Mankind has traded goods and services since the dawn of time. It didn’t take long for our ancestors to create centralized areas to exchange items and services of value. The first marketplaces, bazaars, have been recorded around 3000 BC (some 5000 years ago), though it is believed that the existence of marketplaces goes back in time even further. Bazaars and marketplaces thrived and grew exponentially once trade routes were established between cities, civilisations and later on even continents.
In the 16th century the Bazaar of Tabriz was the Amazon of that day, attracting and connecting traders from around the world. This bazaar wasn’t just a place where people came together to trade products and services, it was much more - a place where people could find anything for their needs at the time, one place that had it all.
This bazaar solved many problems for all kinds of people; as a farmer, you could sell your surplus of livestock for gold that was needed to pay taxes for the king’s rented land, or buy rare, exotic spices hard to come by as an innkeeper. The bazaar even functioned as a supermarket for the commoners, doing their daily groceries, finding their products for the right price and quality. Bazaars and marketplaces were also social, cultural places where new ideas and innovations were shared, and these ideas and innovations would eventually change the world.
Marketplaces are cultural and social places that solve problems for sellers and buyers
Physical marketplaces are still out there but play a less prominent role in our Western Europe daily lives. Supermarkets, malls, shopping districts, retailers, wholesalers and certainly websites have taken the upper hand when it comes to buying and selling. Today, with our busy lives, precious free time and mobile technology, we prefer not to walk and shop for hours anymore. We don’t even enjoy endless browsing and hop from site to site. Nearly 55% of people start their product searches on Amazon just out of convenience or to save time, and 37% of the online total spend is with the same marketplace giant.
Arguably then, digital marketplaces are changing the world once again. According to trend watchers and analysts (such as Eric van Hall, Mediaweb) digital marketplaces are a hot topic this year as a channel for business growth. You could say that the decision to host or join a marketplace can no longer be ignored.
So, what’s the big fuss all about? Marketplaces like eBay and Craigslist have existed for over 20 years. Why, all of a sudden, are digital marketplaces such an interesting business proposition for retailers (B2C) and wholesalers (B2B) in 2018? And why should you get involved with this model? Should you start your own marketplace, sell via existing one, or do nothing at all, expecting the hype to blow over?
Before we dive further into the hype of digital marketplaces, let’s first have a look at what exactly a digital marketplace is, starting with a definition….
What makes Marketplaces unique is that they allow brands and sellers to inherit the demographics and seasonality of the channel. Brands can appeal to entirely new customers and verticals.