In a recent InternetRetailing webinar, How to succeed in high growth emerging economies through regional marketplaces, we heard from Jon Kapplow, senior vice president consumer and merchant solutions at Pitney Bowes. Here’s a bulletpoint overview of his presentation.
The global marketplace opportunity
• Global cross-border ecommerce expected to reach $1 trillion by 2020.
• Online marketplaces will own nearly 40% of the global ecommerce market: already 85% of Chinese ecommerce transactions and 83% of Indian marketplaces now via a marketplace.
Jon Kapplow: “A lot of US retailers are fearful of Amazon, and Amazon’s share is nowhere near what marketplaces have in these countries”.
• Marketplaces are about meeting customers where they are: “they open retailers up to an entirely new stream of consumers”. Kapplow added: “These consumers are locals, so if you want to be global you need to get in this game.”
• Wide choice of markets: Factors in the choice of where to see include the geographical market being targeted, and what type of items retailers are selling. Tmall started out in mother and baby equipment and moved out from there, while JD.com started with technology. But, says Kapplow: “If a marketplace isn’t known for your category right now but they want to be bigger in that category, it’s something to think about.”
POLL: What does the Chinese pronunciation of Tmall mean: Crocodile [0%), Sky Cat [27%], Terrific Shopping [32%] Abundance [41%].
(The right answer was Sky Cat.)
• Where do you want to be: questions to ask include do you have brand awareness, do you need a legal business presence in that country, weigh balance between your business interests and the policies of the marketplace.
• Logistics model: are you selling across borders or in country, do you want to locate inventory locally, have true marketplace or wholesale delivery approaches?
• Technical considerations: data feeds, managing marketplace-specific attributes.
• Payment considerations: marketplace payment solutions may require having currency banked in that country, settlement terms.
• Managing the investment: fees vary from marketplace to marketplace, but by and large, it’s a share of revenue. Other costs include development, translation. In-country support and customer service should both be priorities. Language, time zones, tools all differ. “If you’re not providing enough customer support you might as well forget it – it’s that important.” Think about how search works.
• How do consumers shop: search is important, as is the shopper experience. “Not all marketplaces have store fronts, some are just listings. Some have a vast range of items, others are more curated assortments.”
POLL: How many countries does Lazada support? 2 [0%], 3 [ 24%], 5 [48 %], 6 [29%].
(The answer was six).
• The Pitney Bowes experience: case study examples of marketplace approaches, both via the Pitney Bowes Borderfree store, and a bespoke store built for US retailer Saks. [with images]
• Maximising your assortment: some retailers put up an assortment of goods on marketplaces, others use an API to sell the long tail as well.
• Introduction to the Pitney Bowes Complete Marketplace Solution – end-to-end from demand to delivery. Already launched on marketplaces including Tmall and likely to be on Rakuten soon. Two or three marketplaces a year set to be added for the next few years. Covers areas from business development, legal aspects, to technology, storefront management, marketing and customer care.
Jon Kapplow: “Previously we had offered this solution only to US-based retailers and I’m happy to say we are now ready to start talking with UK retailers. We have our solution we’ll be launching to the UK in Q2 of this year. This was a timely webinar to share with you some of our thoughts and where we’re going.”
• Takeaways: Spend time to know the marketplace; do your homework and weigh requirements against priorities; invest in the right resources.
The webinar was followed by a Q&A session, in which Jon was joined by two Pitney Bowes colleagues: Sarah Ward director of marketplace development and Arisa Kuo, director of marketplace and global marketing. To see the webinar and the Q&A session in full, visit the PitneyBowes webinar page here.
