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Amid the uncertain global situations, the digital market is still the foundation of 2016’s economy, connecting producers, consumers, and entrepreneurs around the world, while emerging platforms and online markets have the potential to compete with, and triumphing over, old businesses in satisfying specific unfulfilled needs of the consumers. Today, we see the growth of service businesses offered by unfamiliar names like Airbnb, Didi — China’s taxi service application with 80% market share and over one billion USD investment from Apple, or streaming media like Netflix. This combination of technology and service design demonstrates that, even without ownership, a wider range of people can access particular products simultaneously. This also means lower costs and production resources compared to industrial manufacturing. Since everyone can be both entrepreneurs and customers, the business model has grown exponentially complicated, which is a challenge that the entrepreneurs of today need to crack.
In the golden age of the three musketeers of e-commerce like Alibaba, Amazon, and eBay, Etsy is one of the few online markets that has emerged to the forefront of the industry. It has approximately 25 million members, of which around 1.6 million are active individual producers, and boasts around 2.39 billion USD revenues from product sales per year . In fact, Etsy’s success derives from providing people with an online platform to start their own business at a cheaper cost, complete with online storefronts to communicate with customers and exchange ideas with other entrepreneurs. Also, Etsy’s focus on the niche market of arts and crafts gives the website its brand identity as “a community for arts and crafts lovers around the world.” Its strong craft culture has created a “people-powered economy,” or an economy driven by small groups of individuals, and contributed to the website’s reputation as the leader of the maker culture today.
Apart from that, Etsy has also cracked the code that in order to expand the business further, it needs an ecosystem that is conducive to long-term business growth. Realizing the limitations of handmade products, such as lengthy production periods, Etsy has developed its second-phase platforms called “Etsy Wholesale” and “Etsy Manufacturing.” Etsy Wholesale connects entrepreneurs to wholesaler networks with the purpose of expanding customer bases, while Etsy Manufacturing serves as a directory of individual producers. These two platforms are launched first in USA and Canada to maximize the entrepreneurs’ capacity to meet the rapidly increasing demand. Another new feature aimed at connecting online users with the offline world is “Etsy Local,” which shares updates on users who attend community events all over the world. Furthermore, with a vision that the new generation has shown a tendency to start businesses and, in turn, play a significant role in this market, Etsy has launched the “Etsy Craft Entrepreneurship” program, in which the new generation can learn directly from Etsy entrepreneurs how to transform their crafts into real businesses.
As for Thailand, Bain & Co. has predicted that online stores and e-commerce in Thailand will show a prospect of growth and generate as much as 15% of domestic retail revenues by 2024, as proportionate to the increase in smartphone users to 58 percent of all cellphone users in 2015 (Nielsen Thailand, 2015). However, Alibaba’s advance into the Southeast Asian market and its recent purchase of Lazada, a big e-commerce business in the region, have stirred anxiety among businesses and individual entrepreneurs in Thailand about losing regional growth opportunities and market shares to the Chinese giant as Alibaba has advantages in much higher manufacturing capacity and cheaper costs. At the same time, in preparation for a full-scale headway into the online market, the Central Group has prepared for the competition by purchasing Zalora, a fashion e-commerce operating in Thailand and Vietnam. Nevertheless, the pattern of consumption these days has grown more and more complex; purchase decisions are not made spontaneously whether in virtual or physical stores. Consumers gather their information through research online and at storefronts prior to making their decision to buy an item. The final channel of buying then depends on the convenience and price that are satisfactory to them.
This means that without insights into consumer behavior, even an online giant like Alibaba will not be able to fully dominate this market. Most importantly, consumers are always seeking new alternatives that better satisfy their specific needs. This is the challenge of the online market that requires businesses to discover and find their own niche like Etsy, employ big data analyses to adjust their business strategies that cater to the consumers, as well as develop omnichannels to reach customers, or simply band together to create a ‘new way out’ once again.
After all, nothing is set in stone, and history keeps reminding us that the mighty can always fall.
For more information, join us at CU 2016: EXIT this October.
“Is the e-commerce shopper journey truly digital?” by Nielsen Co., Ltd. (Thailand)
Photo by Pujohn Das/ Space10
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