Global Data projects expect the global online market to grow at a CAGR of 6.5% between 2022 and 2027 on the back of easing inflation and retailers’ ongoing investments in their online perspectives. Statistics reveal that the e-commerce market in the US will surge past $1 trillion by 2023.

The online channel will make up 29.3% of total apparel sales which it adds is only 0.9 ppts higher than the share it reached in 2020 and stands as a testament to the “enduring appeal and benefits of stores. However, a new report by Global Data’s Global Online Apparel Market project has warned fashion brands and retailers face four key challenges that could inhibit growth.

• The online marketplace is a fast-changing model where products, services, prices, and creative’s update is changed frequently. Doing so on multiple platforms manually is an uphill task.
• Providing customer support and keeping track of agreed-upon terms with multiple marketplaces is difficult.
• Lack of backend technology can create a large amount of manual work.
• Tracking and dealing with counterfeit products from suppliers and frauds is necessary but difficult without technology.

The aforementioned challenges should not prevent one from going online. Businesses must recognize their growth potential in a digital marketplace.

• Convenience: The marketplace model has eliminated any entry barriers for a business to reach its customers. Businesses no longer need large investments to manage physical stores and warehouses. Most marketplaces offer fast onboarding and assisted promotion to boost sales.
• Global outreach: With an online digital marketplace, your business can sell its products and services anywhere in the world. You can target a specific country or demography with ease.
• Access huge customer base: Marketplaces offer a one-stop-shop solution for all customers. A physical store cannot match the choice and inventory that an online marketplace offers. Hence, a large customer base can be reached by an online marketplace due to the variety of products it offers.
• Easy payment and logistics fulfillment: Your marketplace manages operational requirements, be it payments, shipping, refunds, returns, or product pickups. This delivers efficiency into the system, allowing businesses to focus on their core job.
• Measure the KPIs: Most online marketplaces provide dashboards that help you monitor key performance indicators (KPIs) such as revenue, sales, reach, and customer satisfaction. It is not feasible for most businesses to develop this capability independently.

Bangladesh also mulls the potential of a ‘future-proof’ virtual apparel marketplace.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has commissioned a study to establish the readiness of Bangladesh's apparel sector to jump ahead of its competitors with its online marketplace.

The study suggests the successful implementation of a virtual marketplace for Bangladesh’s apparel sector will “future-proof” the industry and help with Bangladesh’s growth story.

The study, which is being carried out by management consulting firm LightCastle Partners aims to analyze gaps in existing policies, assess market potential, and evaluate the Ready-Made Garment (RMG) sector’s “readiness” for a virtual marketplace.

It will also include the formulation of a suitable business model and an action plan to implement operations.

BGMEA president Faruque Hassan emphasized how companies have been increasingly going online with the advancement of digital technologies. He believes the pandemic accelerated the pace of digital transformation, leading to a “boom in the digital and e-commerce sectors.”

“Developing a virtual market platform will boost sales of the RMG sector and rebound from the effects of the pandemic,” said Hassan.

LightCastle Partners has suggested the virtual marketplace would bring the country’s apparel industry into global value chains with focused “Made in Bangladesh” branding through digital expansion and capitalising on the shift towards online purchasing.  

During the pandemic, customers’ buying habits changed as they preferred online stores over brick-and-mortar shops.
Since then, online marketplaces have become the key drivers of growth for businesses. But managing multiple marketplaces and staying on top of people’s listings can take time and effort. The digital marketplace model is an excellent way to reduce the risk of holding excess inventory and the expenses of managing a physical store. It provides a low-risk model to reach a significantly larger audience.

The pandemic has shifted the way customers buy products and services, and the following industry trends are set to influence online marketplaces.

• Shopping on mobile phones: Over 70% of online shopping happens on smartphone apps. Businesses must offer a great buying experience for customers on mobile phones and desktops.
  Vertical marketplaces: Vertical marketplaces connect businesses with a group of customers within a specific niche. They have a specific target audience. This model brings high-quality leads that can be converted into sales quickly and easily. As a business, a vertical marketplace can help you offer more value to the customers.
• Voice commerce: The use of smart devices that work on voice commands is growing rapidly, and customers are using them to purchase products and services online. In the future, these devices will optimize voice search queries, increase search speed, and help businesses make their listings friendly to voice search.
• Artificial intelligence (AI): Chabots are a great example of AI technology. They provide instant answers to customer questions, as well as learn and improve over time. Online marketplaces serving global customers cannot have a human workforce serving 24 x 7 and need to rely on AI Chabots to fill the gap.

Marketplaces have been the lifeblood of commerce since times immemorial. In today’s world digitization is expanding rapidly, and so is the need for digital marketplaces. Like any new digital transformation, this disruption too is currently on a test run and requires some tweaks, but it certainly promises trailblazing advancements and opportunities.