Online marketplaces to reach $7trn sales by 2024
Written by Peter Walker
Online marketplaces could be worth as much as $7 trillion in sales by 2024, should organisations capitalise on the full potential of the marketplace trend.
This is according to analysis from financial services advisory firm iBe, which noted that marketplaces currently contribute $1.7 trillion to the economy each year, with e-commerce accounting for as much as half of sales annually.
This predicted rise will be driven by more companies embracing marketplaces as the best platform to facilitate online sales, expedite cross-border expansion, increase product range and improve logistics, costs and operations.
Generally, marketplaces fall into three broad categories: business to business (B2B), business to consumer (B2C) and peer to peer (P2P). Currently, over half (56 per cent) of European marketplaces are global companies like eBay, Amazon and Alibaba, but there is also significant local marketplace choice in Europe, and the local platforms’ market share is continuing to grow as they build customer bases amongst domestic and international consumers.
B2B marketplaces, like Alibaba in China or Conrad in Germany, present the biggest growth opportunity, according to iBe. Currently, only $600 billion - 7.5 per cent of the annual $7.9 trillion worth of online B2B sales - are made via marketplaces. The analysis predicted that this figure could reach $12 trillion by 2024, with B2B marketplaces’ share of online sales growing to 30 per cent.
Similarly, iBe forecasts that B2C marketplaces, which form the most developed sector led by Amazon, Rakuten, Deliveroo and others - is currently responsible for $1.1 trillion of marketplace sales - could be worth an estimated $3.5 trillion by 2024, accounting for over 70 per cent of all online B2C sales.
P2P marketplaces such as eBay or Airbnb are the best known to consumers, but are significantly lower in sales volumes than the other two categories, due to the nature of their business. Current P2P marketplace sales represent 60 per cent of that category’s overall online sales and are presently at $30 billion. In iBe’s estimation, these types of marketplaces are expected to generate over $240 billion by 2024, accounting for 90 per cent of overall online P2P sales.
Masha Cilliers, specialist payments partner at iBe, said retailers can build global sales via an existing marketplace platform and can broaden their range of products quickly by allowing third parties to sell via their website, rather than scaling up in-house.
“But before companies can fully embrace the marketplace evolution, there are still challenges that need to be overcome – regulation and payment processing, for example, can often be the biggest barriers to entry.”