Following Tesco’s deal with House of Fraser to sell the latter’s products on its website, Retail Week takes a look at the key marketplace players.
Tesco has boosted its non-food offer with a deal to sell House of Fraser products online, and its Tesco Direct marketplace now has more than 50 external sellers signed up.
The growth of the marketplace sector in the UK has been steady over the past few years - although it is difficult to get clear growth figures - and the key players are now well established. Honor Westnedge, senior analyst at Verdict, says: “They become destinations in their own right because they are the go-to place.” Here are the key players.
Retailers: Big names such as Debenhams, Claire’s Accessories and Clarks have set up shop on Amazon.
Turnover: Amazon’s UK sales soared to £4.7bn, according to its 2013 accounts. Reported pre-tax profit soared 56% to £17.1m at its UK business in 2013, although the company is understood to report most of its European profit through a tax-exempt Luxembourg partnership.
USP: Amazon is the UK’s most visited website so retailers have inevitably rushed to sell their wares in the busiest virtual shop window.
Retailers: Smaller brands and boutiques.
Turnover: In October 2013, at its last full year results, Asos reported pre-tax profits up 23% to £54.7m and retail sales up 40% to £753.8m for the year to August 31st. Asos’s marketplace will have made up a small fraction of that.
USP: Asos’s marketplace is designed to serve a different function to others. At Asos, the main site hosts other fashion brands such as New Look and Ted Baker while the marketplace is a spot for smaller boutiques and independent retailers.
For Asos, it’s part of creating a one-stop shop for all things fashion. From the point of view of established retailers, the marketplace may not be a direct channel to sell from but it does help draw traffic on to the Asos site which their lines are sold through.
Retailers: Include House of Fraser, Mamas and Papas, The Entertainer and Maplin.
Turnover: Tesco’s last full year results in April this year did not provide a figure for Tesco Direct, which is the supermarket’s non-food online arm. Its results release said: “Our product offer on Tesco Direct has grown to over half a million lines, supported by 50 market place ‘Sellers at Tesco’,” but did not give turnover.
USP: Tesco does not always break down figures for its online operation, making it difficult to gauge the success of its online non-food arm, which was launched in 2012 in a bid to take on Amazon. It has worked hard to attract big name retailers and the deal with House of Fraser is the biggest so far. Most of the sellers on Tesco Direct are smaller, more niche brands but there are some bigger names and Tesco is clearly gunning for more. The supermarket is going through a difficult time, but it will undeniably still be attractive for many fashion and general merchandise retailers – its size and scale ensures that.
Retailers: Includes Argos, Debenhams and House of Fraser as well as Superdry and Currys and PC World.
Turnover: eBay UK does not release sales figures
USP: eBay has positioned itself as a partner, rather than a competitor, of retailers. It works with a long list of the UK’s biggest names and provides them with a selling platform that receives a massive amount of traffic. It is also constantly trying to innovate in the retail space. It is leading the way in mobile, and has worked with bricks and mortar brands to develop new concepts bridging the online and offline worlds. Ebay has almost become a bona fide sales channel in its own right – for non-food brands selling online it has become an important part of their strategy.
Retailers: Although smaller niche players make up the bulk of Rakuten Play.com’s sellers, bigger retailers such as Blue Inc, The Entertainer, Brantano, Mountain Warehouse and The Hut have their own stores on its marketplace.
Turnover: The firm is owned by Japanese ecommerce giant Rakuten, which last year turned over £3.03bn and made a £517m profit.
USP: Rakuten decided to concentrate solely on marketplace when it bought Play.com in 2011. Play was a well-known competitor in entertainment, where it challenged Amazon, and has a loyal following. Rakuten has global reach with sites in countries including the US, France, Brazil and Germany. It plans to operate a single global platform, which may open opportunities for retailers to internationalise.
Retailers: Burberry, Asos, Apple and Uniqlo are some of the big hitters that are selling on the Alibaba owned Tmall marketplace.
Turnover: Alibaba, which is gearing up for what is touted as one of the biggest IPOs in history, sold £146bn of merchandise last year – more than Amazon and eBay combined.
USP: Alibaba dominates ecommerce in China where 80% of all online sales come through its sites. Retailers across the globe are vying to tap into the increasingly powerful Chinese consumer meaning Alibaba is becoming a vital partner. Of its 70,000 sellers, 2,000 are foreign brands.
Tesco inks deal to sell House of Fraser products online
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