Are you building an e-commerce site like Lazada? Shopee? Is having your own e-commerce website still relevant?
“What is e-commerce” is searched on Google an estimated 10,000 times per month. By Wiki’s definition, e-commerce is a commercial transaction conducted electronically on the internet. In 2017, e-commerce was responsible for around $2.3 trillion in sales and was expected to hit $4.5 trillion in 2021, according to a Statista report. On average, millennials now make 54% of purchases online, and this number will only increase over time as people are becoming more technologically savvy and business are providing convenient logistic solutions. In this article, we will give you more insight into what is e-commerce and why you should own one for your business.
Marketplace vs. Specialize E-commerce
There are two categories of an e-commerce website, and they are broken into the marketplace and specialize e-commerce web. A marketplace is defined as an e-commerce site where products are provided by a number of different third-party sellers and are processed by the marketplace operator. This is a kind of e-commerce platform for businesses to sell their products online without the need for creating their own e-commerce site. Marketplaces like Lazada, Shopee, eBay, or Mudah created a convenient platform for small businesses to set up their digital store with the marketplace handling the online transactions for you. Most marketplace even offers shipping and logistics services for their sellers. From the sound of it, a marketplace seems like the perfect place to set up your online business, but keep in mind with all these services, comes charges. Depending on the marketplace, some charge a percentage of all transactions made, and some even have yearly renewal fees to maintain your online store. Whereas specialize e-commerce sells a specific type of products on their website. Specialize e-commerce is an original platform that you host, build and design yourself, drive traffic to your website, and handle all the sales and processing yourself. Specialize e-commerce is like your own virtual storefront where you’re conducting your business online.
How do revenue and profit work on e-commerce?
If you’re in a marketplace like Lazada, they make profits based on the product that you sell on their platform, and they earn commission on each sale by 3rd party sellers on their platform. The commission varies based on the product category. Whereas If you own the e-commerce site, 100 per cent of the profit will go to your business. Profit-wise, it is definitely better owning an e-commerce website rather than being a part of a marketplace. Having to said that, a presence in both marketplace and e-commerce would further increase your online presence.
Online Traffic marketplace vs. specialize in e-commerce?
Many e-commerce struggles to generate traffic when they have launched their websites. Issues they have trouble getting the traffic to access their e-commerce store would demotivate online business after having to spend time building a beautiful site with a great product that they believe would benefit the customers. Unlike marketplaces, who’ve already garnered the traffic and brand awareness, they’re able to provide a higher chance of reaching more customers compared to specialized e-commerce sites. That said, specialize e-commerce sites can tackle this problem through digital marketing strategies such as Search Engine Optimization and Search Engine Marketing. Businesses like 11street, Lazada, and Shopee already have a vast network. They invest heavily in their digital marketing and have accumulated an extensive network with an excellent track record of customers that 3rd party sellers can leverage. With their substantial investment in digital marketing, it is easier for them to generate traffic. Growing your web traffic is not hard, but once you have people visiting on your website, your site will take off. There will always a piece of pie for everyone on the internet.
Increased Your Market Reach
A statistic from practical e-commerce shows that small retailers may see up to 30% higher mobile conversion rates compared to large retailers. An eCommerce website will give you the opportunity to reach out and offer your products and services to customers around the world, regardless of the distance and time zone. Customers will have the convenience of purchasing your products at any time that’s convenient for them. Another significant upside to owning an e-commerce business is that you would not lose out on sales because your business would be running 24 hours without the need to hire employees to tend the store. Potential buyers are more likely to make purchases when they can place their order instantly, rather than waiting for a regular store to open.
Better communication online.
Physically communicating with your customers takes a lot of effort and time, and having an online store makes things a little easier as you can display all your product information on your site. Although human interaction might be reduced, the process of making a purchase will be faster and more efficient on e-commerce sites. These days customers appreciate the convenience of online shopping more than spending hours browsing a physical store, people are now making purchases over the Internet during free time. Having your own site also gives you a platform to educate your customers on your products by including a section for blogs to explain further or share the benefits of your products.
Digital Marketing Influence
With 56.8% of the world having access to the internet, having an online store coupled with digital marketing can help you expand your brand and increase previously untapped market. Much like how your physical store would require marketing and exposure to raise brand awareness, a digital store provides a more accessible platform for you to market your business. If your website is equipped with e-commerce, the process or purchasing a product is just a click away. Showcasing your product online will increase the sales opportunity, it can show to the audience why is your product suits them. Having your website SEO optimized will increase the chance for your website to rank top on search engines like Google. Promotion through social media platform also will be easier as you can lead traffic from the platform to your site. Keeping your website active will drive more traffic to your business.
Having both an e-commerce site and marketplace will definitely be beneficial to your business. It is something that every business should consider if they’d like to expand their growth. An example of companies that fail to adapt to the digital market is Blockbuster rent-a-movie retail who failed because of services like Netflix which offers the convenience of not having to go to a shop to rent a movie physically. Another example would be Toys R Us who have been losing market share to smaller businesses who’ve capitalized on the selling toys online, which makes it easier for busy parents to buy toys for their kids. If you’ve read up until this part of the article, we’re guessing you want to adapt to the digital market as well. Drop us an email where we will guide you on building your first e-commerce website. To answer the question in the title of this article, yes, online e-commerce is still relevant.
There will always be new ways to strategize your digital branding, so we’ll try our best to keep you updated on the trends. If you like this article, you will love our other articles, check us out at KodeDigital.Expert. If you haven’t already, follow us on our social media and stay tuned to tips and tricks on all things digital.