B2B e-commerce has been steadily gaining traction since the 2000s. As the world gradually shifts online, a process greatly catalysed by Covid-19, the online marketplace in particular has emerged as a popular channel for e-commerce. In 2019, Deloitte reported that marketplace sales amount to 57% of total global online retail sales. With the tidal wave of digitalisation, this figure is bound to rocket, not just in retail but across multiple verticals.
To stand out from the crowd, all entrepreneurs work towards the same goal of rushing to be the first to launch an original and innovative idea. Doing so grants them the first-mover advantage, giving the company an upperhand in establishing brand equity. Despite this, it is crucial that businesses do not become overly eager to kickstart a business idea simply because it is avant garde. Without thorough analysis, the premature launch of an infeasible idea could drain the company’s scarce resources and place the startup in financial jeopardy.
Regardless, an innovative and viable business idea serves as the cornerstone of any startup and we have prepared this article in hopes of inspiring entrepreneurs looking to set up their own marketplace.
- Food Waste Marketplace
Every year, losses amounting to $750 billion are incurred worldwide due to food wastage. Evidently, food waste is still a problem that is pervasive in many nations, in both developed and developing countries. The environmental impacts of food wastage should not be undermined. To put things into perspective, food waste as a country would rank third after the US and China in terms of the impact on global warming.
To tackle this problem, food waste marketplace Karma has offered a solution to wholesalers, restaurants and grocery stores who deal with food wastage on a regular basis. Businesses with excess food inventories would be able to upload their products on the marketplace for sale. Karma comes in and takes care of the marketing and selling process and businesses benefit by transforming food wastage losses into an additional stream of revenue. On the other hand, consumers also benefit by purchasing food at a discount while reducing waste. As consumers become more environmentally conscious, food waste marketplaces may serve as a great and affordable alternative to the usual eateries.
2. Babysitting Marketplace
The lack of affordable and reliable childcare services in the US has taken a toll on household finances and on the careers prospects of caregivers, particularly women. Reports have shown that on average, infant child care services can reach up to $11,000 annually. To make matters worse, only 1 out of 6 eligible families actually receive subsidies.
To address the mismatch in demand and supply of affordable childcare services, babysitting marketplaces have emerged to provide consumers with more cost-efficient alternatives. Established babysitting marketplaces such as HireSitter, Bubble and Kinly pride themselves on providing trustworthy caregivers at reasonable prices. Furthermore, filters on the app enable parents to easily find a qualified caregiver within the same vicinity.
Particularly as Covid-19 has disrupted the lives of many, particularly essential workers, the need for reliable childcare services becomes even more salient. Startups such as US-based Helpr and Komae provide on-demand childcare, targeting parents’ caregiving needs which have become more prominent in a pandemic affected world.
3. Private Caregiving Marketplace
As nations struggle with declining birth rates and increasing life spans, many witness the phenomenon of population ageing. According to the UN, the number of seniors aged 60 in 2017 amounted to over 962 million, a figure that has doubled from that in 1980. As populations worldwide continue to age, this demand for professional caregiving services is likely to surge in the near future and there lies the need for consumers to have access to affordable and reliable caregiving services for their loved ones.
With an average life expectancy of 83 years, Singapore is one of the most rapidly ageing populations worldwide. To meet the healthcare and caregiving needs of these seniors, Singapore-based Homage has created a marketplace to connect families with professional caregivers. Providing a range of services from medical care, nursing, therapy and even medical services from on-call doctors, it has established itself as a key provider of caregiving services for the elderly. The platform attracts professional nurses, doctors, therapists and caregivers who are able to deliver on-demand caregiving services whenever required. Recently, they have raised $1.2 million in a seed funding round from US-based 500Startups, Golden Gate Ventures and Seedplus.
4. Laundry-as-a-Service Marketplace
Marketplaces offering drycleaning services have also emerged in recent years. To offer consumers with greater convenience, these marketplaces provide pick-up and drop-off services such that consumers would have access to laundry services without needing to step out of their homes. These marketplaces connect consumers with various laundromats and dry cleaning providers, allowing consumers to access competitive prices.
While marketplaces in this vertical have achieved success, with names such as FlyCleaners, ByNext and Rinse becoming widely known in the US, there are also marketplaces such as Washio whose operations have ceased. We can scrutinise both successful and failed marketplaces to glean deeper insights into this niche.
While Washio performed adequately initially, they were unable to maintain the quality of services as the business expanded. Furthermore, they lagged behind their competitors, failing to bring the business up to speed in terms of scalability. Coupled with internal struggles and employee dissatisfaction, these factors led to the downfall of Washio as they were unable to compete with rivals, FlyCleaners, Cleanly and Rinse who had a stronger grip on the market.
5. Housekeeping-as-a-Service Marketplace
Particularly in developed nations, demand for ad-hoc household keeping services is strong. Household keeping services include general cleaning, simple repair and maintenance works, painting and even gardening. As developing nations such as China and India continue to prosper, consumers evidently enjoy higher disposable income which could lead to the outsourcing of tedious and mundane domestic tasks.
Marketplaces such as Singapore-based Kaodim and India-based UrbanClap and Helpr are quick to exploit this demand for cleaning services. However, it is important to note that consumer behaviour has altered over the course of the pandemic. Consumers may be less prone to having strangers in their home due to the risk of transmission. In such a time, these businesses would need to assure consumers that proper precautionary measures have been undertaken to maintain a high standard of hygiene and safety. Alternatively, these businesses could offer deep-cleaning services to consumers who have been exposed or to customers who require sterile environments due to health conditions and more. Market and environmental conditions are subject to constant change and marketplace owners have to be well-equipped to adapt to these new changes in order to remain relevant.
6. Grocery Marketplace
When Covid-19 spiraled out of control and infection rates were rocketing, online grocery platforms were inundated with orders from anxious consumers who wanted to secure weekly necessities without having to leave the safety of their homes. Now, despite the easing of lockdown restrictions, consumer shopping behaviours have not reverted. Analysts predict that the online grocery market size is projected to hit a valuation of USD$130 billion by 2025, a figure that has ballooned due to the pandemic. This signals that online shopping has become a norm and entrepreneurs should adapt according to these new trends in order to remain competitive.
Amongst the various grocery marketplaces, US providers such as Amazon Fresh, Walmart Grocery and Instacart thrived during the pandemic. With strong brand equities established, consumers flocked to these trustworthy providers for reliable and speedy delivery services. However, as demand for online shopping services continues to soar, smaller providers such as farmers’ markets may be able to differentiate themselves by offering fresh, locally-grown produce to consumers. Marketplaces who are able to establish strong supply networks with local farmers may be able to create new value for consumers who have indicated demand for fresh produce.
Are you able to spot any similarities across these marketplace ideas? Notably, most of these marketplace ideas revolve around the daily activities of the consumer, from grocery shopping, laundry services and childcare services. All of the aforementioned activities are highly repetitive in nature. Should the marketplace be successful in delivering enough value to the consumer, this will greatly ease his daily routine. Over time, the convenience and value brought to consumers will breed marketplace dependence and raise utilisation of the platform.
The marketplace is indeed a lucrative business model if executed well, offering a steady and recurring stream of revenue. That said, the success of the marketplace is very much dependent on the ability of entrepreneurs to identify gaps in the market and to deliver enough value to consumers and businesses alike. Rather than rushing to be the first to move, it may be more worthwhile to divert efforts towards creating top-notch solutions that will render the first-mover advantage obsolete.
Anthea Yeo is with the Business Development team at Arcadier, a SaaS company that powers next generation marketplace ideas. You can follow Arcadier on Twitter, Facebook and LinkedIn for more news and updates.