Online marketplaces are here to stay

This article was published in the Nov 2012 edition of Retail Today magazine.

Every Wednesday, a plethora of vendors with bright and shiny make shift stalls converge at a street near my house. The street gets transformed into a busy bazaar cramped with people, mostly ladies, who leave no stone unturned to extract the best price from the vendors. Groceries, household items, garments, shoes, toys, ice cream everything under the sun is for sale. All of us have visited such market places for our weekly household shopping.

Can this idea of collective selling by vendors to a community succeed online?


How does a market place work? Gather some vendors, who have a commodity or a service to sell, organize a “space” where they can set up shop, have a strategy to attract a community and Voila! You have a market place. If you are the owner of such a space, you charge a fee from vendors for setting up a shop. The vendors who set up shop are happy paying the fee as they are servicing a volume of customers. The customers in turn get to select the best product at the best price (the art of bargaining was perfected at such places). It is a sweet deal for all the stake holders.

In 1993-94, Pierre Omidyar, a French-born Iranian American software developer launched an online market place called AuctionWeb. The business model essentially was the same as the street market place. The “space” was a website, the vendor and the buyer was virtually anyone with an internet connection. Anything from broken printers (that was actually the first item sold) to luxury yachts were up for sale. AuctionWeb was later christened eBay. Over the years eBay has grown to be the world’s largest online marketplace today. It has presence in 30 countries with 102.4 million active users (as of Q1 2012).


eBay set an precedent for the online world to embrace the market place model. Post success of eBay, a lot of ideas were introduced which were wholly or partially based on a market place. I came across some interesting market places that merit a mention;

Pow… How?

Online learning through webcam has been made a sellable commodity at A seller can create an online webcam session exhibiting anything from Guitar lessons, Make up lessons, Origami to cooking lessons can be taught. The sellers (‘teach classes’) decide their own content, timing and price for the class. The buyers (‘take classes ‘) choose from different categories like Art, Beauty, Crafting, Cooking, and Fitness what class they want to take up and pay to join the class.

Vayable Travels

A common problem faced by the travelers visiting a new place is the availability of reliable local guides who can deliver an enriching site seeing experience. This is where comes in. It allows the guides and the travelers to connect online. The guides list their experience, fix the price, duration and content (perhaps a tour of the Taj Mahal?) of the tour and travelers book a tour and pay online to be a part of a guide’s tour. The remarkable feature about is that it has incorporated the traditional flea market place setup where vendors and buyers actually meet in person and develop a business relationship outside the market space.

One for the taste buds

The recipe is simple. Take food products, build an online community around it, stir it up a little with blogs and stories around the food, and you get Foodzie.  Started as an online venture by Emily Olson, Rob LaFave, and Nik Bauman in 2009, it operates as an online market place for food products. Recently Foodzie was acquired by Joyus which is an online video sales platform. The idea was to offer the users an enriching experience of shopping for food products through video. Will Foodzie change the way we consume and shop for food? The odds are clearly in its flavor!


Compared to the west ecommerce is relatively a new occurrence in the Indian market; however the road ahead seems to be promising. Last month Flipkart, India’s largest online store, registered 2 companies – Flipkart Market Place Pvt Ltd and and Flipkart Payment Gateway Services Pvt Ltd. It is still not clear whether the market place will be launched as new site or as an add-on feature to the existing site. In August 2012, Snapdeal launched its ‘Brand Store’ and took the later route of adding it as a feature to its site. It has about 3000 brands and is projected to reach 10,000 brands by the end of 2013.

Other active players in this space include Tradus, ShopClues and Craftsvilla which have a substantial customer base in India.


Can online market places recreate that old world charm of a local street market place and reach the global community? As is demonstrated from the examples of online market places that I discovered, I firmly believe that in due course of time with the right mix of ideas and innovation, the online market places can achieve this milestone