What is an Online Marketplace?
Fundamentally, a marketplace is a multisided platform, which connects two or more groups. A mall is a two-sided marketplace as it on one hand provides basic amenities to sellers for opening a store and on the other attracts the customers who eventually end up transacting with these sellers. Android is a three-sided marketplace as it forms a triangular transacting relation between app developers, phone manufacturers and end users. A smartphone can be classified as a four-sided platform since it builds interaction between the service providers, app developers, value added service providers and the end customers. In a similar manner, an online marketplace is a platform, which connects a seller and a buyer in the virtual space.
What are the Key Attributes of an Online Marketplaces?
- Neutral: Online marketplaces never discriminates one set of users, on either side, against the others. At the same time, they are usually highly meritocratic thereby handsomely rewarding the best players or users.
- Cross Network Effect: Addition of new members on one side increases the value of the marketplace for the members on the other side.
- Secure: They provide a secure transacting platform for al the interacting groups. They instill confidence among the users and this happens to be one of the main reasons of their existence.
- New Opportunities: They end up creating new opportunities since they initiate interactions which otherwise wouldn’t have taken place
- Zero Marginal Cost: Since the main value creation comes from the interaction between groups, so once matured, the marketplaces operate on zero marginal costs. This however does not mean that they do not have any fixed costs.
- Scalable: They represent one of the most scalable ecosystems which can transcend national boundaries and cultural barriers.
Why is Paytm a unique marketplace?
- Owing to its merchant base reaching the figure of 1lakh and a customer base of more than 100 million, strong cross network effects are in operation.
- Cashbacks being offered into the customer’s Paytm Wallet increases the stickiness of the customer base on Paytm platform.
- A complete Do It Yourself (DIY) seller panel at Paytm, increases the usability of the platform from the sellers end.
- Shortest seller payout cycle makes the platform more profitable for the sellers.
- Paytm treats big and small sellers alike thereby operating as an equal opportunity platform.
According to some of the industry experts, Paytm is expected to become the largest Online Marketplace of India owing to the synergies it shares with other products like Paytm Wallet, payment gateway etc. We sincerely hope and look forward to share this success journey with all our sellers.
