Possessing a vision of utilizing marketplace technology to improve the greater good, Singapore-based Software-as-a-Service Arcadier strives to achieve so through a collaborative shared economy. To kickoff Arcadier Inspire, a virtual summit and competition for online marketplaces, Kenneth Low, Chief Commercial Officer and Co-Founder of Arcadier, discussed the growth of online marketplaces and provided valuable personal insights on the future of online marketplaces.
Growth of Online Marketplaces
Otherwise known as the digitalization form of commerce, online marketplaces consist of many sellers and many buyers trading simultaneously.
The birth of online marketplaces occurred in the period of 1995 – 2009 with the proliferation of the Internet. Starting with 12 – 24 million online stores, this spurred the emergence of giant horizontal global online marketplaces like Amazon and Ebay.
After the 2008 Financial Crisis, this posited a fundamental shift in consumer behavior. People now realized that they need not own the item to derive its utility. This thus spurred the growth of an emerging sharing economy. The years of 2010 – 2015 also saw the increased growth in mobile device usage – so much so that mobile commerce was expected to flourish till it accounted for 50% of all ecommerce spending by the end of 2018. To combat this growing demand, marketplaces chose a vertical approach to complement the speedy search and filter results that consumers wanted. This ultimately led to the major shifting of trends from horizontal to vertical marketplaces, whereby most marketplaces now served either a particular industry or a particular service.
Fast forward to 2018 today, marketplaces have eventually taken on the characteristics of being hyper-local and hyper-vertical. Recognizing marketplaces’ dedication to a specific city or specific use-case, Arcadier saw the untapped potential of marketplaces as a form of utility.
Therefore, Arcadier’s product of online marketplaces seeks to digitalize traditional ways. By eradicating the traditional middleman, Arcadier endeavours to drive efficiency of discovery, encourage pricing competitiveness, increase ease of transactions and maximize resources. Drawing inspiration from other global marketplaces, Arcadier’s goal to democratize marketplaces for the greater good never strayed far. For instance, Indonesia-based Tanihub directly connects farmers with end consumers, rendering the typical corporate middleman unnecessary. As such, product prices are more transparent – farmers earn more whilst consumers save more and the overall economy is enhanced.
Future of Online Marketplaces
Do you think marketplaces will end up monopolizing?
With recent news of peer-to-peer ridesharing company Uber choosing to exit the SEA market and consequently selling its assets to fellow rival Grab, it is natural to worry if these trending online marketplaces will eventually become a monopolized commodity. Fret not, laughed Kenneth as marketplaces are ultimately dependent on their use-cases. If a marketplace is hyper-vertical and serves a sole service, it is unlikely for it to consolidate with other marketplaces as their consumer base remains unique and independent.
Will Physical Marketplaces Become obsolete?
Humans fear what we do not understand – technology being one of them. However, online marketplaces rendering physical marketplaces obsolete is not yet deemed an urgent cause for concern. Consumers and their preferences still play a vital role in ensuring the continuity of these physical spaces – typically gaining this competitive edge via a characteristic that technology cannot (yet) provide. For instance, customers traditionally prefer the ‘touch and feel’ aspect of retail shopping, an element that technology is unable to replicate. Therefore, Kenneth believes that specific industries, like retail, that is built upon the consumer’s choice and preference will at most, enter a hybrid marketplace providing both online (payment) and offline (trying on of clothes) experiences to shoppers.
Disruption of online marketplaces & its impact on online services
The impact of the emergence of online marketplaces on online services is probably one that is most beneficial to the economy and society. With online marketplaces comes increased discovery of services. This increases economic value since consumers are now exposed to a wider variation of services and are better able to specifically request the service they have in mind. Alternatively, the outsourcing of volunteer services or charity services could also be made available on online marketplaces. For instance, the possible creation of a shared platform for volunteers to choose their available hours and later run errands for the elderly or disabled then could increase societal welfare. This is accomplished through the improvement in the disabled’s standard of living and promotion of civic-mindedness.
Words of Advice
Gathering from his expertise as Arcadier’s Co-Founder and his past position as PayPal Asia Pacific’s Head of Strategy and Business Development, Kenneth has a few tips for those aspiring online marketplace owners:
Starting with a clear mind
Throw away the misconception that an online marketplace is an online shop – it is not. As mentioned earlier, an online marketplace consists of many buyers and many sellers – two groups of people that could either make or break the success of your marketplace. Therefore, Kenneth suggests to ‘own’ either group. If you have connections with various suppliers, you would ‘control’ the supply side of your marketplace, making it easier for buyers to gain interest in what you have to offer. Likewise, if you possess a steady stream of buyers, sellers will be attracted to your marketplace due to this reliable stream of demand.
Kenneth also cautions against the intangible complexities a marketplace has. Dispute resolution, ensuring the legality and credibility of your marketplace products and sellers are just scratching the surface of the many troubles you will face as an online marketplace owner.
“Start-ups are really really hard.”
You should definitely have the grit to see through the high times and low times. Likening the experience thus far to be that of an emotional roller coaster, Kenneth still believes in the emotional reward of starting up – whereby the conversations you will have and people you will meet is unlike that of when ‘stuck’ in a corporate job.
We all need a little something to keep us going through tough times – for Kenneth, that will be his team at Arcadier. The team’s passion and driven nature inspires Kenneth to be a better worker and leader – to help everyone along as best as he can, to drive Arcadier’s vision of doing the greater good.
Watch the entire Arcadier Inspire Summit talk by Kenneth Low here