In our last blog, we covered how you can boost performance from your global marketing activities by investing in digital marketing for your international markets. In this article, we’re focusing on marketplace strategy and how you can extend your reach internationally by considering local marketplaces in your approach. Whilst Amazon is undoubtedly one of the most popular marketplaces globally, having a presence on local marketplaces remains one of the quickest and smartest ways to reach new customers and drive sales across international markets.
There’s more out there than just Amazon
With an average of nearly 417 million monthly visitors, Amazon is the biggest marketplace in the UK, and it’s also the most popular marketplace on the web with three times the market share of its nearest competitor. Despite its overall global dominance, Amazon is not necessarily the most popular marketplace in every country.
Bol.com is said to be the ‘Amazon of the Netherlands’, and while it currently only ships to Belgium and its home market, in 2019 it managed to achieve a revenue of 2.8 billion euros. You do need a Dutch address to operate on Bol, but a virtual one would suffice. There are other regulations you need to comply with, such as being a legal entity in the Netherlands and registering your company with the Chamber of Commerce, but if you want to expand your reach across the North Sea, then Bol.com is your best bet.
Similar to the Netherlands, neither Amazon nor eBay is the most popular marketplace in Poland. That title belongs to Allegro. With over 220 million monthly visits and 21 million registered customers in 2020, Allegro is the ideal marketplace for trading in Poland. Poland itself is an increasing market, and in 2020 the Polish e-commerce market grew by 24%. If you are considering Poland as your next international market, now is the ideal time to invest.
According to the IBEF, India’s e-commerce market is expected to be worth an impressive USD 200 billion by 2026. The best way to take advantage of this growth with minimal additional investment is to gain a presence on their leading marketplace, Flipkart. Whilst their dominance in India is only 1% difference in overall market share with Amazon India, which option is best for you will depend on the products you intend to sell.
Mercado Libre is the largest marketplace for the whole continent, and in March, they announced a record investment of USD 1.8 billion into its logistical service in Brazil. They have also now surpassed Amazon in Mexico as the most popular after pouring USD 51.9 million into guaranteeing 24-hour delivery timeframes to the whole of Mexico. If South America is somewhere you see your business exploring, having a presence on Mercado Libre seems like the best place to start.
Nothing is Perfect
Marketplaces have their advantages and disadvantages. Here is a quick summary of those to help you decide if setting up shop on a marketplace is the best way to expand your business and most importantly, increase your profits.
- Setting up a store on a marketplace is quick and easy.
- Thousands of customers will instantly have access to your products/services.
- Joining a reputable marketplace builds trust between you and its users.
- You will be open 24/7.
- There might be legal documents to complete before you can start selling.
- You will most like have to pay a fee for using the marketplace. Also, the marketplace will take commission on every sale you make, so look into this upfront.
- Many competitors will also be vying for your potential customers’ attention.
- There might be a limit on customisation, making it difficult to stand out, so make sure to ask about this first.
It goes without saying that succeeding in any international market means ensuring you are speaking the same language as your customers. The more local your approach, the better your results. Not only do your shopfront and products all need to be in the local language, it’s also worth investing in marketplace optimisation for your products to maximise visibility, especially as there are so many other businesses competing for sales on the same platform.
Each marketplace has its own rules and regulations. We highly recommend researching these before going ahead.
If you’d like advice on which marketplaces might be right for you, contact ALM to find out more!