Evolution of Online Marketplaces - eBay and Facebook are rising to challenge Amazon's dominance

Evolution of Online Marketplaces - eBay and Facebook are rising to challenge Amazon’s dominance

Summary

As 2020 draws to a close, the battle on online marketplaces for consumers who have been unable to reach physical shops during lockdowns is coming to a head. The Christmas holidays bring peak demand for consumer goods, and many customers have turned to the comprehensive selection of Amazon’s marketplace. The world’s biggest retailer saw sales soar by 37% year-on-year in Q3, suggesting that its dominance in e-commerce might have been cemented in 2020. However, loyal customers wanting to support local commerce are being provided with more options than ever to shop online without going through Amazon, with the world of e-commerce accommodating several business models. Social e-commerce marketplaces are a rising alternative to Amazon’s model, which had an eventful 2020 as well and face an equally decisive 2021.

Key Highlights

• Amazon is the undisputed king of e-commerce, and has relied on a powerful, hybrid business model for its success. It is a platform for third-party sellers which offers them a vast consumer audience across multiple countries and a slick logistics network. It is also a retailer in its own right, stocking its own goods for sale on its platform and therefore competing directly with the sellers it hosts. There are other hybrid marketplaces like it around the world, but Amazon’s treatment of its sellers is unique.
• However, there are problems with the Amazon model. Chief among these is its aggression towards its third-party sellers, who are still essential to its business but who are seeing an increasing range of more accommodating options in the online marketplace sphere. The biggest of these is eBay, which has a great deal to offer but still has growth to reach for in the form of improved technology and a clear marketing strategy. Meanwhile, Facebook is bringing the social marketplace to prominence in most markets outside China, and practically single-handedly. Its Marketplace and Shops platforms are defying expectations of what an online marketplace monetized purely by advertising revenue can achieve.
• As 2020 draws to a close, the battle on online marketplaces for consumers who have been unable to reach physical shops during lockdowns is coming to a head. The Christmas holidays bring peak demand for consumer goods, and many customers have turned to the comprehensive selection of Amazon’s marketplace. The world’s biggest retailer saw sales soar by 37% year-on-year in Q3, suggesting that its dominance in e-commerce might have been cemented in 2020. However, loyal customers wanting to support local commerce are being provided with more options than ever to shop online without going through Amazon, with the world of e-commerce accommodating several business models. Social e-commerce marketplaces are a rising alternative to Amazon’s model, which had an eventful 2020 as well and face an equally decisive 2021.

Scope

• Learn what dominance in the market Amazon holds.
• See how some consumers are turning to other platforms.
• Understand, which platforms are competing well against Amazon.

Reasons to Buy

• How does the Amazon business model work?.
• In what areas does it have noticeable flaws?.
• What firms are exploiting these weaknesses?.
• What trends are encouraging consumers away from Amazon?.