What online marketplaces mean or ecommerce competition

What online marketplaces mean for ecommerce competition

Online marketplaces are changing the way consumers search and shop for products online. With websites such as Amazon, eBay and Etsy continuing to grow in both size and popularity, ecommerce competition is more complex than ever before. Not only are brands competing directly with other brands, they are now battling marketplaces that are populated by thousands of competitive sellers. This has opened up the question; should brands consider joining the marketplace masses?

Defined as a website or app that facilitates shopping from many different sources (Forbes), an online marketplace gives merchants an additional channel, aside from their own website, to reach new customers, promote their products and achieve product sales. With such benefits for both customers and brands, it’s no wonder that marketplaces are estimated to account for 50% of current global online retail sales. But there’s more to it than that.

Nobody can deny that there are a whole host of advantages to online marketplaces, including reaching a wider audience and expanding your international footprint, all of which boost their appeal. However, with every good thing comes potential challenges, and brands must be equally aware of the potential negative impact of online marketplaces if they want to make an informed decision about whether a marketplace is right for their online retail strategy.

Be aware of the pros and cons of marketplaces

One of the challenges that comes with online marketplaces is barriers to brand equity. Although it varies per company, marketplaces often give little brand exposure, meaning you could lose out on building customer loyalty. In most cases, customers purchase products on the marketplace, rather than being directed to your brand’s website, which also contributes to a loss of domain authority. If customers know they can visit an established marketplace to purchase your products, they are less likely to organically search for your brand to buy direct. This could impact your website’s authority in the eyes of search engines.

When working with a marketplace, there are also certain rules and agreements that must be agreed to. Naturally, this gives brands less flexibility and control over how they sell. One of things you agree to by joining a marketplace is to compete with other merchants selling similar products, all on one page. Of course, it could be argued that by not appearing at all, you’ve already lost out to these competitors. However, brands should consider how their offering compares to others before entering such an environment.

With so many pros and cons, it’s not easy to form a solid opinion on online marketplaces and how they impact ecommerce competition. It will vary dependant on the size of your brand and products you sell. What is certain is that marketplaces certainly aren't for everyone. If you've decided to go it alone, how can your brand survive as an Amazon competitor?

1. Understand what is important to your customers

There is no such thing as perfect competition. Brands, marketplaces and consumers all have the ability to dictate price, products and convenience. It's highly unlikely your brand will be able to compete with Amazon, eBay and other such marketplaces in every way. The key to ecommerce competition is to focus on competing in the areas that matter most to your customers. And contrary to popular belief, this doesn’t always mean price.

Maybe your ideal customer does value price. But perhaps they would prefer perks such as free next day delivery, or maybe customer service is the most important part of the ecommerce experience influencing their purchasing decision. Data activation is key to understanding where to compete. Gather insights into your customer's demographics, online behaviours and sessions, along with qualitative data from customer surveys, to discover what it is that makes your customers tick. It’s not always about using every opportunity to send them a new promo code. Once you have an idea, focus on optimising that area for competitiveness.

When you have a better understanding of your customers, not only can you start to compete in the areas they value, but you can also start to deliver more relevant content that responds to customer behaviour in any moment. By delivering this level of personalised experience, you’ll help every customer to find the products they want on your website, not a marketplace.

2. Increase brand awareness with digital advertising campaigns

As recent research found that 49% of consumers go to Amazon first when shopping online, brands must be actively promoting both their brand and products digitally to challenge the ‘Amazon by default’ mindset. This is especially important when we consider that it’s not only Amazon that dominates consumer awareness. 80% of shoppers are already buying products from marketplaces, meaning these online giants already have the benefit of familiarity in the eyes of the customer.

Brand awareness and prospecting campaigns are key to achieving the level of awareness, volume of traffic and quality of visitors required to compete against the Amazon monopoly. Programmatic advertising, in the form of both display ads and video ads, can help brands drive traffic from new and high intent audiences. For brands that successfully activate data to deliver highly targeted advertising campaigns, there is huge opportunity to acquire new customers. It’s as simple as it sounds; brands can’t compete if they don’t have the visitors to convert in the first place. That’s why a strong advertising strategy is fundamental in today’s online retail market.

3. Improve onsite user experience (UX) to match Amazon

Where online marketplaces excel is in the area of personalisation. Let’s take Amazon as an example. They deliver a superior experience across channels with their personalised, connected and streamlined approach. Their website contains product discovery and search with functionality that allows each individual to filter using their preferred criteria. Where they take UX to the next level is through their powerful and personalised product recommendation engine, which drives an enormous 35% of customer purchases onsite. Fortunately, it’s not only Amazon that feels the benefit of personalised product recommendations. Our research shows that brands who deliver more personalised product recommendations see engagement increase by 70%. A no brainer initiative for brands who want to compete against marketplaces and win the hearts and minds of customers.

Brands can improve more than just recommendations to deliver an onsite UX that will tempt visitors to convert. It all comes down to simplifying the shopping experience to make it easier for shoppers to discover products, compare options and make decisions. By focusing on the online journey of every customer at an individual level, brands will be able to deliver more relevant messages and experiences that respond to the wants and needs of every customer.

They can also be using their websites to encourage visitors to subscribe offsite communications, such as newsletters and remarketing. Since GDPR, the value of a subscriber and opt-in has sky-rocketed, with the communications delivered as a result becoming much more targeted and engaging. When brands build this kind of meaningful interaction, they have the opportunity to greatly improve customer loyalty, which is critical in the battle for ecommerce attention.


Whether marketplaces are good or bad, one thing remains; brand must make changes if they want to continue to operate in an ecommerce market currently monopolised by one major player. For smaller brands, marketplaces may be an essential step in the journey, while larger brands may be better off focusing on improving their direct competitive edge to compete. Data activation, brand awareness and personalised onsite UX are critical for any brand looking to win the ecommerce competition.

Ve’s suite of solutions seamlessly connects data, digital advertising, onsite and remarketing to build more relevant and personalised digital experiences, from prospecting to purchase. Find out more about how our solutions could help your brand compete in the today’s ecommerce environment.

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Posted by Emily Atkinson

Emily is Content Marketing Manager at Ve Global.