All the world’s a marketplace.
Apologies to the Bard — and some of our high school English teachers — for tweaking that famous line. Yet, when one views the global digital economy and landscape, it’s easy to think that the whole world of retail is, indeed, moving toward a future that will be defined by online marketplaces. Sure, eBay led the charge, and Amazon now dominates, but retailers and service providers of all types are building their own marketplaces — an effort that is also bringing prosperity to various companies that sell the needed software, logistics and payment tools upon which marketplaces run.
How that’s all playing out served as the foundation for a recent PYMNTS interview with Ning Wang, chief business office for PingPong Financial. As he discussed with Karen Webster, the company is riding the global marketplace wave by offering cross-border, supply chain and other payment services to sellers that operate via those digital centers of commerce. The challenges of marketplaces are always significant, largely because of the variety of players involved, and those challenges are especially acute “in a cross-border setting,” Wang said.
As he discussed with Webster, selling via a global marketplace requires not only expertise in local, preferred payment methods, but in different languages, and a specific country’s regulations and infrastructure (which, of course, impact fulfillment and delivery). “Each country has a unique set of challenges,” he said.
In the early days of online marketplaces, eBay, via its success there (aided by the availability of PayPal as a digital payment method), set some solid standards for cross-border marketplace commerce, he noted. The eBay marketplace gave consumers a “sense of acceptance and safety,” a still-ongoing effort overall when it comes to marketplaces in general, he said — an effort that is “about halfway there.”
Consistent service (and the security and trust that come from that) and robust consumer experiences are among the traits that can make marketplaces stand out these days, especially when it comes to cross-border transactions.
Another trend involves payment services borne from the marketplace experience branching out on their own, as PayPal did when it left eBay’s nest. Observers of eCommerce and digital payments have long wondered if Amazon, among the world’s marketplace leaders, will make a similar move with Amazon Pay. As Webster has noted, given that there are 300 million Amazon users worldwide (whose habitual use of Amazon Pay has driven its growth to nearly 40 percent of eCommerce volume), presenting Amazon Pay as an option on merchant websites could attract and convert more browsers into buyers.
For his part, Wang expressed skepticism about that. “I think it’s a trend,” he said, “but it’s very likely to swing backwards.”
What will happen in the coming years within the online marketplace world is something akin to moving out of someone’s house and getting one’s own place — that is, graduating from someone else’s marketplace in favor of one’s own operation. The analogy is that such marketplace operators can, in effect, furnish their own houses instead of relying on items provided or required by other marketplace operators.
An operator might opt to, say, use marketplace software from a Software-as-a-Service (SaaS) provider, such as Shopify (think of that as the meta-platform, Wang said), then add on tools and solutions to round out that operation. As Wang told it, payments is a big part of that experience, as the more comfortable certain consumer segments are with the payment methods offered, the more likely they are to buy and stay loyal.
The fundamental issue in all this, he said, is how to provide what amounts to one-stop shopping for marketplaces — not only for those players in commerce setting up the operations, but for marketplace sellers and buyers, too.
“While Amazon (which started as B2C) has a quality experience for consumers in its DNA,” Wang told PYMNTS, “it started the third-party marketplace with a clear goal of owning all the aspects of the experience.”
That control applies to much more than payments — the consumer data gained during marketplace transactions is another form of treasure in the global digital economy. Benefitting in full from such treasure will require more marketplace investments, and better technology for many — if not most — real and would-be marketplace operators.
After all, if all the world is to become a marketplace, that means consumers will expect those centers of digital commerce to efficiently and securely handle customer service, refunds, quick deliveries, returns and other such matters. Blame Amazon, or the rise of eCommerce in general, or even Uber. Once consumers get a taste of a seriously seamless buying and transaction process, they will never want to go back to a company that doesn’t meet those standards.
The future is bright for online marketplaces, as the interview with Wang made clear. However, the devil is in the details, and there is much that marketplace operators must get right before they can achieve success.