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Demystify FMCG Marketplace Types, Transform Your Business

Franc Vidal

One of the most dynamic and multifaceted global industries is fast-moving consumer goods (FMCG). It is expected to reach $15,361.8 billion by 2025, with a CAGR of 5.4%. Price sensitivity, market fluctuations, and new client expectations significantly impact producers, distributors, wholesalers, and retailers of consumer products. 

Meanwhile, rising competition and the use of technology demand that FMCGs embrace digital commerce and marketplace management systems to secure their long-term viability and development. Today, consumers are more educated and receptive to products from other cultures. They are driven by a sense of discovery and are seeking fresh experiences. Understanding the various possible FMCG marketplace types could prove vital for your business. 

In this article, we aim to demystify these FMCG marketplace types to show the variety of avenues that exist for your business. Industry insiders and newcomers may recognise that marketplaces are not merely limited to B2C platforms. There are opportunities abound. However, they can have a substantial impact on B2B enterprises, particularly in the FMCG industry. In this article, we will explore three key areas: 

Example of a B2C FMCG Marketplace on a mobile device

B2C: the Classic FMCG Marketplace Type 

Arguably the most well-known marketplace type, a B2C platform allows you to forge a direct relationship between you and your end users. It is a tried and tested method that provides an opportunity to better understand who your clients are, what they like, and in turn, offer them new and targeted products. You can also invite your partners to provide their products in the marketplace.

Adapt to survive

However, what does this look like in 2022? The Covid-19 pandemic has forced millions of companies to adapt to stay afloat. Despite being less affected than some sectors, FMCG companies also faced difficulties. Furthermore, technology has been the single most essential intervention used throughout these challenging economic times. Among technologies utilised, applications that enable a direct path to the customer and other businesses in the value chain have emerged as the most significant contributors.

Streamlining through apps

While putting their trust in these apps, FMCG businesses have also recast their value chains. By removing extraneous aspects at various levels, they enjoy more influence with their vendor partners, enabling them to develop a more direct link with their end consumers. Food companies, or those with major food product portfolios, have been particularly notable among FMCG corporations for adopting the app approach. These applications have been the popular and required means for these enterprises, leapfrogging general trade, contemporary trade, and even traditional e-commerce channels.

A network effect

Shopery’s B2C direct-to-table FMCG marketplace, for instance, facilitates decentralised product management by producers that is self-moderated by the marketplace. It features advanced logistics management, carried out by producers with a geographical filter in the storefront to regulate proximity shopping. As a result, there is a heightened possibility of recurring orders, giving consumers the flexibility of transactions by credit card, both through split payments and with centralised payment. Overall, the most significant benefit is that a B2C Food Marketplace permits producers to sell their products online to end consumers with other producers. This type of collaboration creates a network effect

Various advantages

Other strategic advantages include:

  • Gaining a deeper understanding of digital consumer behaviour and market trends in real time, at a time of constant change.
  • Enjoying more significant recurrence and upselling.
  • Acquiring new customers thanks to the network effect.
  • Increasing margins by eliminating the entire distribution chain and digitising processes.
  • Protecting against general marketplaces.
  • For the Marketplace initiator, earning additional income through commissions on third-party sales by leveraging its customer base.

The advantages are not simply limited to the food industry. Until recently, the retailer community was mostly responsible for developing consumer relationships and gathering customer data. B2C applications, on the other hand, enable a direct and one-on-one company-to-customer interaction with the former, eliminating the need to attempt to develop bonds with a faceless consumer.

In addition to providing companies and brands with deeper end-consumer insights, they can catalyse more relevant and personalised product and service propositions to consumers. This results in a more enriching customer experience which, in turn, drives increased customer acquisition, conversion, and retention for the brand. Without a doubt, the power balance between the brand and the retailer has shifted further in favour of the brand and away from the store. 

B2B marketplace for selling

Throughout the Covid-19 pandemic, interest in corporate markets expanded dramatically as organisations attempted to extend selections, minimise supply chain and inventory risks, and discover new ways to connect with customers. According to current market statistics, B2B interest has overtaken B2C interest, resulting in the emergence of industry-specific and sometimes geographically limited B2B marketplaces. 

Enhanced sales engagement

The reason B2B market volume is substantially bigger than B2C market volume is evident: it is not the number of users but the volume of transactions that is significantly higher in B2B markets. 

The pandemic has encouraged this trend as businesses seek to improve on the reactionary strategies they enacted in 2020. FMCG B2B marketplaces enhance sales engagement dramatically. Around 80% of consumers and sellers now prefer digital self-service and remote human interaction over conventional in-person interactions. 

Self-directed online shopping

Indeed, B2B purchasing practices are evolving. Buyers today expect access to all possible providers in one spot. Whereas in the past, the manufacturer or distributor sales staff acted as the initial point of contact for purchasers, today's businesses prefer to buy online, benefitting from personalisation and a digital paper trail. 

According to Gartner, B2B buyers are already 57% through the purchasing process before encountering a sales representative. This implies that self-directed online shopping is the norm and that B2B commerce sites must concentrate on the entire customer journey.

A simplified shopping experience

A crucial benefit of this FMCG marketplace type is that it provides an easy user experience for buyers, regardless of their proficiency. Industry newcomers shouldn’t feel intimidated, nor should large industry stalwarts undergoing significant organisational changes feel beleaguered by the fourth industrial revolution. 

Furthermore, there is a possibility to create different segmentations for your seller base, including prices, logistics, etc. Overall, it is a much smoother process, enabling your client to integrate with your ERP or billing tools, etc.

Marketplace over store

For comparison to B2C, we will show you why a B2B food producer would have equally, if not more, success. The creation of an online store does not generate enough interest for FMCG suppliers or smaller distributors. Conversely, the creation of an FMCG marketplace by a producer that invites other complementary producers contributes to the network effect. By having multiple vendors with decentralised management, FMCG businesses understand their consumers (in this case, other businesses) much faster.

Similar to B2C FMCG marketplaces, this will lead to greater recurrence and higher acquisition of new consumers. This is especially advantageous in a generally more lucrative and competitive market. 

A B2B FMCG marketplace would typically have three main components to its marketplace: 

  1. The Owner Back Office
  2. The Seller Back Office
  3. The Buyer Front Office 

With Shopery, you can discover the full range of how each of these components functions with ease.  

B2B marketplace for e-procurement

What are the pain points for FMCG businesses that use the traditional process for the B2B marketplace? 

  • Companies' purchasing departments frequently use inefficient or outdated procedures that do not provide the essential adaptability to their operational areas. 
  • Quotes are obtained from numerous suppliers via email, and agreements with the most prevalent are available through a printed or pdf catalogue.
  • Certain parts of the organisation often make single purchases, unable to increase pricing based on volume. Consequently, purchasing budget forecasts are sometimes inaccurate, and cost control is challenging. 
  • Manual supplier management also entails dealing with a restricted number of them, limiting the opportunity to compare and improve pricing. 
  • Lastly, due to the process's low efficiency, the operational costs of purchasing and administration are expensive.

In light of the above, it is simple to understand why it is preferable to have an integrated B2B marketplace in which all providers are online within a single system. For FMCG suppliers, a B2B purchasing marketplace where a company invites its suppliers to directly manage their products and logistics, and where the different areas of the company can make their purchases online 24/7, is a boon for effectiveness and competitiveness. Overall, an FMCG B2B marketplace for e-procurement has greater agility and cost control

What’s Next?

Now that you have a greater understanding of how each of the three FMCG marketplace types works, you can make a more informed decision about how you would like to take on the digital transformation sweeping the industry. When launching a business or making a digital transition, it makes little difference whether you consider autonomous operations, vertical markets, or horizontal marketplaces. To sell your products, you will need a well-designed marketplace.

When looking for a B2B or B2C marketplace, it is critical to look for a platform with a diverse set of features. Shopery provides the best for both. We recognise that businesses must be motivated to participate in B2B or B2C marketplaces by offering valuable services. Customers and vendors have different requirements, and FMCG merchants want to be able to tailor the client experience. As a result, businesses must make timely and secure payments, as well as purchase items from a variety of suppliers. Shopery has the proper interface to adapt to these needs to ensure a quality service. 

Talk to a Shopery expert now to discover how a Marketplace platform can boost your business.

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About Insights

This guide will enable new marketplace businesses to minimise the risks involved with launching their projects and will boost the chances of success for your new marketplace. It’s crafted by the Customer Success team at Shopery, made up of e-commerce experts that have supported dozens of clients on the journey to the success of their marketplaces.

  • Define a winning marketplace strategy
  • Prepare a successful launch
  • Execute solid growth initiatives

Discover how our Headless ecommerce platform would boost your business.

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