E-commerce is growing, but it also creates risks that are difficult to control. So what is the marketplace that commercial sites trust so much? Do they really connect the customer with the seller as perfectly as imagined?
|What is Marketplace?
For anyone wondering what a marketplace is, you can simply understand that this is a type of online marketplace in an e-commerce environment. This place helps sellers and buyers connect to buy and sell products in need.
In the Vietnamese market, this model has been present in the market since 2013 and marks the transformation of the B2C model to this Marketplace model.
The appearance of the marketplace is superior because traditional B2C will require investors to spend a lot of money to invest in goods, transportation or storage, etc.
Popular marketplace models
Currently, the market classifies the marketplace into many different forms for easy control and monitoring. Some of the most common classifications include:
According to business partners
|Separate by who is the business partner
If the partner is a company or an individual, the marketplace will be divided according to the B2C marketplace and the C2C marketplace, respectively.
B2C marketplace model
This is an online marketplace model that connects branded companies or retailers in the Vietnamese market to consumers. Here, consumers can buy good quality products from many reputable brands.
According to the regulations, businesses that want to display their products at trade centers must provide all official and approved documents. So, perhaps it’s easier for a C2C marketplace seller than B2C, but B2C is always easier to build trust thanks to these strict regulations.
For this model, people and commercial households will be connected. They want to sell people what products can be exchanged more easily. As long as sellers have products, they can sell on this market. The goal of buying in this market is not difficult to reach, but there are not as many sales support channels as the B2C model.
|Separate by products for sale
If classified by products sold on the market, the marketplace will be divided into 3 types. So what are those 3 types of marketplace?
- Vertical Marketplace: This market offers the same products but comes from many different suppliers. This is a market that requires suppliers to have good prices and quality to meet market requirements.
- Horizontal Marketplace: For a horizontal marketplace, the market offers a variety of products in the service sector from food to fast food, restaurant food,…
- Mixed Marketplace: All products can be sold in this marketplace. The market will not distinguish which product belongs to which industry but to mix and any product is available to serve consumer needs.
Advantages and limitations of selling online on marketplace
The allure of marketplaces is undeniable for online businesses. So what are the good and bad points of the marketplace?
|What is the advantage of marketplace?
Marketplace helps sellers reach a large number of customers accessing exchanges. This will give sellers the opportunity to sell products in a simpler and more economical way. Specifically:
The provider will not have to spend money on advertising, product design or buying a domain name on the website. Besides, when opening a store to sell products, investors will definitely have to pay the cost of hiring staff, warehouse, management, .. However, on the marketplace, these costs will be minimized to the maximum. because the administrative activity will be through the list on the exchange. In addition, order processing, packaging or shipping are all more supported.
Building consumer trust
|Users are confident when buying on commercial products under the model marketplace
When selling products on reputable marketplaces such as Lazada, Shopee or Tiki, consumers feel more secure thanks to previously committed policies. Therefore, products of individuals or companies that have not yet built a brand should apply this model.
Limit the disadvantages of the traditional model
With the development of e-commerce and the growth of international science, the old sales model is no longer preeminent. Therefore, the marketplace has quickly gained a solid position because it connects businesses with customers and limits the risks around.
Disadvantage needs to be overcome
Although the marketplace has many outstanding advantages, there are still some disadvantages that need to be changed to enhance its potential. These include:
|Submit marketplace fees on exchanges
Depending on what product you are selling, whether that market has potential and growth, the seller must pay a certain amount of commission when there is a sale. This can affect your income if not calculated carefully. So, sellers should balance profit and commission to decide whether to apply marketplace to their business strategy or not.
The competition is pretty fierce
With the same product sold, inevitably you will have many competitors in the market. At that time, customers will consider and compare prices and quality to see which is a good supplier. So, your customers can fall into the hands of others within a few seconds.
|No control over sales data
Information about your customers will be withheld on the marketplace platform. Therefore, you will not be allowed to use this data to guide your next sales strategy. Even if you no longer do business on the marketplace, any data such as sales history, sales statistics or customer purchased information cannot be restored.
Units are using this model
Some units operating on the e-commerce floor are applying the marketplace model very successfully, which are:
Pioneering in applying a prominent e-commerce model in Vietnam marketplace, Lazada has quickly built a professional B2C web to support customers optimally. All operations of self-ordering, payment to the commitment of information security are well done by Lazada.
In addition, this trading floor also combines with a continuous advertising strategy, deeply promoting consumer psychology and offering many great promotional codes, so it has been gaining the trust of the majority of consumers in the market. Vietnamese market.
Tiki – Convert model to marketplace
|What is Tiki using the marketplace model?
Tiki has had a period of importing goods and storing them and constantly checking the quality, then in charge from A-Z of management, delivery and customer support. Although this type of operation also ensured quality and satisfied consumers, Tiki products were not really diverse at that time.
Since Tiki switched to a marketplace model, products have become more and more diverse and richer. They have more than 10 categories on their e-commerce trading floor.
Although this marketplace model helps consumers to choose from a wider range of products, the problem is that some products may not be as high as you expect. Therefore, please carefully review the information and comments of previous buyers to avoid losing time to exchange and return goods.
In addition, to distinguish goods sold by Tiki you should pay attention to the following contents:
Tiki Trading: The goods printed with the word “Supplied by Tiki Trading” mean that it is sold by Tiki itself, consumers are completely safe to buy this product.
Third party: Products without Tiki Trading line mean they are sold by a 3rd party. This party can be a business or individual registered to sell on Tiki. Although these products have been tested for quality, they are still available for sale, but sometimes problems arise that consumers are not satisfied with.
Shopee – Successfully applied marketplace
|Shopee is gaining popularity thanks to the successful application of this marketplace model
Shopee has recently become widely known and loved by many young people because of its easy-to-use interface. This trading exchange was established in 2009 and is headquartered in Singapore. Shopee is present in many markets in many countries in Southeast Asia such as Malaysia, Thailand, Taiwan, Philippines, Indonesia and Vietnam.
Initially, Shopee’s business model in Vietnam was C2C Marketplace, meaning it played the role of an intermediary model in the process of buying and selling goods between individuals. However, Shopee has now developed a hybrid form in the presence of a B2C marketplace ie businesses – users. You can easily go to shopee mall to buy quality products.
Similar to other e-commerce sites, shopee is also a reputable online sales address and always has many promotions to attract consumers. This marketplace model has really helped shopee achieve more success than expected.
Sendo – Good coordination between C2C and B2B
|Sendo with multiple discount codes
Sendo is an e-commerce site created by Vietnamese people and has been coming to consumers since 2012. This exchange was officially expanded and operated under the C2C marketplace model and later combined C2C and B2B relatively. similar to Shopee.
Sendo also regularly applies attractive discounts and promotions to consumers. Thanks to that, this online sales model is known to more people. Although they have just appeared and many people still do not understand what a marketplace is, these giants have dominated almost the entire Vietnamese electronic consumer market.
Hopefully the above information has partly answered the question of what a marketplace is, what types of marketplaces exist and why they bring such great success to businesses doing business on e-commerce platforms today. . Currently, many trading floors have successfully applied this model, you can also be the next to do even better when using marketplace for business.