Sponsored By Market Defense
Amazon.com has long been the predominant marketplace platform for beauty brands. However, in recent years, as the US Amazon marketplace has become more competitive and advertising and logistics costs have escalated, brands have begun to venture beyond Amazon’s US platform.
There’s a compelling reason to look globally. Statista Global Insights estimates that global marketplace revenue will hit $5.6 trillion by 2027. Nearly $570 billion of that massive global consumer spend will be focused on beauty, health, and personal care brands. This growth in global marketplaces is being driven by the increasing global popularity of online shopping across all demographics, the expansion of e-commerce into hard-to-navigate new markets in East Asia and LATAM, and the increasing availability of online payment in those markets.
The outlook for global e-commerce marketplaces is favorable.
Marketplaces are well-positioned to capitalize on emerging trends that beauty brands are paying attention to at home, offering opportunities for more learnings and more leverage of business and operating strategy:
The rise of mobile and social commerce. Mobile devices are becoming the primary way that people shop online. This is driving the growth of mobile-friendly e-commerce platforms and apps. The same is true for social commerce platforms that are primarily accessed through mobile devices.
The increasing importance of data analytics. Data analytics is becoming increasingly important for e-commerce marketplaces. By analyzing data, marketplaces can better understand their customers and their needs. This information can then be used to improve the customer experience and increase sales, particularly when data is leveraged across marketplaces.
The increasing regulation of e-commerce. Governments are increasingly regulating e-commerce in response to concerns about consumer protection, fair competition, and tax evasion. As a result, e-commerce marketplaces are focused on compliance with the growing number of regulations. This regulatory environment levels the playing field for global businesses that can meet standards and creates advantages for those able to address the regulatory complexity.
While there are hundreds of global marketplaces, just a few dominate the majority of global spend.
While the United States drives approximately two-thirds of Amazon’s $500B Gross Merchandise Value (GMV), the company operates in 200 countries and provides access to global expansion with a footprint heavy in Europe and parts of East Asia. Top international markets include Germany and Japan.
The Alibaba Group includes China-focused TMall, a Chinese C2C marketplace called Taobao, and Lazada in Southeast Asia. The B2B portion of its business generates $100B in GMV.
Although smaller than any of the TMall properties, China-focused Douyin is an important social media marketplace that generates $30B in GMV. It is growing rapidly.
Mercado Libre is dominating e-commerce in LATAM by developing payment, supply chain, and merchandising tools to attract top sellers across 19 countries. While global GMV is just under $20B, its 25% current and projected growth rate makes it very attractive to brands gaining traction in its key markets of Mexico, Brazil, and Argentina.
Brands entering these marketplaces find meaningful benefits.
There are also a number of risks associated with selling on global e-commerce marketplaces.
There is a path forward.
When evaluating selling on global e-commerce marketplaces, there are several important considerations beauty brands can take to develop a successful strategy.
Global marketplaces represent an exciting opportunity for brands to extend revenue and global awareness while bringing together new insights that could enhance many areas of their business. Executing a true global marketplace strategy is not simple nor quickly done. However, when done deliberately, with the right supporting structure and strategy, it can drive meaningful value for a brand.