The Rise of Marketplaces and Its Impact on the Future of eCommerce

When online marketplaces emerged around two decades ago, they mainly focused on retail and goods. Horizontal marketplaces that sell a wide range of goods — examples being eBay, Amazon, and Rakuten — dominated the era. However, in the last 5 years, the world saw a revival and accelerated growth of online marketplaces.

Unlike their predecessors, these new generation of marketplaces are more industry specific or local. They include Uber, Grab and Airbnb, which disrupted traditional modes of transport and accommodation. Retail marketplaces like Lazada and Tokopedia also rose to prominence to solve a particular pain-point for specific regions.

On November 25, 2016, Arcadier’s Chief Commercial Officer, Kenneth Low, was invited by the organizers of SITEX, Singapore’s most established lifestyle consumer IT exhibition, to discuss the phenomenon. Here are the highlights of the interview:

Kenneth Low at the 16th APICTA awards in Taipei, Taiwan.

What exactly is a marketplace?

What has caused the current wave of disruption?

Really, the winners in this game are the search engines and social networks that profit from merchants spending on Search Engine Marketing, Search Engine Optimization, and advertising.

The proliferation of mobile devices is also a huge factor. Consumers want to locate what they need instantly and conveniently. It’s projected that mobile Commerce will account for 50% of all eCommerce spending by 2018. This has resulted in a need to re-address the market, creating clear verticals by industry and also more local items for sale, enabling a consumer to search specifically for an item or service when they need it.

So where is eCommerce heading?

We have also seen the emergence of peer-to-peer marketplace, which brings people together and encourages community sharing and the use of underutilized assets for environmental sustainability. They succeed because they are more accessible to those who need it and they serve the community better.

The benefits of the new era of marketplaces. Photo credit: Arcadier.

Will online marketplaces be purely for profit generation?

However, the cost of building an online marketplace is high, preventing many of these traditional models to benefit from the efficiency online marketplaces provide, allowing only big companies to be able to invest and build them. The ability to enable digitization of less for-profit, utility marketplaces will also drive the greater good of humanity, using less global resources (people, building materials, paper, electricity) to set up physical stores, yet allow the same facilitation of driving a perfect economy of discovery and trade or peer-to-peer exchange.

So what is needed in the new era of eCommerce?

We need to support entrepreneurs who aspire to be the “Uber for X” and enable communities who just need the technology as a utility, for instance to support a charity fair, a trade show, or conference. This is where Arcadier comes in. We have created the world’s first proprietary marketplace platform, giving an opportunity for those who want to build a marketplace by removing the hefty cost and the need for technical knowledge.

Supporting the new generation of marketplaces. Photo credit: Arcadier.

About the writer: Clarissa Santoso is a Marketing Communications Specialist at Arcadier, a SaaS company that powers next generation marketplace ideas. You can follow Arcadier on Twitter, Facebook, and LinkedIn for the latest insights on the sharing economy.

Learn More About Arcadier:

Arcadier Marketplace technology enables individuals and organizations to develop their marketplace easily. Learn More.

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