Different Types of Marketplaces You Must Explore to Expand Your Business
Businesses have seen a massive digital transformation over the years as eCommerce is continuously flourishing. Today many businesses are eagerly and constantly looking for diverse marketplaces to reach out to their target audience efficiently, cut down hefty marketing costs, and maximize profits. In such a scenario, optimizing a business’s presence on online marketplaces is quintessential. Online or offline, marketplaces are the best pals for businesses to connect directly with their customers, expand themselves and make swift payments. Marketplaces have gained immense popularity and are seen as a great investment opportunity. This article describes different types of marketplaces you must explore to expand your business and will also help you choose the best option. Let’s get started!
Classifications of Marketplace Platforms You Need to Know
The classification of marketplaces is done based on the targeted niche, audience’s footfall, revenue generation, and ease of management. There is generally a perception that marketplaces resonate with online retailing only. However, it comprises other sectors like education, manufacturing, insurance, health, and finance amongst others.
Abbreviated as B2B, this marketplace connects organizations, independent vendors, wholesalers, or manufacturers to other businesses directly. For example, a honey manufacturer can sell by-products like beeswax and royal jelly directly to other cosmetic manufacturers via a B2B marketplace. This type of marketplace is leveraged to generate and track bulk orders. A B2B marketplace is an excellent choice to deliver services efficiently and making an online presence here is also quite easy as compared to opening a retail store or building a separate e-commerce website altogether. Popular examples of B2B marketplaces are Amazon Business, Bizongo, Alibaba, Flipkart, and Udaan to name a few.
As it is quite understandable by the name, a B2C Marketplace is an app or a website that connects vendors/sellers directly to its consumer without any third-party interference. On a B2C platform, consumers have the liberty to choose from a variety of options offered by numerous independent sellers. The B2C marketplace is the most acknowledged and relevant model that comprises tycoons like Flipkart, Amazon, eBay, and AliExpress. The operations of a multi-vendor marketplace platform drive an immense amount of traffic and businesses present here are highly scalable. The tedious task of maintaining an inventory is also handled by a B2C marketplace as it simply acts as a bridge between the buyer and the vendor.
Also known as a Customer-to-Customer marketplace, a P2P marketplace brings together consumers and enables them to share products and services through a single platform. Here an individual acts both as a consumer and a service provider. This marketplace has a shorter sales cycle as compared to B2B or B2C. P2P marketplaces are exploding in popularity and function even with limited resources. It connects people who provide a service with people who want to buy or rent it. The work of the platform is to handle payments and build trust between the parties. Popular Indian P2P platforms are The Money Club, Lendbox, Finzy, Faircent, i-Lend, and PaisaDukan amongst others.
Classification of Marketplaces on the Basis of Focus
A vertical marketplace deals with a certain sector or category and delivers goods and services around it. It follows the concept of, “Selling a niche product to valuable consumers”. They aim for a single sector of the market and fulfill the demands of a specific category of products. Hence players of the vertical marketplace are the masters of particular niches and bring profound value to their target consumers. Zivame, CarDekho, Faaya, Ferns and Petals, and Nykaa are prominent players in this segment.
The horizontal marketplace caters to the needs of a wide range of consumers across different sectors of the economy. Unlike the vertical marketplace, the horizontal marketplace doesn’t focus on a specific category of items to sell. It sells almost everything and thus attracts a broader audience. In simple words, a horizontal marketplace follows the concept of a “One Stop Shop”. It means that customers have the ease to purchase everything under one roof and they don’t have to navigate through different online websites to purchase different niches of products. Classic examples of horizontal marketplaces are Amazon, Snapdeal, Flipkart, and JioMart.
As discussed above, building an online marketplace platform is a commendable investment opportunity for businesses. A thorough analysis of the niche, target audience, and monetization model is necessary to optimize your marketplace and attract a gigantic crowd of interested users while revenue generation takes place alongside. Along with it, you also run detailed market research and competitor analysis on the type of chosen workplace.