E-marketplaces have proven their staying power in Asia-Pacific, according to the new Asia 500.
Asia is a series of diverse national online retail markets, each with its own distinct audience of web shoppers and at its own stage of e-commerce evolution. But if there is a theme that recurs in many of the biggest Asia-Pacific e-commerce markets ranked in Internet Retailer's newly published Asia 500, it is the preeminent role of the online marketplace as opposed to individual retailers selling on their own behalf.
Some numbers from Internet Retailer’s newly published 2013 Asia 500 help to illustrate the point.
Marketplace companies in Asian e-commerce have a long history of developing an early base and array of services that keep customers coming back. In China, Alibaba launched Taobao Mall undercut eBay, by charging merchants no fees or commissions. Alibaba earns revenue from advertising on Taobao and other services it offers merchants. A range of services such as AliPay, a payment program that offers shoppers protection against fraud, has helped Taobao attract consumers—Alibaba claims 500 million registered shoppers on its marketplaces—and build up a base of about 6.6 million merchants.
When Rakuten rolled out Ichiba in 1997 Rakuten ended the year with six merchants. But over time Rakuten has updated Ichiba with a series of initiatives such as diversifying into travel services beginning in 2001 and rolling out mobile commerce in 2005 to appeal to Japanese consumers who were early adopters of web-enabled mobile devices. Today Ichiba has more than 38,000 registered merchants and expects its gross merchandise volume to exceed $20 billion in 2013 and eventually to exceed $100 billion, the company says. “The Japanese market is not mature in terms of Internet shopping penetration—not nearly to the level of the U.S.,” says Rakuten chairman and CEO Hiroshi Mikitani. “There is still lots of room to grow in particular categories.”
Marketplace companies in certain Asian countries have become preeminent e-commerce players because they have evolved into comprehensive “one-stop support service and shopping centers” for buyers and sellers, says Julia Q. Zhu, founder of e-commerce research firm Observer Solutions and a former Alibaba employee. “Once online users grow accustomed to an online shopping site and as long as the online marketplace continues to evolve with their needs, then users have little incentive to switch,” Zhu says. “Over time the brand loyalty leads to a concentrated user base, which is hard to compete with. In Asia, this can result in a dominant marketplace in some countries.”
In New Zealand, Trade Me, which grew 13.8% to Internet Retailer-estimated sales of $119.4 million in fiscal 2012 from $104.9 million in the prior year, continues to expand its marketplace by adding new categories such as automotive and updated mobile apps. In South Korea, eBay, which acquired Gmarket in 2009 for $1.2 billion, has expanded the e-marketplace to such new markets as Japan and Singapore.
Because many marketplaces in the Asia-Pacific region are now mature and highly diversified, they will remain big and influential e-commerce players for the foreseeable future, says Forrester vice president and Asian e-commerce analyst Zia Daniell Wigder. “Marketplaces appeared on the scene relatively early in their respective markets and they all moved aggressively to build market share,” Wigder says. “Consumers became accustomed to turning to these marketplaces and they will continue to play a sizable role in consumers' online shopping.”
For the first time, the Asia 500 is available in three formats: print, digital and as part of the all-new and completely updated Top500Guide.com. Information on how to order the brand-new 2013 Asia 500 Guide is available here.