Top 5 digital marketplace trends in 2021 that you should know

Online marketplaces are experiencing rapid growth across various sectors, including e-commerce, e-learning, food service, healthcare, FinTech, and insurance. Bringing together vendors with consumers, marketplace solutions allow users to make orders and payments without leaving the system.

Providers of goods and services, in their turn, receive access to a large audience without the need to build their e-commerce websites and launch costly advertising campaigns for customer attraction. By matching organizations and their clients in one place, the owners of an online marketplace platform generate profit through monetization, for instance, a subscription-based or commission strategy.

Thanks to this business model, marketplaces like Amazon, Etsy, Airbnb, Uber Eats, Upwork, Coursera, Udemy, and Zocdoc gained worldwide popularity. According to Digital Commerce 360, sales on top marketplace websites s"uch as Amazon, Alibaba, and eBay valued at 62% of web sales made globally last year. Analysts also revealed that the world’s leading marketplaces were able to sell nearly $2.7 trillion in 2020.

Aiming to meet changing consumer demand and stay competitive, organizations in different industries focused on digitizing their processes and boosting online presence. The COVID-19 has accelerated this movement, evoking a wave of marketplace startups and contributing to the increased popularity of the existing projects.

In this article, we will consider the main digital marketplace trends for 2021 to discover the best investment opportunities. Let’s get started.

The key digital marketplace trends for 2021

1. Online vertical marketplaces

The fast growth of online vertical marketplaces is among the primary online marketplace trends for 2021. A vertical marketplace belongs to a certain category or industry.

For example, AngelList connects startups with angel investors while also helping job seekers to find employment. Houzz is a home renovation and design platform that brings together homeowners and experts enabling customers to find the necessary professionals and make online purchases.

Vertical marketplace development can be an excellent investment opportunity if implementing a project properly: ensuring a seamless user experience, choosing the right monetization strategy, creating an engaging design.

When targeting a specific niche, it is much easier to stand out from competitors and attract the audience, the more so as giants such as horizontal marketplaces Amazon and AliExpress offer a variety of products that align with pretty much every taste and budget.

As a result, now the demand for online vertical marketplaces is growing. In 2020, Etsy—an online e-commerce marketplace providing vintage and handmade goods—increased by virtually 100%.

App downloads of Cortilia specializing in grocery delivery rose by 139% last year. A marketplace startup MilkRun that matches local farmers with restaurants and customers managed to raise $1.75 million in 2020.

2. Personalized recommendations

Personalized service is another important digital marketplace trend in 2021. Experts at Forrester found that 77% of the survey participants preferred, recommended, or spent more with a brand that offered personalization.

By providing recommendations tailored to the needs and tastes of a particular customer, vendors significantly improve user experience, increase loyalty to their brands, and boost sales.

With the view of achieving these goals, an organization can deploy machine learning or data analytics algorithms that will monitor and analyze user activities, for example, purchases that have been made via a marketplace website or application.

To implement this functionality, a company should turn to a trusted software engineering firm specializing in online marketplace development and data analytics solutions. By now, numerous popular marketplace platforms have enabled personalized advice, involving Amazon and eBay.

3. Marketplace mobile apps

The average US adult spends 3 hours and 43 minutes on their smartphones while most people check their mobile devices 58 times a day. Popular activities involve online shopping, food ordering, online booking, digital training, consultation, and payments for various services.

This results in the rising demand for marketplace mobile apps aiming to address these customer needs. While application downloads in verticals like housing and hospitality decreased due to the COVID-19 outbreak, sectors such as education, grocery, and on-demand food delivery saw exponential growth.

Dealroom reports that the number of mobile app installs substantially increased across multiple industries:

  • Online education marketplaces — Preply (284%), Google Classroom (266%), ClassDojo (126%), Remind (103%).
  • Grocery, meal kits, farm-to-table delivery marketplaces — Cortilia (139% ), Ocado (99%), La Ruche qui dit Oui! (53%), Picnic (65%).
  • On-demand food delivery — Grubhub (23%), Deliveroo (21%), Uber Eats (13% ), Postmaes (10%).

If you want to create an online marketplace like Uber Eats, explore what features you should implement, how much time software development may consume, and what budget you should have.

4. Artificial intelligence chatbots

The rise of artificial intelligence chatbots is among the main digital marketplace trends for 2021. By incorporating an AI-based conversational tool, an online marketplace platform assists vendors in boosting user engagement and increasing sales.

A trained AI bot can replace humans in tasks such as answering frequently asked questions and common inquiries while ensuring client support. Since an AI-enabled chatbot can simultaneously process 24/7 numerous requests, response waiting time can be reduced from hours to seconds.

Employees, in their turn, can focus on more complex operations. As AI bot development does not require a lot of time and money compared to sophisticated software creation, the demand for this solution significantly increased over the past years. Research and Markets informs that the global bot market is forecasted to climb from $17.17 billion in 2020 to almost $102.3 billion by 2026, at a CAGR of 34.75% during the indicated period.

Analysts confirm that conversational chatbots help organizations achieve excellent results. According to Invesp, businesses can cut down expenses on customer support by 30% thanks to this technology.

Experts at MIT Technology Review discovered that 90% of businesses report faster resolution of complaints as a result of AI bot integration. With the view of gaining a competitive advantage, marketplaces are incorporating chatbots into their apps and websites. Famous online marketplace platforms have already adopted them, for instance, Alibaba, eBay, and Uber.

AliMe, an e-commerce bot used by Alibaba, processes millions of incoming queries per day. During the Double 11 shopping festival that took place in 2017, AliMe managed to respond to 9.04 million requests. Making use of natural language understanding, this tool serves as a shopping guide and personal assistant.

To improve client satisfaction, Uber launched a chatbot that lets users register with one click and book a ride in Facebook Messenger without installing a mobile application. Powered by Uber’s API, the bot allows for easily tracking ride receipts and status updates in a private conversation with Uber.

5. Business-to-business marketplaces

B2B marketplaces are seeing fast growth across multiple domains, including e-commerce, healthcare, FinTech, and insurance. Amazon Business, Thomas, Global Sources, and eWorldTrade are examples of online B2B solutions.

While a business-to-consumer platform is the most popular model at the moment, business-to-business marketplaces offer lower competition. However, the COVID-19 pandemic has become the key driver since 2020 for more online transactions carried out via B2B marketplaces.

Digital Commerce 360 found that around 59% of B2B clients made at least 25% of their corporate purchases on marketplace websites and applications last year. Analysts also revealed that 23.5% of B2B customers use online B2B marketplaces to buy 50%-74% of enterprise products and services.

Forrester informs that B2B e-commerce transactions are projected to value $1.8 trillion by 2023. As long as marketplaces contribute to facilitated procurement, automated sales, and optimized order management, the demand for them will continue to increase after the end of coronavirus.

Conclusion

The popularity of online marketplace platforms will continue to rise, since they provide multiple benefits for all stakeholders : customers, vendors, owners, and investors. Before building marketplace software, you should identify the targeted users, involving their issues and preferences.

It is also important to conduct competitor analysis to explore how you can stand out from them. While B2C marketplaces have high competition with giants like AliExpress, eBay, Coursera taking the center stage, making a B2B or a vertical marketplace can be an excellent investment opportunity, especially for aspiring startups.

However, it is possible to find an opportunity even in such popular fields. For instance, you can launch a marketplace targeting a certain audience and then gradually extend the system and enter new markets.

If you are thinking about creating a marketplace website or application, you can contact the team at Arateg. The company has extensive experience in online marketplace development and is ready to provide a project consultation for free.

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