E-commerce on marketplaces: choose an international or local platform?2022-09-20
Online marketplaces are taking an increasing share of the e-commerce market in the Baltic States. There are international names such as Amazon and eBay, as well as the growing local marketplaces such as Allegro.pl and Pigu.lt. What are the biggest challenges for marketplaces, how to choose between an international and a local platform, and many other questions will be answered at one of the biggest e-commerce conferences and exhibitions Ecomexpo’22, which will take place at the Vilnius Exhibition Centre Litexpo on 29 September.
Why do local marketplaces win in their markets?
Katarzyna Rosa, Senior Education and Merchant Development Partner at Allegro.pl, the online trading platform sponsoring the conference, says that in those markets that have particularly strong local online trading platforms, they tend to dominate compared to the global players. “Good examples are Bol.com in the Netherlands or our own Allegro.pl in Poland, which are ahead of the global powerhouses in their markets. This is because local marketplaces really know their customers’ needs, take the time to build trust, take into account local customers’ challenges and make the relevant and necessary changes to make their customers’ e-businesses thrive,” says Rosa.
According to Allegro.pl, while the big global online platforms open up large swathes of new buyers, it is easier to stand out and get noticed on local ones: “On local online platforms, new e-sellers do not have to compete with millions of other sellers and still have a sufficient customer base and traffic to reach their sales targets.
Is it worth combining local and international marketplace trading?
Katarzyna Rosa’s opinion and insights is supported by Raimondas Žilėnas, Head of Pigu.lt marketplace, who says that the advantages of Pigu.lt compared to global marketplaces are that buyers can be served in the local language, and that sellers’ issues can be resolved much faster.
“Marketplaces benefit from the fact that they already have a huge customer traffic. 66% of all visits to e-shops in Europe are on online shopping platforms. Customers want to find everything in one place, get their goods quickly and use the payment and delivery methods they prefer. This explains the popularity of marketplaces”, comments Žilėnas.
When asked whether it makes sense to combine local and international marketplaces, he argues that it is not only valuable, but also necessary to achieve maximum results: “Our key differentiator is our knowledge of the Baltic market. That’s why sellers who sell on other marketplaces join us for our Baltic clients. We have a good knowledge of the Baltic e-commerce market, requirements, regulations, and are well-known and trusted brands in Lithuania, Latvia and Estonia with a large loyal customer base. However, we only operate in Lithuania, Latvia and Estonia – this is our strength and uniqueness. We are the only and largest marketplace in the Baltic States. We are only 3 years old, but we already have more than 4,000 sellers, and we expect our sellers’ sales revenue to reach EUR 100 million next year. The numbers are impressive and only confirm that the global trend of marketplaces is gaining ground in the Baltic States.”
What is the difference between payments in local and international marketplaces?
When it comes to eCommerce exports via marketplaces, one of the important questions to ask is whether there are differences between trading on international and local platforms in terms of payments? Dovilė Bansevičienė, Head of Funds Management at SEB Bank, says that there is a variety of payment methods available to e-commerce marketplace participants, but their popularity varies across European countries.
“For example, in the Baltic countries, the most popular online payment method is the Bank Link service and payment initiation, while in Sweden and the UK, card payments dominate. Therefore, companies wishing to increase customer loyalty and sales in any market need to take into account a variety of factors to best match their payment options with the expectations of consumers in those markets,” says D. Bansevičienė, SEB Bank expert.
According to her, it can be concluded that local marketplaces are well aware of how their customers like to pay and usually offer a wide range of payment options: on-site payment when you come to pick up the goods in person, bank transfer, e-banking (payment initiation or Banklink services), bank card, buy now pay later, cash, etc. Global platforms, on the other hand, usually only offer a few payment methods: card payment and digital wallet.
It should be stressed that there is no single best payment method that works for everyone. Local payment preferences vary from country to country, so it is important for a merchant wishing to expand internationally to analyse the available local payment methods and offer them to customers in that country. You also need to consider that the reach of your products will be significantly higher on a global sales platform and that local e-shops will mostly only be available to buyers in that country.
One of the largest e-commerce conferences and exhibitions, Ecomexpo 22, formerly known as E-Commerce, will take place on 29 September at the Litexpo Exhibition Centre. The exhibition will also be webcast. Tickets for the live participation and the webcast are available online.