Are Online Marketplaces the Biggest Winner in this COVID-19 Pandemic?
The Pandemic has resulted in regulations around the world to mandate social distancing and closure of brick-and-mortar retail shops. This has resulted in an unprecedented sudden surge in consumer demand for eCommerce services as people seek alternative channels to buy much needed daily necessities. Online marketplaces appear to be the biggest beneficiary of this “new normal” as consumers seek to replace their regular weekend trips to the shopping malls with browsing stores online. But has that prediction won out?
Offline-to-Online Convergence
At the start of the various country lockdowns, most consumers were stocking up on essentials such as groceries and other household consumables. As those supplies became adequate, consumers slowly turned to online shopping for toys, games, entertainment, sporting goods, and consumer electronics. Adobe’s report also demonstrates that eCommerce purchases of wine, beer, spirits and related accessories were up to 74%.
In other words, consumer behaviour has changed. We are observing shopping malls experiencing a drastic decrease in footfall given that the demand for eCommerce is here to stay.
The Rise in Online Marketplaces
Given consumers changing demands which subsequently disrupt supply chains, businesses worldwide across various industries have to rethink the way they operate and are starting to look at online marketplaces as an effective and efficient response.
Online marketplaces serve to fill the void of physical stores and malls with its digitization capability and inherent ability to provide the ability for collective buying and selling. Consumers are able to discover goods in a commonplace while vendors are exposed to a large and expanding base of customers online. Hence, it is of no surprise when we start seeing various agnostic verticals stepping out of their industrial inertia to set up their own marketplace.
Here are some examples of industries that have seen the rise of online marketplaces during this COVID-19 pandemic.
Healthcare Industry
As the Personal Protection Equipment (PPE) and other safety product shortages continue, organizations have jumped in to create COVID healthcare-related online marketplaces that connect buyers and suppliers together.
The global pandemic translates to a rise in such marketplaces worldwide to meet the demands across countries. Companies are carefully curating products to ensure that they are not being sold at exorbitant prices, and finding reputable suppliers at the same time. Examples include Proudly SA (South Africa), Edge4Health (United Kingdom), and B2B Manitoba (Canada).
Governments have also taken the initiative to collaborate with relevant stakeholders to expand reserves of PPE. A case in point is Missouri’s Department of Economic Development establishing a partnership with the Missouri Hospital Association to launch a PPE Marketplace — a public/private initiative that matches companies that manufacture and sell PPE with Missouri companies that need to purchase PPE. Several countries like the UK also have official government websites dedicated to COVID-19, intended to expand the list of raw suppliers for their online marketplaces from other countries.
Education Industry
According to UNESCO, 91% of all students worldwide saw their schools closed, putting an unexpected spotlight on online learning. A surge in global online education coupled with remote working in response to COVID-19 have people turning to online learning to upskill, stay busy and increase productivity.
Udemy, a global marketplace for learning and teaching online revealed that they experienced a 425% increase in enrollments for consumers, 55% increase in course creation by instructors and 80% increase in usage from businesses and governments. Similarly, Coursera is aiming to take the marketplace away from traditional learning and focus on offering micro certifications rather than “macro” degrees, as a potential way for people to distinguish themselves in the near future.
The accelerated trend in this educational space with learning made more equitable translates to more companies entering the educational arena to tap on its potential. Kahoot! recently announced Kahoot!Academy, a worldwide knowledge platform, community and marketplace for educators and publishers. This new knowledge platform will bring together educators worldwide to share and access high-quality learning content and other relevant resources.
Food and Beverage Industry
Before COVID-19, The Food Marketing Institute and Nielson together estimate that 70% of consumers will buy at least some groceries online in the next five to seven years. Fast forward now, already over half of the world’s retailers have begun to prepare to sell their goods online. Retailers are also enhancing their platform infrastructure and re-defining their product strategy, turning the crisis into an opportunity to increase market share.
In South Korea, super chain E-Mart is seeking to eradicate pain points and entice new shoppers to their stores, ensuring their offering is seamlessly omnichannel, through the establishment of a new marketplace platform encompassing its many grocery formats. In North America, Albertsons has further developed its own grocery marketplace by delivering an easy digital onboarding experience for third-party sellers and a new platform giving fast access to the grocer’s large customer base.
To empower local F&B operators, the Singapore government has revealed to provide hawkers and smaller eateries a more affordable option of going online through the partnership with FairPrice Group and food delivery start-up WhyQ. The new digital food delivery platform called Marketplace @ WhyQ enables F&B operators to deliver their food island-wide while charging them zero commission.
Travel Industry
It is no doubt that the travel industry is the one hardest hit by the Pandemic. However, online marketplaces are seen to play an important role in their road to recovery.
Online marketplaces have been created to appeal for travel agents to sign up and contribute with their specialist destination knowledge. This throws a lifeline to agents struggling to generate leads, giving them access to a global audience of online customers. TRVL.com already has 5000 agents globally who are using the platform to book hotels through suppliers like Expedia, Bedsonline, Booking and Priceline.
The industry is also starting to adapt their business models to tide through the short run and become more sustainable in the future. In the Philippines, MAD Travel has started the MAD Market, an online marketplace that sources from local farmers and SMEs, while delivering fresh produce to doorsteps across Metro Manila. Though it is an evident business shift, it still maintains the company’s value proposition of bridging farmers and communities together — through online delivery market instead of tourism. Co-founder Rafael Dionisio has shared that MAD Market will still be on-going even when travel bounces back, “serving as another channel to pump up village economies and engage even more tribes and communities”.
Strategic Partnerships
With the consumer shift towards online behaviour, organizations are also beginning to secure collaborations with online marketplace providers to gain a bigger pie of the eCommerce market.
FaceBook launched Shops earlier in May to allow businesses to display and sell their products but the partnership with Gojek allows Facebook to better ingratiate within the Southeast Asian economy, connecting more people and maximizing its own evolving eCommerce offer. In parallel, Walmart is partnering with Shopify to expand its online marketplace business and cash in on the corona-virus driven jump in online shopping. The partnership focuses on adding small and medium-sized US businesses to its platform.
So, are online marketplaces the biggest winner in this COVID-19 Pandemic?
The value of online marketplaces is definitely not being challenged by COVID-19. Not only are they platforms that facilitate the trend towards digital transformation, but they help businesses’ reduce the upfront investment needed to scale with its low entry cost, and facilitate consumer convenience.
Online marketplaces are thus rapidly becoming the powerhouse behind the new norm that is transitioning towards eCommerce, and are indeed the biggest winner in this COVID-19 pandemic.
About The Author:
Ranise Teo is part of the Business Development and Marketing Team at Arcadier, a SaaS company that powers next-generation marketplace ideas. You can follow Arcadier on LinkedIn, Facebook, and Twitter for more news and updates.
Learn More About Arcadier: arcadier.com
