The self-reinforcing effect of marketplaces
Marketplaces tend to grow very fast as has already been discussed in What are Marketplaces. However, why do marketplaces grow so fast? How is it possible that Amazon owns nearly 20% of the total online market in the USA while Alibaba's market share is estimated to be 80% in China?
There are multiple growth strategies than can be used to promote growth in different types of marketplaces. In order to successfully to decide which methods works best for your market place there is a simple framework called the Bullseye from the book Traction: How Any Startup Can Achieve Explosive Customer Growth. This can be done in three steps:
1. Start by brainstorming potential growth ideas.
2. Select the most promising ones, and perform quick tests with each, all in parallel. Each test should last no more than a month.
3. Once the tests are done, select the channel that worked the best and focus on it until it no longer “moves the needle”. (market place academy,2016)
(Gabriel Weinberg &Justin Mares, The Bullseye Framework)
In today’s market many consumers appreciate efficiency and speed. Payment transactions play a huge rule in improving a company’s growth. Instacart is an example of how a company can implement this in their ecommerce strategy. Instacarts allows for the market place to combine two separate payment tasks into one, there making online purchasing faster and easier for the customers.