26/04/2024
The rise of marketplaces and its impact on e-commerce
One of the factors that undoubtedly significantly influences the dynamics and overall shape of the e-commerce market is the emergence of online marketplaces. During the gala evening, repeated references were made to the significant entry of the Polish marketplace Allegro into the Czech and Slovak markets, as well as the aggressive expansion of Chinese marketplaces such as Temu or SHEIN, or the Turkish Trendyol. Large international and global marketplaces bring strong price competition to the European markets and, among other things, also have a major impact on the cost-effectiveness and efficiency of performance marketing campaigns. After all, Temu is already the largest advertiser within Meta’s services, and among Google’s top five advertisers, according to the Wall Street Journal.
In addition, online marketplaces have brought a new style and standard to online shopping. On marketplaces such as Allegro, customers will find thousands and millions of products across every conceivable category, yet a unified shopping experience, a clearly defined standard of complementary services and purchase security guaranteed by the marketplace itself. Can small and medium-sized retailers even compete with something like this and maintain their own brand and autonomy? Do strong local brands with their own community of shoppers even have a place in the market anymore? The dozens of talented and successful retailers we were lucky enough to meet during the gala evening clearly prove that they do.
Changes in marketing and the pressure to make data-driven decisions
We all know that Czech-Slovak e-commerce is unique and extremely strong even in the European context. This is thanks to thousands of passionate merchants who are constantly pushing the customer experience, nurturing their community and often have their own unique products. In addition, many e-shops are accompanied by an interesting story, a strong social overlap, or a strong erudition in a given specialist segment. This is what they can build on in the coming years, successfully coexist with marketplaces and perhaps also use them as a parallel sales channel to reach new customer segments.
So what are the challenges, that the merchants need to face? The good news is that the e-commerce market is huge. As was mentioned during the evening, approximately 2.3 billion people are currently shopping online worldwide, the most in history, which means that the opportunities are still huge. The negative trend is the lower average customer spend, which is due to the economic fluctuations of recent years, and the rising cost of performance marketing. But these pitfalls can also bring positive trends.
Merchants under pressure are beginning to realise the importance of investing in their own brand, the power of a loyal customer as an element of success, and the importance of building their business sustainably and efficiently. The good news is that the rapidly developing AI and data tools are enabling them to make increasingly informed decisions and base their acts on clear data.
E-commerce champions are committed to service excellence
The use of quality e-commerce services is indeed a crucial factor for merchants to determine success and failure, and the good news is that such services are becoming more and more functional and accessible. We’re talking about data tools and services that help merchants effectively run their marketing, manage inventory or respond to current customer preferences, as well as services directly related to purchasing. The customer experience is dramatically influenced by factors such as speed and accuracy of delivery, or the process of paying for the order, which affects customer conversion, retention, and even return rates. The choice of appropriate payment methods and a secure payment gateway has a major impact on the customer’s trust in the e-shop and their willingness to order or even pay for the goods in advance.
At PayU, we are well aware of this, which is why we bring a payment gateway to hundreds of thousands of merchants around the world that allows shoppers, both on desktop and mobile devices, to pay for their orders reliably, quickly and securely. In doing so, PayU supports a range of payment methods such as card payments, digital wallets such as Apple Pay or Google Pay, BNPL methods, bank transfers and more. With its local expertise and global reach, PayU is the perfect partner for merchants to run their business.
If we look at this year’s winners of ShopRoku in the “Quality Award” category, which we had the opportunity to be a patron this year, we can clearly see that Czech-Slovak e-commerce has really strong representatives who are not afraid to constantly innovate, know their customers perfectly and offer additional services that make them stand out above the competition. If you want to succeed, think about this not only in your work, but also when choosing suitable partners, because every step of the purchasing process counts.
And of course, congratulations to the winners of the other categories of the prestigious ShopRoku: Hugo chodí bos, Ritka v suchu, Mall.cz, Elis Design, Ecolife, Alza.cz and Lidl.sk.