Triumph of the marketplace

Retail after the website

Ana Andjelic
2 min readSep 12, 2024

“Yeah, I think it’s terrifying for people who’ve built brands because [online] marketplaces have this incredibly commoditizing impact as goods sit right next to each other.”

and

“Now, we’re watching the behavior of companies that have tried to pull back from their wholesale distribution channels, and then not too long after, they came running back to them, they realize it’s a lot harder to move this inventory in their own retail in the digital world.”

- Michael Morton’s interview with Ben Thompson

The top five most visited retail websites in the world as are Amazon, Aliexpress, eBay, Temu, and Walmart. They are all marketplaces. Regardless of retailers having to pay for the ever-increasing traffic acquisition costs, Gen Z’s shopping habits, and the cautionary tale of Nike’s DTC-first strategy, most retailers are still spend significant money, time, and effort on optimizing their websites. Websites are regularly political battlefields for corporate lieutenants, settings of misplaced strategic priorities, reflections of organizational power struggles, and confused expectations.

The promise of easy DTC margins is as attractive as it is false. In China, the world’s largest e-commerce market, brand websites are not where consumers shop. Chinese virtual malls, like Alibaba marketplaces (Tmall, TaoBao and Alibaba), JD.com, and Pinduoduo make up 83.6% of the retail e-commerce market, according to research firm eMarketer. The two key drivers of online sales are live-streaming (with 20% of shoppers buying directly from live videos) and instant messaging feeds like WeChat, with embedded mobile payment systems, which are used by 90% of Chinese shoppers.

In the West, mobile app users spend an average of 20 minutes per session shopping on their apps, compared to 10 minutes spent on mobile websites. Mobile commerce comprised 72.9% of total e-commerce sales. Compared to mobile sites, consumers view 4.2 times more products per session in-apps, and they are also guided further down the purchase funnel, with higher sales conversion rate compared to mobile sites, at 3.5% compared to 2%. In-app shopping is especially prevalent among Millennials, with 58 percent mentioning it as their preferred mode of purchase.

For Gen Z, with 98% of smartphone penetration, social media apps are the main source of product searches, brand engagement, product information, and purchase influence. Sixty percent of TikTok’s user base is Gen Z, and it is this generation’s …

Read the rest of this analysis on The Sociology of Business.

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Ana Andjelic
Ana Andjelic

Written by Ana Andjelic

Brand Executive. Author of “The Business of Aspiration.” Doctor of Sociology. Writer of “Sociology of Business.” Forbes most influential CMO.

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