The importance of local marketplaces in Europe International sales expansion is a key strategy for growth, and marketplaces help retailers achieve this. However, smaller local marketplaces often go unnoticed, despite offering unique opportunities to reach new markets and customers. In this article, Niels Floors, Head of Partnerships & Sales at ChannelEngine, reveals the hidden growth opportunities of selling through local online marketplaces.
Bigger is not always better
People love to store in famous, iconic locations; Fifth Avenue in NYC, Oxford Street in London or the Champs Elysées in Paris, just to name a few. These places attract crowds of tourists actively seeking the opportunity to spend money in some of the most famous shopping areas in the world. But they are not necessarily the places where locals store; they may stop by for a look, but locals often have their own places where they like to shop for good deals and unique items, such as small independent stores, outlet malls and local markets – and they often avoid the tourist traps altogether.
This pattern of behavior applies equally to online shopping. While we often focus on the big online marketplaces such as eBay, Amazon and Zalando, local online marketplaces are the true heroes for a wide audience of loyal consumers and retailers. These platforms often emerged as local alternatives to Amazon and eBay, which developed before the international giants expanded in those countries.
In France, Amazon’s market share relative to their nearest competitor is not as large as you might think.
Competitors of marketplaces in France
Although the large marketplaces still hold a dominant position in many of these markets, the difference between them and local marketplaces is not so great. Amazon and eBay occupy the top two positions in the U.S. and have significant leadership.
By 2021, Amazon USA is predicted to have more than five times the market share of its nearest competitor, Walmart, and more than nine times the market share of eBay (the No. 3 e-commerce site).
By contrast, in France, 33% of shoppers rarely or never buy on Amazon. According to Favad (Fédération du e-commerce et de la vente à distance), Amazon, although still No. 1 in France, has only twice as much market share as their nearest competitor (Fnac), and 70% of the top ten e-commerce sites are local marketplaces.
In many cases, local marketplaces have maintained their position across Europe despite strong competition from the big names.
International expansion should be part of the plan
For almost every retailer, international sales growth should be part of the plan. Local marketplaces are a huge opportunity for retailers because they allow them to reach customers who would otherwise be inaccessible – and yet these rich veins are often overlooked to promote international expansion. It’s time to celebrate the value of local marketplaces and understand how they should be part of your online retail growth strategy.
Maximum exposure on the biggest marketplaces is not always the best strategy
Although you should also sell on the major marketplaces, it is much harder to get noticed on these environments, so it should only be part of your strategy. You can expand sales further by targeting local marketplaces as well. These marketplaces have much more targeted audiences, which can make it easier to reach these groups more accurately and effectively.
Benefits of local marketplaces
They are your hero, with valuable local knowledge.
The local marketplace is your local hero – they’ve already done most of the heavy lifting by creating a shopping experience that works in the local area. They have accumulated a wealth of knowledge and understanding about shopping habits, preferred payment methods and the desires of their target audiences, so they can market themselves more effectively to these consumers.
Existing customer loyalty.
Local marketplaces also have existing customer circles of loyal customers, and these are mainly customers who often avoid shopping at the large marketplaces – so there is no other way to reach them.
Future expansion opportunities (Zalando was once “local”).
The potential for future expansion should also not be ignored. Currently, Zalando is the largest fashion marketplace in Europe, but it originally began as a local marketplace in Germany.
If you’re already successfully selling on these local marketplaces, you’ll have a head start when (or if) they get big and expand.
The best local marketplaces in Europe
There is a wealth of local marketplaces that offer ideal opportunities to reach new customers. Some of these are growing very quickly, while others already have significant market share in the online retail market.
How to get started – partner for local knowledge
With so many options and choices available, it can be difficult to know where to start. Technical aspects such as integration, content management, administration and VAT can seem daunting.
However, it has now become much easier to connect to marketplaces through a solution that connects you to multiple marketplaces. These products work by integrating with your existing backend system. Each order is still handled the same way it is now, but it uses one inventory to sell through multiple channels.
Companies such as ChannelEngine also offer a complete tool that handles content management, translation, tax and financial administration, while also providing advanced pricing and repricing tools tailored to each marketplace and country.
With a solution like this, you remove many obstacles to rapid sales expansion.
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