Growing With Marketplaces

Source: Violetta Volovich, Friday, Aug 24, 2018

As platforms connecting sellers and buyers, 3P marketplaces are now a retail channel in their own right, providing global brands efficient access to hundreds of millions of online shoppers. CPGs should leverage marketplace reach and consumer base to drive growth.

In anticipation of our annual Future Retail Disruption report, to be published in September, we are previewing some of the dramatic changes retailers and suppliers can expect as they prepare for future disruption.

Digital marketplaces offer access and growth potential

Enabled by rapid technological progress and swift social change, ecommerce will be the fastest-growing retail channel worldwide between 2018-2023, with third party (3P) marketplaces now accounting for 55% of global ecommerce and contributing the overwhelming majority of added sales.

Thanks to the depth and breadth of their offer, 3P marketplaces also attract the largest shopper bases in ecommerce, making them an integral part of the modern retail landscape. The ability to capitalise on marketplace growth while managing the risks will be perhaps the most important element of success for brands over the next 5 years.

3P marketplaces are larger and growing faster than omnichannel and pureplay business models, carried by strong expansion in the US and Europe, as well as emerging markets such as China and India.

At a time when physical shelf space is becoming increasingly scarce, brands should leverage this cost-effective route to massive customer bases to expand their reach. A strong presence in ecommerce, led by marketplaces, will be a way to offset declining in-store volume and placement driven by smaller stores, expansion of service areas, and the advance of private label.

Different rules of engagement

Along with these growth opportunities, digital marketplaces also present operational challenges for brands that list on them. With the retail environment differing from physical stores, brands must prepare for different demands when working with a marketplace retailer.

A key difference is that digital marketplaces mean intensified competition for manufacturers. The ecommerce barriers are lowered, allowing more brands to enter the market, including foreign brands. They also expose established CPGs to price and product comparison, making it harder to stand out from an almost limitless offer. In some of the world’s leading platforms, the assortment will already comprise hundreds of millions of items.

To truly seize the marketplace opportunity, CPGs need to overcome the inherent visibility problems. They must invest in their marketplace presence by developing effective product content, determining assortment mix, tailoring pack sizes, allocating marketing resources to build brand recognition and loyalty, and partnering on vendor programmes.

With more consumers often associating their shopping journey with a marketplace and with access to consumer data limited, to excel in shopper engagement and retention, CPG must forge close partnerships with marketplaces, enabling data sharing, accelerated innovation rates and shopper access within multiple touchpoints across marketplace ecosystems. 


  • Design an organisational structure that enables strategic partnerships and appropriate investment with leading marketplaces.

  • Develop separate go-to-market strategies (assortment, packaging, pricing) that align to the specifics of each unique marketplace.

  • Join platform vendor programmes to maximise insight and expand reach.

  • Ensure visibility through organic search performance, enhanced product content, deep reviews and programme participation.

  • Leverage shopper insights available from marketplaces to fuel product development and maximise targeting opportunities.Create engagement touchpoints beyond retail to get embedded in end-to-end digital shopper journeys.