2018 RETAIL ASIA-PACIFIC TOP 500
OV E R V I E W
Understanding trends
in digital marketplaces
in Asia-Pacific
T
he marketplace model in digital commerce is
transforming the industry in Asia-Pacific. In 2017,
sales through a marketplace totalled USD291 billion,
and accounted for 46% of all digital commerce sales,
up from US$13 billion and 26% in 2008 — a share gain of 20
percentage points.
350000
Alibaba capitalised on China’s increasing connectiv-
ity, but also did a lot to improve the shopping experience,
especially in payments and delivery. It continues to build
out its ecosystem with its New Retail strategy, and has
expanded its reach in the region through acquisitions,
mainly Lazada.
250000
Top Marketplaces in
Asia Pacific 2013/2017
200000
150000
100000
50000
0
2008
2009
2010
2011
Marketplace Model
2012
2013
2014
2015
2016
2017
Traditional Model
In 2017, sales through a marketplace totalled USD291 billion, and
accounted for 46% of all digital commerce sales.
300000
Alibaba’s rise in Asia-Pacific is tied firmly with the rise of the
Chinese Internet retailing market. China surpassed Japan in
Internet retailing market size in 2012, and grew almost 25 times
as fast in the subsequent five years.
Market Sizes l Historical
400000
Alibaba reigns supreme
200,000.0
180,000.0
160,000.0
140,000.0
120,000.0
100,000.0
80,000.0
60,000.0
40,000.0
20,000.0
0.0
Alibaba
Why is the marketplace model growing so
quickly?
The marketplace model is growing faster than the traditional
model thanks to network effects. A network effect is when the
value of the service increases as the number of users grows. The
marketplace builds a customer base which attracts third-party
merchants. The aggregation of third-party merchants creates a vast
product selection. The vast product selection creates competition,
leading to lower prices on marketplaces. The selection and low
prices attract more customers, which attracts more third-party
merchants.
Marketplaces offer more than just
shopping
The five largest marketplaces in the world (Amazon, Alibaba, eBay,
JD.com and Rakuten) have built ecosystems that keep consumers
and third-party merchants spending time and money with them.
For consumers, these marketplaces offer some form of
entertainment and social media. They also offer payment solu-
tions for customers that can be used at other retailers and in
some cases, offer financial services, such as credit
The marketplaces take advantage of the opportunity
to sell services to the merchants on their platforms. All of
them have robust offerings when it comes to fulfilment,
advertising and financial services.
JD.com
Amazon.com
2013
Rakuten
eBay
2017
Note: Sales through the marketplace model only; only business
to consumer sales
What does the future hold for retailers
and the marketplace model?
Retailers with a marketplace model continue to improve to meet
the needs of both consumers and third-party merchants, building
on the existing network effects. As a result, the marketplace model
will continue to gain share in digital commerce. If a retailer does
not have a marketplace, it needs to determine its course of action:
build one, join one, or partner with one.
For retailers that will not embrace the marketplace
model, it will need to have strong differentiators to com-
pete against the price and selection of marketplaces. Three
main differentiators are loyalty programmes, merchandis-
ing and experiences. Loyalty programmes keep the retailer
top of mind for shoppers. Exclusive product and curated
assortments can lure customers. And overall, the retailer
must offer a great experience whether its online or in store
to drive traffic to the retailer.
— Report by Michelle Grant,
Industry Manager, Retailing.
Retail Asia June/July 2018
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