How To Compete With The Marketplace Giants
So you share your Marketplace idea for restaurant aggregation to a few colleagues, and once they get the hang of it, they clarify if your building another Food Panda or an Uber eats. The same applies to all business verticals; Amazon for electronics and clothing, Uber for ride sharing and Airbnb for space rental.
For years, these global players have been dominating the industry driving many small businesses to extinction. The primary aim for these players is: Dominate at all cost. These giants have millions of dollars to burn for marketing and discounts, drying out new businesses.
Let’s look at Amazon and analyse how big a marketplace it is;
What do the marketplace giants have?
*They have more resources to build and update their technology
*More Capital to spend on marketing and promotions
*They don’t have the demanding need to focus on profits
But fortunately, in the digital world, no industry is immune to disruption. We have seen big giants turned down by innovative and smarter innovations and technology.
The right mix of the product idea, the methodology and with the right backing startups can bring down tech giants. The goal is not to look to capture the entire globe but focus.
Create your niche, target Un-tapped and Underserved segments
Let’s take the footwear industry for example. Break this industry into different use cases; a good start would be to start a marketplace for only football shoes. Study the competitors and find out what they offer and what they have missed out. This will help you become the go-to store for this target audience. Once you crack this segment, you would have valuable data regarding the customer insights, the market trends and most importantly ‘Brand Recognition’. With these, you can expand your product line and start selling in other segments as well.
Note: Once you have identified and defined the target segment, estimate the size of this market, which will give you an estimate of your revenue potential. If this segment is not big enough and does not hit your targets then further analyse and choose another segment.
Focus on Uniqueness and Exclusivity
The best is to start by selling is by bringing unique and exclusive products in your marketplace. Take Etsy for, eg. they focussed on vintage or handmade items. Start with your own brand or a locally manufactured brand that is out of reach for the global players. Brands like Nike, Adidas and Levis are crowded in the global marketplaces. Matching their price cuts and promotions is not a successful game, and these brands are too happy to provide free services to these marketplaces in exchange for the number of orders they bring in.
E.g. People are mindful about Global warming and Temperature rise; plastics are banned in most regions. Manufacturing and selling bags made of Jute or textile, taking advantage of the raw-material source in your area will help in creating a niche for your marketplace.
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Use the home field advantage
The local market or the home field advantage is often overlooked. You have significant powers of playing in your own territory.
- Your Speed to Market is quick.
- Easy to gather customer feedbacks
- A better understanding of the local customer trend
- Local relationships with your vendors
When selling products in your local geography, logistics and distribution involved in your business is not a worry. With shipping and logistics sorted, the onboarding of sellers in your platform also comes out smooth as local sellers trust, and customers trust people from the same region, speaking the same language. The home field also gives an advantage in collecting feedback from customers.
Differentiate with better services
Any product/service is rated good from average only based on the service factor associated with that particular product. To win customers, provide the service better than your competitors. The differentiation can be in delivery, packaging, after-sales or customer service.
Speed not fast
In this digital era, all we hear is “Change is fast”, and companies have to change quickly. The digital world is continually changing, and companies are adapting to all sorts of fads. If you’re in a space where technologies come and go quickly, a due analysis must be made before adopting the change.
Once the pros and cons of the new technology are listed out, and the decision is made then the adoption should be made quickly.
90% of the time the customers you are trying to acquire would have signed up or purchased from another marketplace. To turn this customer loyal to your platform, personalisation is important. With the innovation in technology, data is abundant. Simple gestures like using the customer’s name in the notifications and packaging would create an impact.
Indeed it is incredible to win in all battlefields but start with a niche segment, try to win over and then build your customer base, unnoticed by the global players. Create a Brand awareness, set your own trend and keep growing.