Last updated: 29 November 2016
Marketplace platforms present a high performing sales channel that should be taken into consideration by online retailers operating in Brazil.
Marketplace platforms present a high performing sales channel that should be taken into consideration by online retailers operating in Brazil. In this article we will provide an overview of marketplaces on major e-commerce websites in Brazil and list useful practices for offering products through this sales channel.
Status of Marketplace Platforms in Brazil
Integrated marketplace platforms have for some years been a staple in the revenue streams for the world's largest e-commerces, and in recent years have also become a commonly adopted feature for Brazilian online retailers of various sizes.
Contrary to other territories, the Brazilian market is not dominated by a single player in the e-commerce sector, but rather by a number of large-sized retailers who make constant efforts to gain the preference of the local consumer audience. The strategy to integrate marketplace systems is especially beneficial in this environment due to the strong competition between each website, as the offering of a larger variety and quantity of products can provide a definitive edge over the competitors.
While large stores benefit from a wider selection of products and reduced stock to be managed, marketplaces also allow less popular merchants to be granted greater visibility for their products, due to the thousands of viewers accessing these websites on a daily basis. Vendors registered with marketplaces are also given access to advanced marketing and payment processing systems from large stores in order to boost the amount of conversions for their offered items.
Currently all of the major e-commerces in Brazil, including websites Submarino, Extra.com and Netshoes, have integrated marketplace platforms, which presents a notable opportunity for smaller retailers. Recent reports from discount platform CupoNation indicate that each one of these websites receives upwards of 10 million monthly accesses, and a survey from 2015 by price intelligence firm Sieve discovered that close to 20% of all e-commerce purchases fulfilled in the country during that year were products offered by partner vendors in marketplaces.
Registration at Marketplace Platforms
The process of registering with marketplaces from major e-commerce websites in Brazil includes a number of steps that vendors should be aware of. There are multiple ways to take part in these marketplaces, including handling the process manually by submitting a registration form and integrating the marketplace API, and it is also possible to contract the services of specialised integrators who offer streamlined systems for vendors to register with multiple marketplaces simultaneously.
One aspect of the registration process that should be taken into consideration are the extensive list of documents that some of the largest e-commerce marketplaces require for vendors who intend to take part in their platforms. These documents are mostly related to the company’s information and financial status, and might create impediments for stores who are not yet legally established in Brazil. There are cases of marketplaces that have started to accept the introduction of foreign vendors, which is the case of Brazilian players Extra.com and Pontofrio.com, but most of the largest marketplaces in the country are still limited to accepting national vendors with proper documentation and legal status.
During the integration procedure, it is a common practice for many Brazilian marketplaces to submit vendors to a selection process that assures the quality of their commerce systems and customer services in order to evaluate their potential as a relevant partner to the marketplace environment. Brazilian e-commerce analysts state that marketplaces are more favourable to accept vendors that offer products that are hard to keep in stock, including large sized items like furniture and home appliances, and also those that offer high-selling products such as consumer electronics.
Many marketplace managers will also evaluate the quality of the vendor's’ customer services through the amount of complaints posted on outlets such as social networks and specialised complaint websites, as an effort to ensure that their introduction will not harm the marketplace’s reputation.
Managing Marketplaces as Sales Channels
The successful registration with a major marketplace in Brazil can lead to sizable growth in the amount of conversions, and vendors should be prepared in advance for the increased demand for their products. One of the main aspects that should be taken into consideration when operating in marketplaces is stock management, as the information regarding the products availability needs to be immediately exchanged with the marketplace platform in order to be correctly displayed to customers and avoid errors in purchase fulfilment.
Specifically in the case when items are offered in multiple channels, such as physical stores, proprietary e-commerce websites and marketplaces, it is recommended that vendors implement in-depth stock management systems to control product availability and submit this data to each sales channel efficiently, and therefore avoid potential conflicts.
Another recommended addition to e-commerces that take part in marketplaces are channel management systems, which are able to not only facilitate the setting of characteristics such as pricing or purchase conditions for different sales channels but also optimise marketing strategies for each of them. Marketplaces and proprietary online stores can have different consumer profiles, to the point that a product’s sales conditions can be customised for each channel in order to enable it to reach the highest potential sales performance.
E-commerce Platform Providers
Partners such as Digital River can provide your online store with robust e-commerce platforms, offering advanced solutions for aspects such as payment capture, marketing and business management.
Digital River’s proprietary marketing analytics and sales channel management systems allow stores to boost sales performance through the comprehensive analysis of market conditions and efficient operation of multiple simultaneous sales channels.