INDUSTRY COMMENT: BHETA
THE RISE AND RISE OF ONLINE MARKETPLACES
A viewpoint from Will Jones, Chief Operating Officer of BHETA - the leading UK Trade Association for manufacturers, importers, and distributors who operate in the home improvement and garden sectors.
– Amazon, Walmart, and Home Depot. Popular with shoppers for their convenience and ease of price comparison, the increasing number of players in this channel is already a phenomenon. Online marketplaces also appeal to suppliers as a flexible business opportunity with relatively low start-up costs enabling the sale of goods without the need for an online store.
O It seems timely
therefore to look at how this sector is enjoying exponential growth and what the opportunities are for suppliers as a result. To put this in context, by 2027, third-party sales through marketplaces will be the largest and fastest-growing retail channel globally, adding more than $1.3 trillion in sales by 2027 and accounting for 38% of all global retail sales growth and 59% of global ecommerce (source: Ascential). To quote Deren Baker, CEO of Edge by Ascential: “The consumer brands that will be most successful in this new retail environment will align with the right marketplace partners. Moreover, they will optimise their unique capabilities to use all elements of the marketplace. This will be achieved by leveraging real-time data and insights to respond effectively to competitive intelligence, performance blockers and changing market conditions.”
The players The four largest global marketplace leaders of today are Amazon, Alibaba, Pinduoduo and
JD.com. In the UK, the largest are eBay UK, ASOS, Argos, John Lewis, Currys PC World, Zalando, Notonthehighstreet, Boohoo, and Very.
ver the next few weeks BHETA is hosting online events involving three of foremost online marketplaces
in this arena, which is why BHETA is setting up advisory sessions as well as opportunities to network with leading players. I would suggest they are ‘must-attend’ for suppliers keen to get involved in this channel.
America, AliExpress, part of the Alibaba Group, and Flipkart, based in India and owned by Walmart.
But there are many other names worthy of mention: Rakuten, known as the ‘Amazon of Japan’, Etsy, catering to artisans, crafters, and vintage sellers, MercadoLibre, operating primarily in Latin
8 DIY WEEK AUGUST 2023
Advantages and disadvantages for sellers There are many advantages for sellers. Firstly, it is an additional route to market with lower marketing costs than other sales channels. The online marketplace ‘s own brand may well provide a level of additional trust in the seller’s brand and the impartial reviews can be marketing gold dust in themselves. From an operational perspective the supplier can enjoy round the clock trading with availability, prices, and stock levels transparent and accessible in an open environment. Over and above these however, it’s well worth reiterating the export potential of this kind of platform. As I’ve touched on before, export to new markets is now a key opportunity for UK businesses, and online marketplaces provide a way to steer around many of today’s
barriers to international trade. There are also disadvantages. Marketplaces can charge commission on every sale and fees can vary. There may be restrictive terms and conditions in terms of how to communicate with customers, and potentially limitations as to how a seller’s online presence can be branded.
Advice checklist
So obviously good information is key and as a quick rule of thumb, here are the main points to explore when contemplating an online marketplace. 1. Target audience and reach 2. Competition and differentiation 3. Fees and costs 4. Brand control and identity 5. Policies and terms 6. Customer trust and reputation 7. Support and resources 8. Integration and technology 9. Scalability 10. Data insights 11. Long-term strategy 12. Legal and contractual obligations 13. Flexibility to diversify 14. Competitive advantage
Talk to BHETA – dates for your diary Clearly there is no substitute for detailed knowledge and experience
The first is the HIMA Webinar: Doing Business in the USA. HIMA is the international trade association body which BHETA helped to found and all BHETA members automatically belong to HIMA. This takes place on 5th September and brings together Home Depot’s European Sourcing Director, Massimiliano Zampella, with Jon Langford MD of Croydex and a BHETA Board member, and Craig Webb – Owner and President of Webb-analytics.
The webinar with Walmart. com takes place on Thursday 14th September at 2pm. Lane Robertson (Head of Home category) will present, supported by Q&A panellists Mary Alison Lee and Giovanni Sanchez De Leon (Head of Hardlines category).
Then on Thursday 28th September Dhawal Vora and Catherine Moses from the Home category team at Amazon will be available to talk to BHETA members about their platform, the processes, and the opportunities.
Online marketplaces may not be the right route for everyone, but they are certainly on the rise. That fact – plus the export route they present – assuredly makes them worth consideration.
For more information about these events, access to more detailed advice on online marketplaces and for all other BHETA advice and services, contact the BHETA Member Services team on 0121 237 1130 or visit the BHETA website
www.bheta.co.uk
www.diyweek.net
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