Customer Focus

Why marketplaces are essential to a retailer’s international strategy

According to a report from Accenture and AliResearch, global cross-border ecommerce is set to reach as much as $1 trillion in 2020. In addition, data has shown that globally 63% of frequent cross-border buyers shop internationally at least once a month. Global expansion should therefore be a priority for all retailers, no matter their size.

For many, online marketplaces are becoming an essential component of a wider strategic international plan, due to high local penetration, mature channel infrastructure and the deep understanding of their customers’ needs. The likes of high street apparel retailers, Topshop is successfully selling to the Chinese market through TMall classic, while Mountain Warehouse has extended its reach by opening a store on TMall Global.

You can find a Missguided outlet on Indian marketplace Jabong, Dune footwear on French fashion site La Redoute, Bvlgari handbags on luxury Chinese marketplace Xiu.com, New Look selling to Malaysian customers on Zalora, Nike on the German fashion outlet Zalando, Dyson on eBay, EuroCarParts on Amazon and Acer on leading Latin American ecommerce platform, MercadoLibre.

Marketplaces are serious channels, for serious retailers who are looking to grow their global footprint. So what makes marketplaces an attractive sales outlet?

Popularity

Marketplaces dominate the ecommerce landscape across the globe. Not only are the likes of eBay and Amazon the most popular online sites in both the UK and USA, but local marketplaces such as TMall in China and Allegro in Poland have such a strong association with ecommerce for local consumers (1), that more than 76% of online shoppers would choose to shop on these platforms ahead of any other.

Local knowledge

Entering into a new market can present a multitude of obstacles, but online marketplaces are able to help retailers tailor their local offering to the tastes and preferences of local consumers. This can range from selecting the right products, making the most of promotions around local cultural or religious events, tailoring payment methods and delivery choices (for example including cash-on-delivery and try-before-you-buy options), understanding the price point for the local consumer and developing marketing campaigns that encourage high sales conversions.

Brand visibility

Building global brand awareness and visibility is key to any retailer’s success, and while it is still important to invest in tools, campaigns and agencies to help build brand visibility in a new market, marketplaces enhance your brand awareness through deals programmes, bespoke email campaigns and home page takeovers. By tapping into the built in marketing resources of these online channels, retailers are able to get their brand in front of millions of primed online shoppers raising their profile in market.

Set-up and go

Rather than investing time, money and resources into a new market, only to find that products aren’t suitable or consumers are not engaged with your brand, marketplaces take away the pains of understanding and meeting local consumer expectations, without need for heavy investment. This enables retailers to set-up quickly, test new markets, and tailor their proposition without worrying about the need to invest in local language customer support, mobile responsive stores, same day delivery couriers and new payment technology – since marketplaces are already set-up to best service the local consumer.

Convenience

Online marketplaces have fully integrated IT, stock management and reporting systems that retailers can leverage when selling in a new market. This data can be used to further develop local propositions and manage the allocation of stock, without the need to invest in additional bespoke software.

Jenni Day is senior marketing manager at We Are Pentagon. It operates leading online marketplace conference Retail Without Borders, which takes place on March 23 at the QEII Centre, London. There will be speakers from eBay, Rakuten, Alibaba, Myntra, Fyndiq, La Redoute, Priceminister, Linio and many more.

You can find out more about Retail Without Borders and book your place by visiting the conference website.

(1) E-Commerce in Poland 2014” report. Provided by Gemius for e-Commerce Polska”. “List up to three online shopping sites which come to your mind as first.”

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