Sellers began to reduce work with marketplaces
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The boom in the number of sellers on large marketplaces is passing. The growth of new sellers began to slow down, banks working with sites found out. The observed turnaround may result in a long-term trend, experts believe. Some online retail players began to increase commissions for counterparties and reduce their support for marketing and logistics. In such a situation, entrepreneurs will be forced to develop alternative sales channels, creating their own websites or moving to niche marketplaces, where there is no such aggressive competition as on large platforms.
The number of sellers on marketplaces in January-November increased by 35% year-on-year, the Tochka Marketplaces service (part of Tochka Bank) calculated, having analyzed more than 100 thousand active sellers from among its clients. The company does not provide absolute data.
For the first time, analysts recorded a slowdown in the growth rate of sellers, adding that in January-November 2022, their number on online platforms increased by 134% year-on-year.
Separately, for the 11 months of 2023, Megamarket saw an increase in sellers of 95% year-on-year, Yandex Market – 73%, Ozon – 67%, Wildberries – 22%. Megamarket Business Development Director Vasily Pogonin speaks of a twofold increase in buyers on the site in January-November, adding that “the number of sellers has also increased significantly.” Ozon notes a doubling of its sellers from January to September, to 400 thousand; by the end of autumn, about 30 thousand more entrepreneurs joined the platform. Wildberries insist that the growth rate on their site is higher than a study of the structure of Tochka Bank showed. Yandex Market did not respond to Kommersant’s request.
At the same time, analysts recorded a decrease in the number of active sellers by 7% for KazanExpress and by 27% for AliExpress. AliExpress CIS says that the number of Russian sellers on the platform decreased by 10%, but the number of sellers from China and other countries increased by 12% – this is explained by the fact that the marketplace is focused on the development of cross-border trade. KazanExpress noted that the company has closed the activation of new sellers for two years. After the deal with Magnit (see “Kommersant” dated November 9) the marketplace expects an increase in the number of new partners.
According to Ilya Kretov, director of Tinkoff eCommerce, in the third quarter the number of Russian sellers on marketplaces increased by 10% year-on-year.
This confirms the reduction in growth, he notes. As the expert explains, entrepreneurs moved online en masse during the pandemic, so the rapid growth in past years was caused, among other things, by the low base effect. The rapid growth in the number of new sellers on marketplaces in recent years has been associated with the ease of access to online platforms, adds Ivan Kurguzov, executive director of Oborot.ru.
Previously, the attractiveness of the business of selling goods on marketplaces was ensured by the platforms’ investments in marketing and logistics to compensate sellers for the corresponding expenses, says Data Insight partner Fedor Virin. But, he points out, in 2023 the situation changed: the commission of platforms increased, and some marketplaces reduced support.
Tatiana Bakalchukhead of Wildberries, in an interview with RBC in May:
“The purpose of the marketplace is to develop entrepreneurship, and not at all to get rich, which many accuse us of.”
According to Ilya Kretov, the slowdown in market growth will continue in the coming years; already, due to high competition on marketplaces, every fourth seller stops working on the online platform within six months. Ivan Kurguzov believes that the race of marketplaces to increase the number of sellers has already reached its maximum; in the future, competition between them will intensify to retain existing entrepreneurs on their sites. The number of new sellers is not growing much now, since many of those who worked on one site are now connecting to several marketplaces at once, notes Mr. Virin.
Ilya Kretov believes that against the backdrop of growing competition and declining profitability on large marketplaces, sellers will begin to develop their own sales channels by creating their own websites. He does not exclude their flow to niche marketplaces, where competition is not so aggressive and the buyer is more loyal.
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