The Marketplace Dilemma - brand loyalty or market reach

Written by Max Riis Christensen, March 2024

Explore the dilemma between marketplace expansion and the vital role of webshops in building lasting brand loyalty when we dive into the good and the bad of the world's biggest marketplaces. 

From Vinted to TikTok – the rise of specialised marketplaces

Marketplaces are dominating the online shopping landscape in Europe, and their influence is set to expand even further, diversifying across various niches. From Vinted for second-hand treasures to Alltricks catering to cycling and outdoor enthusiasts, the market is experiencing a substantial increase in specialised platforms. Notably, established brands like Paul Smith are embracing unexpected avenues, such as Shein, signifying the evolving dynamics of online retail. 

Perhaps most intriguing is the rise of TikTok, now rivalling Amazon in terms of traffic. The App is known to popularise and inspire purchases, with 2 out of 3 users inspired to buy something they saw on the App. With TikTok Shop and Fulfilled by TikTok, TikTok essentially serves as a one-stop shop for e-commerce merchants looking to sell their products through the app – a compelling challenge to the e-commerce giant, Amazon.

Pitfalls - the costs of lost connections

While expanding a business using marketplaces can seem like the obvious road to growth, a cost-effective entry into new markets or access to a vast customer base, it also introduces challenges. One of the main challenges is the loss of ownership of one's customer relationships. When a customer purchases a product on Amazon, Amazon owns the e-mail address and other personal information of the customer, not the brand owner. This makes retention and building brand loyalty very difficult.

Beyond marketplaces - the importance of your webshop

Amidst this complexity, operating a localised webshop remains crucial. Marketplaces often lack the personal connection that customers seek when aligning with a brand's values - and may not inherently reflect a customer's preferences. 

Through our work with hundreds of webshops over the years, we know the most successful businesses to be those who listen to their customers and optimise their shops according to customer feedback. 

Your webshop is more than just a transactional platform; it's a key player in shaping your brand story. Here, customers can truly connect with your products and values, and if they like what they experience, they will come back - and you have ultimately cultivated the ever-important brand loyalty. 

To Amazon or not - the starting guide 

If you are considering expanding your business to Amazon, we have created a comprehensive guide to help you decide on your next steps, help you understand Amazon’s commission structure, the Amazon seller or vendor set-up and much more. Get your Amazon Guide right here.