June 17, 2020

How 10 Marketplaces From Amazon to Tmall Are Coping With COVID-19

It’s old news that ecommerce has changed as a result of COVID-19, causing new trends to emerge and a surge in online grocery. And while some ecommerce platforms were already in the process of introducing innovations to their platforms that happened to coincide with the pandemic (we’re looking at you, Walmart Fulfillment Services), all ecommerce platforms have had to think on their feet.

Here, we’ve gathered all the need-to-know information on innovations different marketplaces tried (and occasionally failed) in the first quarter coinciding with the pandemic, how things went, and what the future of ecommerce on these platforms looks like for now.

Amazon

It’s easy to say that Amazon has led out when it comes to ecommerce marketplace response to COVID-19, with a 24% increase in sales just Q1—its fastest growth in four years.

Initially, like every other platform it seemed, Amazon was overwhelmed by demand for items like masks, hand sanitizer, and so on. Amazon’s response to the pandemic was to first suspend shipment for “nonessentials” in mid-March, lifting the suspension for all items last month, and its grocery feature has seen a lot of demand—which is great, but only if Amazon can keep up with supply. At the beginning of April, went as far as removing its deals page, product recommendations, and “frequently bought together” to encourage shoppers to buy less.

However, Amazon has since recovered from all of these setbacks, bringing back the deals page, product recommendations, and fast shipping for non-essentials.

What will really determine Amazon’s success, it seems, is how it treats its workers—without them, the system doesn’t run, and Amazon continues to make headlines about safety for warehouse workers, with workers testing positive for the virus and at least one death.

This isn’t the first time Amazon has dealt with controversy over labor conditions, and it seems doubtful that people will stop relying on the ecommerce giant to deliver necessities out of moral obligation. However, if Amazon’s workers continue to protest, breaking down Amazon’s fulfillment, consumers may turn to other channels simply because they can’t get their items shipped.

Best Buy

On April 15, a business update from Best Buy stated online sales were up 250% year-over-year, as more customers began to use a mix of delivery and curbside pickup, with each representing about half of total online sales.

In March, the company suspended in-home delivery, installation, and repairs, and switched to curbside service only. Despite this, the CEO said the company had maintained 70% of sales Y/Y.

In an article by Barron’s, an analyst suggested Best Buy is better positioned than most to recover from the pandemic because of its tech focus and growing services business. Also, as more workers in the U.S. are being allowed to work from home indefinitely, there will likely continue to be an uptick in sales for home goods, including electronics, which of course is Best Buy’s specialty.

eBay

Just like other online marketplaces, eBay has seen significant growth since the pandemic, pulling in record numbers by eBay standards. eBay GMV is expected to grow between 23% and 26% in Q2, well above it’s 2% average since 2016.

eBay reported a revenue of $2.4 billion in Q1, but is likely to have a net increase of $5 billion since Q2 2019. Since mid-March, eBay reported seeing strength in traffic, acquisition, conversion, sold items, and GMV, in part because of customers’ new-found interest in the platform and Amazon’s focus on essential items. The platform also saw an uptick in small business sellers.

In the U.S., eBay is helping retailers open up shop as quickly as possible, according to one report, and in the U.K. it’s been involved in building a PPE platform. In the meantime, eBay has seen some negative effects as a result of advertising slowing down and removed over 15 million listings because of price gouging or false claims.

eBay has worked to continuously update sellers and consumers about safety precautions and shipping delays. Because eBay relies on individual sellers shipping their own items via FedEx and USPS, it is not experiencing the same supply chain issues as Amazon.

The one issue eBay is dealing with is price gouging, or people taking advantage of concerned consumers. Since February, the marketplace has been working to remove listings and prevent sellers from charging outrageous prices for goods.

Etsy

Etsy is one marketplace that has seen record performance during the pandemic, growing 140% in May after 100% growth in April. Plus, 165K new sellers joined in May—double the average.

When high-demand items ran out on places like Amazon or Walmart, people turned to the individual makers and sellers on Etsy; in the meantime, people who are furloughed or out of work or just looking for ways to fill their time have monetized their skills on Etsy in droves.

The number one item people were looking for? Face masks. Etsy sent a push notification to its sellers encouraging them to make face masks, and at one point, people were searching for face masks on Etsy nine times per second, according to Marketplace Pulse.

There doesn’t seem to be anything negative in the news around Etsy, and in the new normal, the marketplace could continue to fill needs that aren’t met or can’t be met by larger marketplaces.

Google Shopping

Google is great at a lot of things, but so far, ecommerce is not one of them. It made headlines in April when it announced retailers and brands could list their products for free on Google Shopping; prior to April, merchants had to pay Google every time someone clicked on their Google Shopping listing.

Relevant items for sale have been attached to searches since 2002, with a service called “Froogle” that was overhauled and turned into Google Shopping in 2012.

According to Marketplace Pulse, Google Shopping has around 4,500 active retailers and brands, but it has yet to address the problems it originally had. For some excellent scathing remarks, read the Marketplace Pulse article we referenced. But otherwise, we wouldn’t call Google Shopping a contender at this time. Read some more of our thoughts on Google Shopping here.

Shopify

Canadian-based Shopify is a bit of a dark horse. The $83 billion company helps one million companies in over 175 countries build and run online stores, from small brands to Kylie Jenner’s cosmetics line.

During the pandemic, Shopify has introduced a new money management solution specifically for small businesses, made a new cryptocurrency partnership, and launched a consumer shopping app, aptly called Shop. While the money management solution seems pretty great, the app—an updated and rebranded version of Shopify’s original package tracking app—is somewhat clunky in its function, with no clear appeal to consumers looking to shop.

Shopify isn’t exactly a marketplace (it’s more of a platform), so it can’t really be compared to the others on this list—but it’s here because it offers alternative routes for brands, big and small, to sell their products. All in all, the future of Shopify looks bright, even if it has a few kinks to work out.

Target

At just over a year old, Target’s marketplace is the youngest on this list, and one of the smallest with 109 merchants and less than 200,000 products. While Marketplace Pulse suggests Target has not yet applied the things that make it great to its marketplace, its marketplace still saw tremendous usage this first quarter.

According to a business update in April, digital sales trended up 275% from April 2019, with the majority of consumers buying from Essentials and Food, and Apparel and Accessories suffering, on par with other ecommerce trends.

Overall, Target has been a strong performer during the pandemic, the report said, in part because of extended delivery windows on Amazon. Target is hardly a contender for Walmart and Amazon, but it doesn’t really seem like it’s trying to be. There is power in being consistent though, and Target has made it a point to seek out small businesses and help them grow, which could prove to be a boon both to small business owners and to the Target brand.

Read more about Target marketplace trends here.

Walmart.com

Last, but certainly not least is the No. 2 contender for the No. 1 marketplace. Like Amazon and eBay, Walmart had a problem with coronavirus-inspired fraud, but it’s also made leaps and bounds with its online grocery and recently launched fulfillment service.

In fact, as recent as this month—Walmart may have pulled into the No. 1 spot, outperforming both Amazon AND eBay. Not only did Walmart.com see a 55% traffic increase in April (compared to just 15% on both eBay and Amazon), but the Walmart app became the No. 1 most downloaded app in the shopping category in mid-May. From January to April 5, the app saw a 460% increase in average daily downloads.

Walmart also added 50% more sellers from April-May, and third-party sellers are reaping rewards from the growth too. It seems the problems that have plagued Amazon with fulfillment have been a non-issue for Walmart, which had the infrastructure in place for WFS in place long before it launched.

We could go on, but long story short: Walmart is killing it.

MercadoLibre

Like other marketplaces, MercadoLibre saw huge increases in purchases of necessities, such as homecare and laundry products, specifically a 403% increase in March, according to Statista. Sales in “mass-consumption products” and pharmaceuticals also rose by over 100% each.

In response to the pandemic, MercadoLibre announced it would waive fees for sellers of “necessity products.” Reporting on Q1 2020, it seems that MercadoLibre is functioning relatively normally, with on-time deliveries and fully operational storage centers.

Tmall/Alibaba and JD.com

Since the outbreak started in China, Chinese marketplaces have been at the forefront when it comes to innovation to meet customer supply and demand.

Like marketplaces around the world, ecommerce in China saw a surge in demand for groceries and other necessities. JD.com and Alibaba both got creative and have continued to innovate to meet consumer demand while supporting sellers—for instance, collaborating with alcohol brands to bring virtual nightlife to people in isolation, and now, offering bookings for COVID-19 tests.

As China slowly relaxes preventative measures, it is likely that consumers who have come to depend on ecommerce for their everyday needs will continue to do so as part of their new normal.

Looking to the future

So there you have it. Some marketplaces, namely Amazon, are recovering, while others, like Walmart and Etsy, are thriving. Some are worth watching, like Shopify and Target, while still others have yet to prove their worth, like Google Shopping. International marketplaces like MercadoLibre and Tmall are all responding to the COVID-19 pandemic in different ways in their respective markets.

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