Specialized marketplaces gaining ground

Marketplaces have become dominant in global ecommerce, accounting for 60 percent of online spending last year. In Europe, specialized marketplaces in particular are benefiting from this growth.

This is stated in a new report by OC&C Strategy Consultants. According to the agency, consumers worldwide spent 4.1 trillion dollars on online marketplaces last year, marking a growth of over 70 percent in three years and fueling cross-border trade.

Specialist models

OC&C’s analysis reveals that specialist models, including vertical-focused, secondhand, and hyper-local models, have played a significant role in driving the growth of online marketplaces. They capture business by addressing specific customer needs that generalist marketplaces have struggled to meet. These specialist model marketplaces have surpassed generalists in growth, expanding almost 1.6 times faster.

Specialists have overtaken generalists in growth

While generalist marketplaces experienced an average annual growth rate of 23 percent, specialist model marketplaces achieved a compound annual growth rate of 36 percent, taking market share from historically dominant generalists like European marketplace leaders Amazon and eBay.

Vertical-focused shopping

This growth is particularly pronounced among marketplaces in Europe, where specialists are well-established, capturing a 15 percent share of marketplace spending, compared to no more than 5 percent in China. It indicates that European consumers are more inclined toward vertical-focused and curated shopping, although OC&C notes significant differences between categories. Especially in relatively mature ecommerce segments such as consumer electronics and clothing, specialists are increasingly gaining market share.

Mid-sized specialists

Mid-sized specialist marketplaces have emerged in recent years, particularly in Europe, according to OC&C. Examples include Trendyol from Turkey, the German Zalando, Backmarket and Rue du Commerce from France, and the Spanish Privalia. Ankul Wangoo, associate partner at OC&C Strategy Consultants, states that they can offer more curated and tailored experiences, building greater trust with shoppers.

‘Specialist marketplaces can build greater trust’

Wangoo notes that this poses challenges for brands and retailers, emphasizing the need for a thoughtful distribution strategy across a growing set of marketplaces. However, it also presents opportunities by opening new avenues to reach new customers. “This also poses a challenge for generalist marketplaces”, Wangoo concludes. “They will have to improve their proposition to ensure they remain competitive in their key verticals.”