The vital need for marketplaces in omnichannel strategy of Asia

The evolving customer of today and their buying preferences have played a hand in how brands think disruptively and where they position their products. The internet savvy shopper has motivated brands to delve deeper into their retail strategy.

In the west, brands primarily focussed on their own retail channels like their own mono-brand online or their own brick and mortar stores. Unlike the West, where the mail-order catalog business well existed before eCommerce and consumers were used to buying through that channel, the essential infrastructure to support that channel (though not as evolved as today for eCommerce) always existed like the last mile logistics and payment method.

However, in Asia, marketplaces such as Flipkart in India and Lazada in South East Asia built the foundation of the ecosystem on which the current e-commerce landscape is thriving in this part of the world. Retail, in most of this emerging market, was still underdeveloped. As a result, these online marketplaces filled that gap and due to superior customer service built a trust with the customers in the local market.

It is no surprise that in most of these markets, these online marketplaces are bigger than the traditional retail chains both in terms of traffic and business. This makes it absolutely imperative for brands to include marketplace in their omnichannel strategy. In fact, marketplaces now contribute more than 50% of the global online retail market. Brands can no longer focus only on their own controlled retail channels if they look to expand their horizon and increase their consumptions across channels. It’s time the brand thinks customer and not the channel.

Brands are faced with some critical decisions while selling on marketplaces, and the concerns they face are:

1. Scalable technology: They need an ever-evolving platform which can scale and evolve with the rapid changes in the space

2. Brand safety: Making sure the content and catalog is ‘Brand Right’

3. Expenses incurred to operate on marketplaces

As customers want to buy choices that maximize their time and lifestyle, brands are broadening their reach by going directly to the consumer even on third-party platforms like marketplaces. Marketing the brand through the brand website is just not sufficient anymore. Brands should leverage the captive audience that online marketplaces have to offer and thus weave it into their Omni-Channel retail strategy, along with physical stores and online brand store.