing to funnel into the eCommerce market. 

In B2B transactions, it’s common to buy lots of stuff at once because it’s easier, faster, and simpler to manage accounts that way.

Wholesale markets do well online because digital platforms can handle lots of different products between two businesses without needing lots of people. The more automatic business management becomes, the more productive organisations will be

2.3. Manufacturers

Unlike wholesalers and distributors, a manufacturer has complete control over who they sell finished goods. They like selling finished products directly to consumers since it guarantees a higher profit margin. But is profit margin the only thing in their sales target? For certain challenges like a lack of endogenous distributors in the manufacturing company, they rely on a B2B model.

Manufacturers are moving their sales platforms online to keep buying going without any interruptions and handle online sales. Digital buying has good stuff like getting updates on money right away, seeing how orders are going, and having a safe, private place to pay.

3. B2B2C (Business To Business To Customer)

Have you ever heard of the term middleman? A middleman is not sufficient but often necessary when customers and wholesalers or manufacturers cannot directly connect. The gap in their line of communication is automatically filled by another business organisation.

In a B2B2C e-commerce marketplace, we cut out the middleman by creating direct communication between wholesalers and customers. Wholesalers can talk straight to customers on a website. Some advanced B2B2C companies also have apps to make online shopping even easier.

3.1. B2C (Business To Customer)

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A B2C or business-to-customer marketplace is the most commonly established eCommerce platform. We use social media and other places through the Internet to either connect or avail products and services. Connecting for the sole purpose of making purchases is the key motive of a B2C marketplace.

3.2. Example

  • A food outlet providing home delivery services allows their customers to make online orders from an E menu.
  • Online shopping via mobile applications, websites, or social media applications.

Both these business types allow customers to make a purchase online. Customers directly buy from the website or mobile app.

4. Why sell in B2C?

4.1. Market to target audience

If you are yet to analyse your target audience, this is your calling! Let’s give you some spoilers- most of them are present online. And that is where you are supposed to be selling.

Your business would initially face challenges like generating organic traffic. But once you begin the search engine optimisation and setting up of your eCommerce platform process, it goes only uphill from here. Selling in a B2C market without the assistance of online platforms means missing out on a major chunk of your target audience base.

4.2. Preference towards online shopping

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Going back to the pandemic, more people turned to online shopping when stores closed. Some small businesses couldn’t make it because they didn’t have enough money or help to set up online shops for them.

We have a solution for you. Don’t take up learning digital marketing from scratch, connect with professionals with a simple Google search or social media platforms. An online marketplace allows businesses to seek professional services exogenously. Your preference for online marketing shows how diverse and readily available a digital platform is. Similarly, consumers’ desire to shop online is also because of the wide variety they can window shop before making final purchases. Besides the key requirement, consumers also love the flexibility in wish listing items, adding them to a cart, applying online coupons or vouchers, and so forth. 

4.3. Brand awareness

Brand awareness, also called brand loyalty and goodwill, helps customers trust a business, especially if it’s new in the industry. An online marketplace can help build this trust so customers feel confident buying from you and keep coming back.

4.4. Importance of B2B and B2C websites

To survive in the eCommerce platform competition, strengthen your website with SEO strategies, revamped web pages, and a mobile app focused on user engagement experience. A website for B2B and B2C is important because:

  • Helps reinforce search engine optimisation strategies and appears in Google search Oregon product listings
  • Allows online campaigning
  • Continue recommending relevant products to loyal customers, and expand the customer base furthermore
  • Helps with organisation scalability and reaches new marketing targets and goals.

5. C2C (Customer To Customer)

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Customer-to-customer or person-to-person marketing does not involve an official business structure. They function without a management team or sales and brand awareness incentive. When a person makes a one-time purchase from another individual online, we call it C2C marketing. When such transactions take place digitally it is an eCommerce marketplace.

If you have ever bought second-hand products online from eBay, Flipkart, or OLX, you have participated in C2C eCommerce.

6. Conclusion

In today’s digital age, the importance of robust eCommerce websites cannot be overstated. Websites are crucial for eCommerce success, providing tools like search engine optimization, online ads, and personalized suggestions to shoppers. Investing in these platforms helps businesses grow online, become more well-known, and keep customers coming back. eCommerce is always changing because of new tech, how people shop, and what’s popular. By using eCommerce platforms, businesses can find new chances, reach more customers, and do well in the global market.

The world of eCommerce is vast and dynamic, offering endless possibilities for businesses of all sizes and industries. To thrive in this ever-changing landscape, businesses must embrace digital platforms, understand their target audiences, and adopt innovative strategies to stay ahead of the competition. As technology continues to evolve, the eCommerce marketplace will only grow stronger, presenting exciting opportunities for businesses to flourish and succeed on a global scale. So, let’s seize the potential of eCommerce and build a thriving future for businesses in the digital realm.

Get in touch with us at EMB to know more.

FAQs

Q. What are the main types of E-commerce Marketplace Platforms?

There are three primary types: B2B (Business-to-Business), B2C (Business-to-Consumer), and C2C (Consumer-to-Consumer). Each serves unique market dynamics and user interactions.

Q. What differentiates B2B from B2C E-commerce Platforms?

B2B platforms cater to wholesale and bulk transactions between businesses, while B2C platforms focus on retail sales to individual consumers. B2B often involves negotiated pricing and complex order processing.

Q. How does a C2C Marketplace Platform work?

C2C platforms enable consumers to buy and sell directly to other consumers. Individuals list products, and interested buyers interact to negotiate prices and complete transactions. Examples include online classifieds and auction sites.

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Team EMB
Team EMB
We are Team EMB the voice behind this insightful blog.

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