Vertical Marketplaces: The Future of E-Commerce?

Are you tired of scrolling down many product listings on e-commerce websites?

If so, keep reading because it’s time to discover the benefits of selling and shopping on vertical marketplaces that are now on a constant rise. In this article, we will explore the rise of vertical marketplaces and explain why they are expected to be the future of e-commerce, but first things first, let’s start with the definition.

What is a Vertical Marketplace?

A vertical marketplace is an online platform focused on a particular industry or audience which provides a more customized and relevant shopping experience for consumers.

The Rise of Vertical Marketplaces:

E-commerce retailers like Amazon and eBay have dominated the industry of online retailing for several years now, yet the situation is about to change fastly thanks to the rise of vertical marketplaces, as there are good reasons why vertical marketplaces may be trending at the moment such as:

Increased e-commerce adoption: With more consumers shopping online, there is a high demand for marketplaces that connect buyers and sellers in a convenient and efficient way.
Increased competition: As the e-commerce market has become more loaded, there has been an increase in competition among marketplaces.
Customer demand: The growth of vertical marketplaces may also be explained by customer demand as they become more likely to find the products or services they are looking for.

What is the Difference between Vertical and Horizontal Marketplaces?

An online marketplace for buying and selling construction equipment would be a vertical marketplace and on the other hand, horizontal marketplaces are online platforms that offer different products or services to a wider audience.

These horizontal marketplaces are not focused on any specific audience, as it is the case for Amazon, eBay, Ali express, and Jumia. These marketplaces offer products and services that appeal to a broad range of customers.

Examples of Vertical Marketplaces in Europe:

Marketplaces can be either horizontal or vertical, depending on the products or services they offer, as trends can vary depending on the location, industry, and other factors. However, there are some trendy famous vertical marketplaces in Europe like:

ManoMano: This online marketplace was founded in 2013 to provide home improvement and gardening products and is currently present in France, Belgium, Spain, Italy, and the UK. ManoMano Marketplace has a network of over 1,000 professional sellers, who offer their products on the platform.
Zalando: This marketplace is a German online fashion retailing platform that was founded in 2008 and has since had over 41 million active customers and employed over 17000 people. Zalando is present in several European countries, including France and Italy, as well as the United States and Russia.
Asos (short for “As Seen on Screen”): This is an online fashion retailer based in the UK, founded in 2000, and is present in over 190 countries worldwide including the US, Australia, France, Germany, and China. In addition to its own website, ASOS also operates several other online fashion stores, including ASOS Marketplace and ASOS Outlet.
Go Sport: As of 2021, Go Sport had over 600 stores in 13 countries, France, Spain, Italy, Belgium, but also the United Arab Emirates. The sports company has a strong focus on customer service and offers a number of services in its stores, such as personal fittings and repair services.

What are the Benefits of Vertical Marketplaces?

These marketplaces proceeded with different product selections and marketing efforts to appeal to customers’ specific needs and interests in one platform. In addition, the high level of competition in the e-commerce industry has led businesses to seek ways to evolve themselves and stand out from competitors.

There are several benefits of vertical marketplaces that sellers can take advantage of such as:

Targeted audiences: Vertical marketplaces allow sellers to reach a high reach rate of buyers interested in specific products being offered. This can help sellers to attract more qualified leads and potentially increase sales.
Cost savings: As vertical marketplaces are focused on a specific industry, they may be able to reduce costs through economies of scale.
Brand image: Sellers may be able to enhance their own reputation within the industry. This can help to build trust with potential buyers and increase sales.

Overall, vertical marketplaces can offer a range of benefits to sellers, including industry expertise, enhanced reputation, and customer support.

Vertical Marketplaces: The Future of E-Commerce?

As technology continues to advance, more and more players are beginning to embrace the power of network effects and the opportunities that come with it.

We are now able to connect with target audiences and build a strong and engaged online community and emphasize the power of word-of-mouth marketing. In addition, technology provides real-time data analysis and the ability to quickly adapt to market trends.

Vertical marketplaces will play a significant role in the future of e-commerce. As more consumers turn to online shopping, the need for specific products will only increase, and sellers will have the ultimate opportunity:

To think smart and creative
Offer more innovative marketplaces

And the reason behind this growth is that vertical marketplaces may be able to offer a more personalized shopping experience and this will consequently increase customer loyalty and satisfaction, as well as sales.

However, there are also some challenges that merchants may face when using a vertical marketplace:

High Competition: As vertical marketplaces are focused on a specific industry, sellers may face more competition from other sellers within the same platform or marketplaces. This can make it more difficult to stand out and attract customers.
Dependency on the marketplace: By selling on a vertical marketplace, the sellers will become dependent on the platform for sales. This can represent a real challenge for sellers if the marketplace faces any legal or logistic issues that affect sellers’ ability to sell and deliver the products.
Sales and subscription fees: Many vertical marketplaces charge fees to sellers in order to sell on the platform. These fees can vary widely from one marketplace to another, could be monthly or annually, and result in a significant cost for sellers, especially if they generate a high volume of sales by the end of each quarter.

If you are looking to drive sales and you need more visibility on vertical marketplaces, get to know Lengow’s marketplace offers.

Name of the Author: Abla Kabbaj

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