Advantages and disadvantages of EC malls
Hello. My name is Saito, and I am a consultant.
When considering cross-border EC, we often hear from customers who are wondering whether to choose their own EC or an EC mall.
As we have mentioned in previous blog, there are many advantages to setting up your own e-commerce site, but there are also advantages and disadvantages to opening a store in an e-commerce mall. In this issue, we will introduce the advantages and disadvantages of EC malls and the major EC malls in each country.
What is an EC Mall?
An electronic commerce mall (EC mall) is a commercial space where multiple storefronts sell their products and services on a single online platform. Consumers can compare and purchase many products on a single site, and store owners can leverage the customer attraction power of an e-commerce mall for their sales activities.
Types of EC Malls
There are two main types of e-commerce malls.
Marketplace type e-commercemall
In this form of e-commercemall, a large number of independent stall holders list and sell their products and services on one common platform. Stores can sell their products to a variety of customers, subject to the mall's terms and conditions and fees.
Examples include Amazon, eBay, and Etsy.
A tenant-oriented e-commercemall is a format where each merchant has its own online store within a single website. Each storeowner has a high degree of freedom to conduct their own branding and promotional activities within their own store.
Typical examples include Rakuten, Yahoo! Shopping, etc.
Advantages and disadvantages of EC malls
When choosing to open a store in an EC mall instead of your own EC for cross-border EC, the following advantages and disadvantages can be listed.
Ability to attract customers: Since e-commercemalls are already being used by many users as a place to shop, individual exhibitors opening new stores can immediately take advantage of their ability to attract customers.
Credibility: The leading e-commercemalls are trusted by first-time shoppers because of the credibility of the malls themselves.
Low-risk market testing: If you want to try out a new product or service, e-commercemalls are a low-cost way to test market response.
Short time to market : By using the infrastructure provided by e-commercemalls, such as logistics, payment, and customer support, you can open a store in a short period of time.
High commissions: e-commercerequires you to pay a monthly fee or sales commission to the mall operator.
High competition: With many competitors on the same platform, price wars and sales tactics are important to be chosen by users.
Weak branding: Selling in a e-commercemall has a fixed template, making it difficult to create originality for your store, and you have no control over customer service or promotions.
Limited data: Much of the customer and purchase data is often owned by the e-commercemall operator, which can limit marketing activities and customer relationship management (CRM).
Limited flexibility: Store operators often have to follow the e-commercemall's terms and policies, which can reduce flexibility in sales strategies and promotions.
EC Malls around the world
Finally, for the United States, China, and ASEAN, which are frequently consulted as sales destinations in cross-border EC inquiries, we introduce the major EC malls, respectively.
● Major e-commercemalls in the U.S.
Amazon: The world's largest online marketplace, featuring a wide variety of product categories and Prime membership.
eBay: A wide range of products from auctions to fixed-price sales of new items, with a diverse range of merchants from individuals to companies.
Walmart.com: Operated by the largest retail chain in the U.S., Walmart.com features strong offline and online connectivity.
● Major e-commercemalls in China
Tmall (天猫): Operated by the Alibaba Group, Tmall (T-MALL) is for the domestic Chinese market and Tmall International (T-MALL GLOBAL), a e-commercesite for the international market.
JD.com (Jingdong): boasts the No. 2 market share in China and is characterized by its strong logistics network.
WeChat: It is possible to sell products linked to Social media"WeChat", which boasts a huge number of users.
● Major e-commercemalls in ASEAN
Lazada: Operated by the Alibaba Group, Lazada has a very high market share throughout Southeast Asia. It features a wide range of products and strong Social mediaconnectivity.
Shopee: Shopee is expanding rapidly throughout Southeast Asia with a mobile-focused interface and interactive shopping features such as Shopee Live.
Tokopedia: Originating from Indonesia, this service specializes in the Indonesian market with many local small businesses and handmade products.
In-house e-commerceand e-commercemalls have their own advantages and disadvantages, and furthermore, major e-commercemalls in each country and region have their own unique features and business opportunities.
In considering cross-border e-commerce, taking these factors into account, you should consider how to utilize your own e-commerceand e-commercemalls. For example, you could use e-commercemalls to attract customers while operating your own e-commercemall, or you could start small with e-commercemalls and use them in your own e-commercestrategy, or you could combine the advantages of both.
There are many ways to do this, so think of a sales strategy that suits your company and make your cross-border e-commercea success.
Achieve results with "minimum investment and effort."
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