Online marketplace spend to reach £40bn within five years
today Nov 5, 2019
While multichannel retailers continue to struggle, online marketplaces like Amazon and Asos are thriving, with spend set to rise by £13.1 billion over the next five years, according to new data.
With vast inventories and convenient fulfilment options, it’s not hard to see why consumers are choosing online marketplaces over single vendors.
According to GlobalData, a leading data and analytics company, UK online marketplace spend will rise by 50.1% to £39.3bn by 2024, posing a bigger threat to retailers that choose to sell exclusively on their own sites.
Meanwhile, multi-brand online platforms and retailers selling third-party brands such as Next stand to benefit from the rise, the report said.
“General merchandisers Amazon and eBay dominate the online marketplaces market and are forecast to account for over 90% of spend in 2019 as their reputations, huge product ranges and fulfilment options (in particular Amazon Prime) make them the first port of call for many shoppers,” said Emily Salter, retail analyst at GlobalData.
Pursuit of newness
The market intelligence company has also found that spend on brand new items will rise by 53.9% over the next five years - a much faster pace than spend on second hand products, which is forecasted to grow by 29.8% over the same period.
But changing interests are driving growth in the clothing and footwear sector, with second hand retail expected to become more important as consumers prioritise cost and sustainability.
Young shoppers in particular seem to be the most eager to buy clothing and footwear that has less impact on the environment, as well as at a lower cost, however there is still a general pursuit of frequent ‘newness’.
And despite growing concerns surrounding sustainability, spend on second hand products is forecast to make up less than 20% of total online marketplace spend this year.
“Growth in the second hand market will be driven by sites dedicated to resale – in particular Depop, which looks and functions like Instagram with an intuitive and attractive app design that appeals to young digital natives,” Emily Salter explained.
“The presence of unique and often vintage items, lower prices, and the concept of ‘social shopping’ appeal to 16-24 year olds and are alternatives to the ubiquitous model of fast fashion and big brands. Additionally, unlike many online marketplaces, Depop is perceived as a fashion destination, which is a huge contributor to its success.”
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