UK Online Marketplace Spend to Reach £39.3bn by 2024

In contrast to the many multichannel retailers that are struggling, online marketplaces continue to thrive with spend set to rise by £13.1bn over the next five years, according to GlobalData, a leading data and analytics company.

The company’s latest report, ‘Retail Channel Series: UK Online Marketplace Retailing 2019 – 2024’ reveals that this substantial rise in online marketplace spend will increase the threat to retailers that are not currently selling on marketplaces. The vast range of products sold on these sites extends this risk to most retailers, and those that are better protected will be ones with their own marketplaces, such as ASOS, or product choices akin to marketplaces such as Next.

Emily Salter, Retail Analyst at GlobalData commented: “General merchandisers Amazon and eBay dominate the online marketplaces market and are forecast to account for over 90% of spend in 2019 as their reputations, huge product ranges and fulfilment options (in particular Amazon Prime) make them the first port of call for many shoppers. Spend on brand new items will rise at a faster pace than spend on second hand products over the next five years – 53.9% versus 29.8% – and the prominence of Amazon and eBay will significantly contribute to this as retailers look to these marketplaces as a growing revenue stream.”

Clothing and footwear is suited to second hand retail, and will become more important as consumers focus on cost and sustainability. Young shoppers in particular wish to buy clothing and footwear that has less impact on the environment, as well as at a lower cost as discretionary spending continues to be squeezed. However, they still desire frequent ‘newness’.

Despite growing concerns surrounding sustainability, spend on second hand products is forecast to make up less than 20% of total online marketplace spend in 2019 as few sectors lend themselves well to resale.

Salter adds: “Growth in the second hand market will be driven by sites dedicated to resale – in particular Depop, which looks and functions like Instagram with an intuitive and attractive app design that appeals to young digital natives. The presence of unique and often vintage items, lower prices, and the concept of ‘social shopping’ appeal to 16-24 year olds and are alternatives to the ubiquitous model of fast fashion and big brands. Additionally, unlike many online marketplaces, Depop is perceived as a fashion destination, which is a huge contributor to its success.”

Source : Insight DIY and GlobalData

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