Blog Fast White Cat
European Marketplaces: Specialization is Key to Continued Expansion
Karolina Obszyńska Mar 19. 2024
Marketplaces are integral to a retail e-commerce strategy. They offer a dynamic and relatively inexpensive way to drive revenue, while also mitigating supply chain risks and enhancing profitability. The biggest trend this year is the rise of specialized marketplaces in Europe.
In Western Europe, marketplace e-commerce as a share of retail e-commerce consistently increased between 2014 and 2022, from 35% to 42%. The share of third party (3P) merchant sales in total marketplace sales also consistently increased, from 23% in 2014 to 30% in 2022, according to Euromonitor.com
More customers shop on marketplaces than anywhere else online. Being part of a marketplace opens up retailers and brands to a new tranche of customers. 62% of Europe's 100 largest online retailers are marketplaces. The strengthening of their position is evidenced by data, 85% of web traffic goes to marketplaces, according to ChannelX European Marketplaces 2023 report. From Europe’s 24 leading platforms, 11 are pure marketplaces that only connect buyers and sellers and that offer none of their own products.
Of these, seven are generalist marketplaces, selling products across a wide range of categories. The remaining four are specialized, offering a wide range of products around specific verticals like fashion and consumer electronics. The remaining 13 of the 24 marketplaces are either mixed marketplaces which sell their own products along with those of third-parties and brands or retailer-run marketplaces.
The European e-commerce marketplace landscape has one distinctive feature - there is no single dominant player, however Amazon and eBay lead the market in some countries. There are 27 countries in the EU plus the UK, Switzerland, and Norway. This fragmentation comes from linguistic and cultural differences that shape the market. Most of the domestic marketplaces focus on just one country, or a small number of closely connected countries.
Amazon is the leading online marketplace, with one billion visits per month, eBay is the second largest online marketplace in Europe, but with only 37% of Amazon’s European traffic, the third is Allegro which attracted close to 185 million visits, according to Webretailer.com (data excludes traffic from the UK). Zalando, a German company, is the only large pan-European marketplace other than Amazon and eBay. More than half of European consumers shopped on Amazon, in Italy 75% of shops on this marketplace. In Germany Amazon accounts for up to 45% of ecommerce net value, according to eCommerce Germany.
The largest ecommerce market in Europe is the United Kingdom, with over 60 million online users, British consumers spend about 10% of the country’s total GDP on products from online channels. Ecommerce in the UK takes a significant 38% share of all retail revenue. There are many marketplaces in the UK, but Amazon is the leading marketplace in the country in terms of revenues, followed by Sainsburys, third place is taken by Tesco.com, according to Statista.
In Germany, the biggest economy and the third-biggest ecommerce market in Europe, Amazon.de is the undisputed number one, followed by Otto and Zalando in net sales. Together, the top three online stores represent 40% of the top 100 stores in the German e-commerce market.
The Netherlands has played a pioneering role in the development of e-commerce. Even in its early stages in 2007, the country already featured over 5,000 online stores, as reported by Statista. This early adoption of online shopping contributed to the resilience of Dutch online retailers in the face of competition from foreign e-commerce giants. Established in 1999, bol.com is the largest domestic marketplace in both the Netherlands and Belgium. It is followed by Coolblue.nl, Ah.nl, Amazon.nl, and Jumbo.com. The top three online stores collectively account for 28.5% of the market share among the top 100 stores in the Dutch e-commerce market, according to data from ECDB.
As competition gets stronger, market advantage is determined by an ever increasing number of factors that make up the customer experience: fast delivery, reliable returns, and seamless customer support is crucial for all marketplaces.
From the point of view of third-party sellers the strength of delivery networks, and fulfillment options are as important as never before as a part of the marketplace back-end. The surge in preference for marketplace buying can be attributed to several key factors. Convenience, highly competitive pricing, a wide selection of products to choose from, and easy-to-manage delivery options have collectively fueled this trend. Fulfilment is an important physical touchpoint in e-commerce, and critical to customer satisfaction. Delivering orders to customers on time, within an expected timeframe, remains one of the most crucial ways for marketplaces to stand out from other e-commerce players. As a result, marketplaces continue to invest in logistics infrastructure and develop their fulfillment models to speed up delivery times, improve the consumer experience and drive cost efficiencies.
A key part of navigating the highly competitive marketplace are strategies geared towards increasing product visibility. There are several steps that are must haves like optimizing product listings, adding compelling descriptions, explanatory titles, keywords, high-quality images. Each product responds to a customer need, so it is important to present the benefits associated with its use, clearly and concisely showing how it solves problems through real-life examples or engaging storytelling
Never ending quest of enhancing the customer experience looms large for sellers. Today you have to go the extra mile to build positive relationships. One has to meet promised delivery times, ensure products arrive safely, respond promptly to inquiries, resolve issues quickly, ask customers for the feedback, encourage them to share reviews to build credibility, and influence buying decisions.
Last but not least, constantly analyze data, users behaviour, sales reports to understand trends, and quickly respond to market needs.
The biggest trend in marketplaces for 2024 is going to centre around specialisation. While the ecommerce market as a whole may be dominated by giant generalist marketplaces, ‘horizontal’ marketplaces rely on their sheer size to dominate all retail verticals, according to ChannelX European Marketplaces 2023 report. The trend towards retailer-operated marketplaces is gaining momentum, ushering in an era of industry-specific marketplaces. Vertical marketplaces provide the advantages of traditional marketplaces with a specialized selection of products.
Zalando finds success through targeted offerings, Etsy paves the way in handmade goods, ManoMano in DIY and home improvement. Others took different approaches and built its position locally like Bol.com in the Netherlands and Belgium, and Allegro in Poland. Carrefour offers a diverse range of conventional grocery products, allowing customers to meet their basic needs effortlessly. Additionally, the store has expanded its offerings to include unique, artisanal foods, presenting shoppers with the opportunity to explore new flavors and elevate their culinary experiences.
In Poland, the Vendora.pl project, owned by Credit Agricole EFL Leasing, exemplifies the vertical approach. Vendora.pl is a sales platform that provides top-notch equipment and financing solutions, catering to the needs of businesses.
Vendora.pl, a platform supporting corporate financing and streamlining the work of leasing consultants, offers a marketplace where consultants can sell leasing products without setting up their own shop. Entrepreneurs can conclude leasing agreements entirely online, benefiting from automatic credit decisions, online identity confirmation, and qualified electronic signatures. Our partner sought our services to create a marketplace integrated with EFL's online leasing platform. Prioritizing security and ensuring the highest standards of data protection were essential given our work in the banking sector. Ruben Pedrosa, Business Development Manager at Fast White Cat, explains that Magento's flexibility allowed them to customize modules to meet our partner's specific business requirements.
Fast White Cat also implemented a project in Slovenia, creating a B2C marketplace based on Magento Commerce. The FWC team had to solve technological challenges related to integrating various systems, including Mirakl. They developed and added several plug-ins to enhance Magento's functionality. "It was a significant technological endeavor, but our numerous dedicated solutions enabled us to expand our portfolio," said Ruben Pedrosa.
Ultimately, it became the largest Magento project in their portfolio. They are eager to continue assisting the client in achieving further success. The marketplace attracted 35,000 listings in 50 categories, giving users the possibility to compare offers for the same product from several retailers, the search engine using AI algorithms to recognise customer needs.
In Western Europe, marketplace e-commerce as a share of retail e-commerce consistently increased between 2014 and 2022, from 35% to 42%. The share of third party (3P) merchant sales in total marketplace sales also consistently increased, from 23% in 2014 to 30% in 2022, according to Euromonitor.com
More customers shop on marketplaces than anywhere else online. Being part of a marketplace opens up retailers and brands to a new tranche of customers. 62% of Europe's 100 largest online retailers are marketplaces. The strengthening of their position is evidenced by data, 85% of web traffic goes to marketplaces, according to ChannelX European Marketplaces 2023 report. From Europe’s 24 leading platforms, 11 are pure marketplaces that only connect buyers and sellers and that offer none of their own products.
Of these, seven are generalist marketplaces, selling products across a wide range of categories. The remaining four are specialized, offering a wide range of products around specific verticals like fashion and consumer electronics. The remaining 13 of the 24 marketplaces are either mixed marketplaces which sell their own products along with those of third-parties and brands or retailer-run marketplaces.
Amazon is the frontrunner, but local platforms remain strong
The European e-commerce marketplace landscape has one distinctive feature - there is no single dominant player, however Amazon and eBay lead the market in some countries. There are 27 countries in the EU plus the UK, Switzerland, and Norway. This fragmentation comes from linguistic and cultural differences that shape the market. Most of the domestic marketplaces focus on just one country, or a small number of closely connected countries.
Amazon is the leading online marketplace, with one billion visits per month, eBay is the second largest online marketplace in Europe, but with only 37% of Amazon’s European traffic, the third is Allegro which attracted close to 185 million visits, according to Webretailer.com (data excludes traffic from the UK). Zalando, a German company, is the only large pan-European marketplace other than Amazon and eBay. More than half of European consumers shopped on Amazon, in Italy 75% of shops on this marketplace. In Germany Amazon accounts for up to 45% of ecommerce net value, according to eCommerce Germany.
The largest ecommerce market in Europe is the United Kingdom, with over 60 million online users, British consumers spend about 10% of the country’s total GDP on products from online channels. Ecommerce in the UK takes a significant 38% share of all retail revenue. There are many marketplaces in the UK, but Amazon is the leading marketplace in the country in terms of revenues, followed by Sainsburys, third place is taken by Tesco.com, according to Statista.
In Germany, the biggest economy and the third-biggest ecommerce market in Europe, Amazon.de is the undisputed number one, followed by Otto and Zalando in net sales. Together, the top three online stores represent 40% of the top 100 stores in the German e-commerce market.
The Netherlands has played a pioneering role in the development of e-commerce. Even in its early stages in 2007, the country already featured over 5,000 online stores, as reported by Statista. This early adoption of online shopping contributed to the resilience of Dutch online retailers in the face of competition from foreign e-commerce giants. Established in 1999, bol.com is the largest domestic marketplace in both the Netherlands and Belgium. It is followed by Coolblue.nl, Ah.nl, Amazon.nl, and Jumbo.com. The top three online stores collectively account for 28.5% of the market share among the top 100 stores in the Dutch e-commerce market, according to data from ECDB.
Strategies for Navigating a Competitive Market
As competition gets stronger, market advantage is determined by an ever increasing number of factors that make up the customer experience: fast delivery, reliable returns, and seamless customer support is crucial for all marketplaces.
From the point of view of third-party sellers the strength of delivery networks, and fulfillment options are as important as never before as a part of the marketplace back-end. The surge in preference for marketplace buying can be attributed to several key factors. Convenience, highly competitive pricing, a wide selection of products to choose from, and easy-to-manage delivery options have collectively fueled this trend. Fulfilment is an important physical touchpoint in e-commerce, and critical to customer satisfaction. Delivering orders to customers on time, within an expected timeframe, remains one of the most crucial ways for marketplaces to stand out from other e-commerce players. As a result, marketplaces continue to invest in logistics infrastructure and develop their fulfillment models to speed up delivery times, improve the consumer experience and drive cost efficiencies.
A key part of navigating the highly competitive marketplace are strategies geared towards increasing product visibility. There are several steps that are must haves like optimizing product listings, adding compelling descriptions, explanatory titles, keywords, high-quality images. Each product responds to a customer need, so it is important to present the benefits associated with its use, clearly and concisely showing how it solves problems through real-life examples or engaging storytelling
Never ending quest of enhancing the customer experience looms large for sellers. Today you have to go the extra mile to build positive relationships. One has to meet promised delivery times, ensure products arrive safely, respond promptly to inquiries, resolve issues quickly, ask customers for the feedback, encourage them to share reviews to build credibility, and influence buying decisions.
Last but not least, constantly analyze data, users behaviour, sales reports to understand trends, and quickly respond to market needs.
Trend: centre around specialisation
The biggest trend in marketplaces for 2024 is going to centre around specialisation. While the ecommerce market as a whole may be dominated by giant generalist marketplaces, ‘horizontal’ marketplaces rely on their sheer size to dominate all retail verticals, according to ChannelX European Marketplaces 2023 report. The trend towards retailer-operated marketplaces is gaining momentum, ushering in an era of industry-specific marketplaces. Vertical marketplaces provide the advantages of traditional marketplaces with a specialized selection of products.
Zalando finds success through targeted offerings, Etsy paves the way in handmade goods, ManoMano in DIY and home improvement. Others took different approaches and built its position locally like Bol.com in the Netherlands and Belgium, and Allegro in Poland. Carrefour offers a diverse range of conventional grocery products, allowing customers to meet their basic needs effortlessly. Additionally, the store has expanded its offerings to include unique, artisanal foods, presenting shoppers with the opportunity to explore new flavors and elevate their culinary experiences.
The banking sector in Poland witnesses vertical growth in marketplaces
In Poland, the Vendora.pl project, owned by Credit Agricole EFL Leasing, exemplifies the vertical approach. Vendora.pl is a sales platform that provides top-notch equipment and financing solutions, catering to the needs of businesses.
Vendora.pl, a platform supporting corporate financing and streamlining the work of leasing consultants, offers a marketplace where consultants can sell leasing products without setting up their own shop. Entrepreneurs can conclude leasing agreements entirely online, benefiting from automatic credit decisions, online identity confirmation, and qualified electronic signatures. Our partner sought our services to create a marketplace integrated with EFL's online leasing platform. Prioritizing security and ensuring the highest standards of data protection were essential given our work in the banking sector. Ruben Pedrosa, Business Development Manager at Fast White Cat, explains that Magento's flexibility allowed them to customize modules to meet our partner's specific business requirements.
Fast White Cat also implemented a project in Slovenia, creating a B2C marketplace based on Magento Commerce. The FWC team had to solve technological challenges related to integrating various systems, including Mirakl. They developed and added several plug-ins to enhance Magento's functionality. "It was a significant technological endeavor, but our numerous dedicated solutions enabled us to expand our portfolio," said Ruben Pedrosa.
Ultimately, it became the largest Magento project in their portfolio. They are eager to continue assisting the client in achieving further success. The marketplace attracted 35,000 listings in 50 categories, giving users the possibility to compare offers for the same product from several retailers, the search engine using AI algorithms to recognise customer needs.