Markets have existed for ages. As civilizations evolved, they quickly became the core of all trade, human interactions and cultural intermingling. Marketplaces critically served as a multi-dimensional medium of trade of information as well, with that information flowing beyond the walls of the markets.
From the open-air markets of Babylonia, to the four-story forums of the Roman Empire, and then to the gigantic malls of today, markets have undergone great change in their physical forms.
Over the last few decades, they have also morphed digitally. And have grown very quickly. For most of those years, we’ve had two-dimensional marketplaces.
First came the listing of products, then search of products as large digital marketplaces blossomed, such as Amazon, eBay and the like. Then we had marketplaces that matched consumers and service providers – Uber & Ola for instance. Airbnb does both, match and list. And now we are seeing the evolution of market networks.
Marketplaces with networks effects
The above examples are digital marketplaces that build on network effects – each new rider on Uber adds more options for the consumer, each new seller adds more choice for the buyers, each new BnB listed on Airbnb gives the guest one more option, and vice versa. With every new member the virality and value of the product amplifies manifold.
Growing literature has thus far broken down marketplaces in terms of:
- B2C – Amazon, Google Play Store, MakeMyTrip etc
- B2B – Ali Baba, IndiaMart & Amazon overlaps this one
- C2C – AirBnb, Uber, Fiverr etc
And also in terms of managed on unmanaged marketplaces:
- Managed – Where the marketplace assures complete quality – say the Urban Company in India which attempts to standardise all home services it provides, or what Oyo attempts to do by standardising the hotel experience across non-branded small / boutique hotels
- Partly managed – Where there is some level of marketplace involvement – example Airbnb or Uber where verification checks are required, assistance may be provided for home photography
- Unmanaged – Where anyone can sign up and get started after some basic registration processes, eg Upwork or Fiverr
Today, there’s another more critical way of looking at digital marketplaces – horizontal and vertical. Traditionally, we’ve seen more of horizontal marketplaces with Amazon, eBay or Fiverr etc clubbing all product or service categories together.
Verticalisation on the Internet
A growing trend over the last few years has been the verticalisation of marketplaces and the further infusion of network effects.
Sitting in Jaipur, India – a city that was founded about 270 years ago – verticalisation seems like a familiar concept to me. Even at the time when Jaipur was founded, the physical marketplaces of the city were well marked and verticalised.
Jaipur’s old main bazaars till today have specific lanes well known for different products and services – there’s Thatheron ka raasta that’s home to craftspeople who work with metal and specialise in making brass metals, Haldiyon ka raasta that’s famous for jewellery and silverware and even a Ghee walo ka raasta that was home to people who specialised in ghee, butter and other dairy products. There are many such lanes that house marketplaces for specific goods.
This verticalisation of physical marketplaces is not unique to Jaipur. London, for instance has had the Borough Market for centuries now, known for being the city’s largest and oldest food and farmer’s market.
And as modern policy makers picked on the many advantages of verticalisation, most of the world's industrial zones or special economic zones build on this scheme of clustering similar businesses & connected marketplaces.
Verticalisation of marketplaces is thus not a new concept in itself, and it has developed as marketplaces evolved. For digital marketplaces, verticalisation is thus like natural progression.
The world’s first focused marketplaces have thus emerged – say Etsy that started with a focus on handmade goods, or AngelList that began with the aim to connect people interested only in startups - founders, investors, job seekers.
Many of today’s largest Internet companies started as vertical networks as well. Most famously Amazon went from being a marketplace for books to arguably the world’s largest horizontal marketplace.
The same verticalisation has since spread to social networking as well. While Facebook dominates social networking, we also have GitHub for coders, Behance for designers and many smaller networks like the Perspectives on International Relations for world politics enthusiasts & experts, powered by MainCross.
What’s next for the digital marketplace?
The Grand Bazaar of Istanbul is often cited as the oldest continuing marketplace in the world. It was purpose-built and construction started in the mid 1400s.
In how it continues to attract visitors, satisfy consumers and grow businesses, it may hold some cues for growing and sustaining the digital world’s new marketplaces – market networks as experts like James Currier call them.
While the growth of Istanbul and lot of other factors like geography contributed to the market’s longevity, a lot of the credit must also go to the intentional design of the structure in how it allows verticalisation of smaller markets, promotes seamless community interactions and makes for easy discovery and trade of goods while amplifying its network effects.
As digital marketplaces evolve and social networks get verticalised, we are beginning to see a coming together of social and commerce on the same platform in ways that our digital world has never seen.
Large social platforms have been looking to incorporate commerce features for some time now, just as vertical marketplaces are now looking to add social elements.
Facebook began experimenting with the Facebook Marketplace in 2015, and Instagram now allows businesses to add multiple product details and links within posts.
At the same time, job marketplaces like Apna have dedicated channels for social interaction for job seekers to stay in the loop of what’s the latest in their industry, share stories, ask questions etc. MakeMyTrip incentivises consumers to post their pictures and stories of their trips booked via the platform to add a social component for discovery and engagement.
Community-led marketplaces
With listing, search, verticalisation & management of digital marketplaces acknowledged, it’s the social or community score of the marketplace that is also becoming critical for their growth, especially to harness the latent network wealth of their consumers.
Let’s go back to the Grand Bazaar of Istanbul for a moment. Consider this:
- the Bazaar has close to 3,500 shops, providing immense choice for consumers
- it has 21 gates providing multiple entry points that allow consumers to come in from wherever they like
- there are marked streets & maps with product categories, allowing verticalisation to suit specific consumers & businesses
- there are meeting points, inns & restaurants along with the streets that allow for social interactions, and ease of flow of information
- there’s security & maintenance that ensures the environment is safe & friendly
- the physical transactions are humanised in how the buyers & sellers interact, adding to the experience and creating brand value for the respective business & the market
- the architecture, design & shopping experience is photography worthy to the larger audience
Translating that into the four pillars of a thriving digital market network, there’s:
- Content: Texts, audio, video – the products at the shops, the display, maps, boards and the talk around the products. Content also becomes a key entry point to the market, you can enter from any side
- Community interactions: Not just the interaction between buyers & sellers while transacting, but also the social score – the useful chatter you pick up when you enter a market – most of which is available free, along with the reputation of the shops & other people that you can gather. Community may felicitate directed entry points as well, via shared referral links.
- Commerce: Easy & direct transactions that benefit consumers & businesses - creating a seamless & safe shopping experience
- Workflows: The verticalisation of the market, placement of inns or spaces for general community chatter, brand promotions, engagements & more features that ease the experience
All of these then come together to build the network effects & brand value of the market network. And so those are the four key pillars of our work at MainCross as well - seamless content management features paired with all you need to build a thriving community that you can own, control & administer easily. Commerce and transactions are enabled and pre-integrated via partners as well, while custom workflows can be added as desired under our managed services.
And that’s what today truly captures the meaning of the phrase social commerce platform.
From commerce via social media
Social commerce is not merely using social media channels for selling goods online.
It’s also about harnessing network effects for commerce and community growth while providing a frictionless shopping experience on the same platform – from discovery of product to the transaction.
In essence, social commerce the true coming together of marketplaces and social networks, that then make up market networks.
To commerce & social media
While market networks add value to all product categories on marketplaces, they may add more value for some products and services than others.
Especially products & service categories that require more human interactions have the most to gain as they adopt the approach and philosophy of market networks.
The primary reasons for that are:
- Reputation matters: When people look to avail certain services, the reputation of the service provider matters. It’s not so much so when buying a product. When the product is standard, where you buy it from does not matter much. You can buy a standard pen for work from anywhere, or from anyone. But when you hire an architect, a lawyer or a teacher, it’s not so straight-forward. Offline, reputations are pieced together via word of mouth, news & updates, direct interactions and by locating past work. Online, they still remain scattered. It’s on market networks that the profiles of service providers, reviews, their updates and posts, badges and highlights come together to provide an objective & transparent reputation, empowering consumers to make the right choice.
- Services require workflows: After finalising the service provider, the completion of most services consists of a back-and-forth process of refining the requirement, performing the transaction, working on drafts, improving the task item and then providing closure with the final output. These require special workflows.
It’s via vertical market networks then that the nuances of product & service discovery, interaction and transaction come bundled in one platform, clubbed with the reputation of businesses, service providers & consumers and the power of network effects.
There's more value to each new customer when a new service provider joins, more business for service providers when new consumers are on-boarded.
This also further incentivises businesses and service providers to build their profiles and reputation by updating their works, sharing their insights and publishing their views. All of these activities aid product and service discovery.
This is very much what the Grand Bazaar of Istanbul continues to provide, via its purpose-built design and multi-dimensional flow of information & commerce.
The market networks of the future will thus benefit from technology design & infrastructure that is purpose-built to bring together all those pieces of content, community, commerce & workflows; technology & channels that encourage multi-dimensional & personalised flow of users, information and trade.
The evolution of market networks has already begun and they are now bound to provide more distribution, branding & visibility to smaller businesses and empower individual service professionals across industries.
In doing so, market networks also serve as a movement that re-humanises the world of e-commerce.
MainCross-powered market networks in the making
Above-mentioned are some of the benefits that AltHealth – a social network and marketplace for people who struggle with chronic health issues – is reaping.
Powered by MainCross, AltHealth has built a safe and trusted environment for people to share their stories, solutions and support while empowering the community.
Adding to those features, it has also brought in partner brands that offer their products to the AltHealth community on the AltHealth platform. It goes a step further by enabling users to share content, co-sell and earn commissions via our partnership with Shoptype.
Another vertical social commerce platform that’s growing fast is Veed – an integrated content, community & commerce destination for the cannabis industry in the US.
It’s what the consumer wants
The leap from static online marketplaces to engaged market networks is also being propelled by the pulls of changing consumer behaviour.
New consumers, especially millennials and the later generations want to be more involved in what they purchase. They want to interact with the brands they buy from and be heard by the service providers they avail services from.
There is also greater trust in online reviews from strangers. Or perhaps, there are no strangers when you can get more than a glimpse of the person's profile and reputation online.
With both these crucial constituents of digital markets – consumer behaviour and intermediating technology – evolving, businesses are poised to take back more control of the consumer’s journey. From discovery of content, intent of purchase to transaction, followed by retention by engaging them more authentically - all on their own platform.
Build your platform or buy the best
Brands like Glossier in the US are already championing the media to market funnel by building their own technology platform. More direct to consumer brands are likely to follow that direction.
The insight they have is that while product discovery in the new digital world remains cross-channel, the long-term winners will be the businesses that own most of their respective high-stake channels.
It's only by focusing on their own platform can they retain their voice, build an authentic sense of belonging, keep direct channels open and always have a sharp understanding of their core consumers.
This doesn’t mean the giant social media networks of today will go away all of a sudden. They likely won’t, but their monopoly is set to be disrupted.
Now while big businesses may adapt and build their own platforms, they will always require the right expertise.
And small businesses will need support and guidance that arms them with the same technology superiority at affordable pricing.
With MainCross, those are the growing gaps we fill – expertise on how to build the next wave of vertical networks & social commerce platforms, and the technology capability that helps businesses transform their markets.
By providing platform-as-a-service in a bundle, MainCross is empowering many businesses & professionals by giving them the advantage of the latest technology at their fingertips. It's easy to use, doesn't require coding and platforms can be jump-started in minutes.
That’s exactly why Jeff Dennis of AltHealth has chosen us. In his words, “MainCross is fantastic! It allows AltHealth to offer a full range of social media functionality right out of the box. It allows us to have as many dedicated channels as we like. Finally, I’ve found their customer support to be first rate.”
If you’d like to launch your own focussed market network – no coding and easy to manage, contact us here.
