Global marketplaces may own 40% of online retail in 2020

Retailers seem to be very confident regarding the rise of marketplaces and they do not expect to encounter any major problems in this regard. However, these ecommerce platforms do have their downsides for traditional retailers and brands, according to the ‘Rise of the Global Market Places report issued by Ecommerce Foundation

Presently, the percentage for marketplaces yield is between 10% and 30%, depending on the country, and retailers generally see their own company grow over this period as well. Retailers seem quite positive about the impact of market places. For instance, they are only slightly worried about the impact of Alibaba and Amazon, while they are more positive about companies such as Apple, Google and Facebook.

In addition, retailers tend to overestimate their performance in comparison with global market places. They consider themselves to be stronger in almost every field, and especially at customer-facing processes, with IT development and big data being the only fields in which market places are believed to be slightly better.

Still, the impact of marketplaces also has its negative sides. First of all, they are not cheap to work with. As mentioned before, price is an important pillar for ecommerce platforms and, in order to keep their prices as low as possible, among other things, market places try to take as much margin from their suppliers as possible.

Consultants believe that retailers lack the skills and leadership in order to properly deal with the rise of global market places. As a result, retailers respond too slowly and cautiously to these occurring changes. Retail may look very differently in 10 to 20 years, whereby a scenario where marketplaces are the dominant force is not at all unlikely. After all, marketplace are estimated to have a market share of nearly 40% and, according to a study among 12,000 consumers, consumers expect to buy 50% of their goods and/or services online in 2020. This would lead to a so-called “Platform Empire” scenario, in which retailers and brands will still exist, but may have lost up to 70% of their traditional market.

In total, 231 retailers and 43 retail consultants completed a questionnaire that Prof. Jory Abraham, Managing Director of the Ecommerce Foundation and  Prof. Kitty Koelemeijer of Nyenrode Business University, along with Ecommerce Europe, devised. The composition of this response group was quite mixed, with respondents from both online and offline selling companies, larger and smaller organizations and national and international players.