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Authored by Dinesh Gulati, Chief Operating Officer, IndiaMART
Marketplaces have been there for centuries, acting as the heart of community, helping artisans, farmers and small businesses. However, in the last couple of decades, the fast evolution of online marketplaces has completely changed the significance and relevance of the term MARKETPLACE.
Digital transformation of businesses to better serve the customers is no longer a piped dream for Indian enterprises. India, having a large number of MSMEs, adoption of technology and digital marketing remains the biggest opportunities for us and that’s where online marketplaces act as the biggest enabler. The online marketplaces have been able to create a thriving ecosystem, opening new vistas of growth, previously thought impossible.
Online marketplaces have become an integral part of our business community be it B2B or B2C, enabling micro, small, medium and large enterprises in multiple ways. For fashion & apparels – Myntra, beauty & skincare – Nykaa, Purple, B2B business discovery – IndiaMART, ready to eat food -Zomato, Swiggy and many more, there is an online marketplace flourishing for every need.
Most of these marketplaces work on freemium model. With low or no entry barriers, businesses start selling online without any hiccups. By showcasing their products on large marketplaces, businesses get a huge opportunity to expose their products to existing customer traffic, this in turn helps them optimize their marketing spends significantly. Being present on an online marketplace gives businesses a wider reach, much beyond their local geographies. IndiaMART offered 2.5 crores unique business inquires in Q1FY25 through 19 crores registered buyers it has on the platform, thereby opening unparalleled business opportunities for its sellers.
Marketplaces often provide tools and services that significantly augment tech and digital capabilities of businesses. Powered by the use of AI’s enhanced search capabilities, dealing with misspellings, using multiple languages, and supporting voice-based searches, they also understand and process ‘Hinglish’—a mix of Hindi and English- and get the precise search results for users, reflecting how marketplaces are now a powerhouse of digital capabilities.
AI-powered tools are revolutionizing catalogue management with features such as automated image editing, background removal, and cropping to make product cataloguing more efficient and enhance the visual appeal of listings. This technological advancement promises a more engaging and visually appealing e-commerce landscape, opening new possibilities for marketers and enthusiasts.
AI based Behavioral matchmaking and presence of consolidated marketing strategies can support businesses in streamlining their internal business processes via tools such as CRM, accounting software, product testing, lead generation, analytics and complete customer experience (CX). IndiaMART’s lead management system allows sellers to manage all their conversations with buyers in one place efficiently, using AI-driven suggested replies, and boosting conversion rates.
Over the years, online marketplaces have evolved into a one-stop destinations for businesses and consumers entailing all the key operations, such as inventory management, payment processing and shipping logistics, making it easier for them. Marketplaces typically offer analytics tools that help businesses understand customer behavior, sales trends, and inventory management, helping them to make informed business decisions.
Mobile first approach has significantly changed consumer habits and buying behavior. Almost 60% of consumers prefer their mobile devices for shopping, leading to an exponential rise in mobile commerce. India has a dynamic audience demographics and sizeable businesses operate from tier II and III towns. For all such businesses, marketplaces’ plug-n-play model becomes handy. Besides creating visibility and digital enablement, these marketplaces offer built in trust for the businesses amongst their customers. The ecosystem offered by marketplaces is democratizing the opportunities for MSMEs, helping them to create scale, cost efficiencies and lead them to sustainable growth path.
Research by Forrester highlighted that unlocking the digital technologies with a customer-centric approach can lead to 60% higher customer win rate. The power of digital can be truly seen in how actively marketplaces are integrating AI into their daily operations.
As India’s techade takes shape, more and more investments in digital marketing strategies are expected to create a stronger digital footprint and influence the purchasing power of business buyers. McKinsey Global Institute reported that companies that are leaders in digital adoption, experience a 25% increase in gross margins. With digital being the ‘buzzword’ for the next decade, businesses will drive their expansion process using online marketplaces for external presence and leveraging artificial intelligence for internal processes.
Moving towards a digital future:
The extensive use of digital technologies is already acting as a force multiplier in India’s economy and helping B2B sector compete domestically and globally with greater efficiency. Nasscom’s report – ’Digital Enterprise Maturity 5.0: Digital Readiness in the Era of AI’ highlighted that 71% of enterprises in India spent over 20 percent of their tech spends on digital in 2023 and are looking to increase this spending further on AI, data analytics and cybersecurity. This underscores the increasing role of On-line marketplaces in making the business doing easier, effective and more efficient
It is no surprise that online marketplaces can play a pivotal role in the digital journey of enterprises. This reflects in Bessemer Venture Partners’ report that projects online-first and technology-enabled B2B marketplaces category of startups as a $200 billion market by 2030. The launch of Atamnirbhar Abhiyan, Digital India, Startup India, Mudra Yojna, GST reforms and multiple payment solutions coupled with increasing tech savvy customers, are making strides to ensure faster digitalization of businesses in India. And in this evolution, these marketplaces are not mere additions of new features; rather they are acting as a key catalyst in transformative digital journey of businesses.
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