6 tips to accelerate the growth of a marketplace

The marketplace is an economic model in very strong growth, particularly because it has allowed businesses or retailers (with mortar stores) without an e-commerce site to find alternative outlets during the successive confinements. According to FEVAD figures for the first quarter of 2021, "on average (...), marketplaces have grown by +44%, a growth which, for the first time since the beginning of the crisis, exceeds that of the market". New marketplaces are springing up daily in all sectors, so competition is fierce. So how can you accelerate the growth of your marketplace? We give you 6 tips to stand out!

How big is the marketplace industry and what us the market growth rate?

The marketplace sector is expected to experience sustained growth in the coming years. By 2025, the European Union B2C e-commerce market is projected to exceed €500 billion, positioning it just behind China and the United States. This expansion, particularly strong in Western Europe with an estimated 20% growth by 2027, is driven by the rise of online and mobile commerce. Marketplaces will be at the forefront of this trend, attracting more and more consumers drawn to their convenience, while a growing number of retailers will use them to sell their products – and even launch their own marketplaces.

What is the future of marketplaces in 2024?

Marketplaces in 2024 will continue to evolve, leveraging technology and financial innovation to enhance efficiency, improve trust, and expand their reach. The future of marketplaces in 2024 will be shaped by several key trends, such as: embedded finance and payment innovations, AI-powerd personalization and automation, compliance and regulation challenges, cross-border selling, sustainability, omnichannel strategy, etc. 

What is marketplace strategy?

1. Position the ecommerce marketplace

You have an idea for a marketplace, you have identified a need in your sector, you have a particular skill that is an authority in your sector? Position yourself as a reference, so that you can establish your legitimacy, but moreover, customers and sellers will trust you more easily. For this, a few points of attention:

• Make sure your offer is consistent, spreading yourself too thin will only confuse your message and put you in competition with the big generalist marketplaces.
• Put forward the strong points that will serve to differentiate you and perfect them, they are your added value.
• Make sure you follow through on the commitments you post (especially those regarding the strengths you emphasise to have the right successes).
• Reassure customers and vendors with available, courteous, and efficient customer service.

2. Develop the offer to boost your online marketplace market size

Attracting new sellers to expand your offer, to attract more buyers, to increase your traffic and monthly visitors, which in turn attracts even more sellers, and so on, is like the eternal chicken and egg story. Fortunately, with a well-positioned platform (point 1), there are solutions to attract sellers, even if you are just starting:

• Approach sellers present on other ecommerce marketplaces, indeed, if they are already used to this type of distribution, it will be easier to convince them to come to you.
• Approach sellers who are not yet present online: many companies, especially in B2B, are reluctant to launch an e-commerce site, the marketplace represents a good alternative.
• Knowing how to differentiate with an attractive offer and key differentiator that meets the needs of salespeople, such as personalised support, training, tools that facilitate the management of their activity, rapid remuneration, attractive commissions, etc.
• In case of niche marketplaces, make sure you have the right product categories to gain greater market share and increase the average gross merchandise value (GMV) of purchases.

3. Identify user priorities and deploy key features

The main lever to differentiate your online marketplace offer is to know your stakeholders well. What are consumers looking for? What problems do sellers face? Understanding the market on which you are positioning yourself by analysing supply and demand not only allows you to anticipate possible obstacles but also to develop features that:

• Will lift these brakes
• Will meet the demand of the custome base
• Optimise the user shopping experience and provide an easy access

4. Exploiting the data and define marketplace growth strategies

Having quality sellers is a key lever for the growth of your marketplace, but they may be reluctant to join a new and still growing marketplace. We live in the age of data. Leverage the data you have, whether it's buying behaviour, purchase frequency, inventory, pricing, etc. By sharing it with your salespeople, you'll build trust and make their lives easier. You can also use the Ai to improve inventory management, provide a dynamic pricing, look for a broader assortment, etc.

5. Create a trusted environment on the online market

In the jungle of online goods and services, what pushes buyers to use a marketplace rather than another is the ease of purchase, the possibility of comparing offers, the availability of products or services, the choice, the favourable and secure purchase conditions, etc. For sellers, the decision to distribute their offer on a marketplace is motivated by the visibility that this provides for their offer, by the support and training offered by the marketplace, by the reputation of the marketplace, and/or of the other sellers that are distributed there, etc. Although they have different expectations, there are several points on which they agree:

• The quality and scope of the offer (see point 2)
• Ease of use: the platform must be intuitive and ergonomic, inspire confidence and offer practical tools and features.
• The commercial conditions and the payment solution: the marketplace act as a trusted third party, it must therefore offer a reliable and secure system to reassure the buyer on the validity of the transaction and the sellers on obtaining a quick payment at a reasonable cost.

6. Act as a facilitator between sellers and buyers

Once you have attracted sellers to your marketplace, the main challenge is to avoid disintermediation. Buyers and sellers must perceive a value in going through the platform rather than dealing directly with each other. To do this, there are two levers:

1. Sellers should be able to easily manage their pre-existing relationships through the platform without penalty.
2. Sellers and consumers must perceive the advantages of going through an intermediary, such as the one-stop shop for businesses or people, guarantees, dispute management, etc.

If there are different levers to accelerate the growth of a marketplace, the important thing is to manage to create coherent, rich, efficient, and above all trustworthy environments. It is therefore essential to deploy a simple, reliable, and secure payment solution.

Seize payments marketplace opportunities with Lemonway

To support you in this process, Lemonway, an approved European payment institution, offers its expertise and payment solutions to marketplaces. Using certified tools, Lemonway helps you navigate all the regulations in EU countries, whether they affect B2C, B2B or C2C marketplaces or financial platforms.

Contact Lemonway for personalised support and payment solutions designed to meet your platform's compliance and growth challenges!