Brand.com vs Marketplaces: Which channel to invest in in 2024?
The entry and invasion of the Vietnamese market from e-commerce giants such as Lazada, Shopee or most recently the TikTokShop trend has greatly contributed to changing consumers' online purchasing behavior. in Viet Nam.
For big brands, the choice of promoting sales following the trend of e-commerce platforms (Marketplaces) or building their own brand website (Brand.com) is a difficult question as well as shaping their business strategy. online business of businesses.
Within the scope of this article, Meowcart will provide in-depth and comprehensive insight into both forms, helping businesses make the most informed investment decisions.
I. Understanding Brand.com and Marketplaces
Marketplaces
Marketplaces sales are understood as businesses participating in sales on e-commerce platforms such as Lazada, Shopee, Tiki or TikTokShop.
These include international e-commerce platforms such as Amazon, eBay, Walmart,...
Imagine a vibrant shopping mall where you can find everything you need from a variety of sellers - that's exactly how Marketplace works. The only difference comes from the fact that the shopping center (or market) has a limited area with a limited number of brands and goods.
However, with an e-commerce platform in the online space, the scale is almost unlimited in terms of the number of brands that customers can access and purchase. When selling on Marketplaces, your products will most likely be displayed or appear right next to a series of competitors and customers have a series of options based on their budget or preferences.
Brand.com
Brand.com, on the contrary, is the business's branded website, an e-commerce website managed and operated by the brand itself. It allows businesses to build and fully control their own sales environment.
Depending on the technology platform used to build a sales website, it can provide the necessary tools to build, manage and expand online business activities. A typical example is the website of big brands like Nike or Uniqlo, where they sell products directly to consumers and provide a unique buying experience for customers.
There are many e-commerce platforms available that businesses can use to set up their own online store, such as:
- Shopify – one of the most popular e-commerce platforms that allows you to create an online store, manage inventory, process payments, and customize your website simply and quickly.
- WooCommerce – an ecommerce plugin that turns your WordPress site into an online store, with features like inventory management, payment processing, and shipping options.
- Magento – an open source e-commerce platform that offers more flexible and customizable solutions than Shopify or WooCommerce for creating an online store, however, will require users to have in-depth technical knowledge to establish.
Source: Virtina
In addition, many large businesses choose to use an internal team to develop their own sales website without depending on a third-party platform.
Each form has its advantages and limitations; the choice will depend on the business goals and resources of the enterprise. To better understand each platform, join Meowcart in the next part of the blog post.
II. Basic difference between Brand.com and Marketplaces
1. Enter the market
Brand.com
Building a Brand.com website is like building a house with your own style to welcome the guests you desire. This requires a lot of time and money compared to renting a house with all amenities available.
The investment process for building a website comes from many categories, such as choosing a website platform and technology partner, interface design, website programming, connecting to third-party systems, or integrating portals. Payment and shipping separately depending on the needs of the business.
The time for this process can take from 1-3 months for small businesses and up to 9-12 months for large businesses.
Source: Secomm
Marketplaces
With an e-commerce platform, businesses can start creating a store and be ready for sales within just 1 week. The main tasks will involve posting products and decorating booths on the floor.
So we can temporarily conclude that selling on Marketplaces will be much easier and faster than building your own branded website. Perhaps that is why most brands from small to large in Vietnam are choosing to deploy Marketplaces more than Brand.com.
2. Platform costs
2.1. Investment fees
Brand.com
As mentioned above, the cost of investing in an e-commerce website will be many times greater than Marketplaces, depending on the size of the business.
Costs will arise during this period in terms of technology, website design and development, data connection and synchronization,...
According to Meowcart's experience in implementing Brand.com projects for major brands in Vietnam, the cost of implementing an enterprise project can range from $20,000 - $100,000, or even higher depending on the scale of the company. enterprise.
Of course, for small brands, the cost they are willing to invest can be only a few tens of millions to less than 100 million VND.
Marketplaces:
In contrast, Marketplaces provides a flexible store with full basic features, helping brands save time and investment costs. Brands just need to register an account and upload their products to start doing business right away on Marketplaces.
However, in the long run, many fees will arise that will erode the business's profit margin.
2.2. Transaction fees
Brand.com
Payment gateway is a must for Brand.com sales website. For international websites, prepayment is mandatory for all customers.
Popular payment methods in international markets such as the US include PayPal, Stripe,... allowing customers to pay via VISA and Master cards with fees ranging from 2.6% to 3% 6% per transaction.
In the Vietnamese market, transaction fees are relatively more affordable, fluctuating between 1.5% and 2.5% per order, with a variety of payment gateways such as ZaloPay, VNPAY, OnePay, MoMo, ...
However, there are still many brands that combine both payment gateways and cash on delivery (COD) or bank transfer to limit transaction fees.
Marketplaces
In contrast to Brand.com, whose transaction fees come almost exclusively from the payment gateway, sellers on Marketplaces will have to bear not only transaction fees but many other unnamed fees.
When first entering the market, platforms like Shopee and TikTokShop were willing to suffer losses by offering no transaction fees or only charging a very preferential fee. However, after gaining market share, you will need to pay an average of 8-12% of the order value for each order.
This is completely understandable when they invest billions of dollars each year in advertising and incentives to attract customers to shop on these e-commerce platforms.
2.3. Transport fee
Brand.com:
Brands can have autonomy in choosing the shipping unit they want, as well as autonomy in negotiating shipping fees with the carrier depending on the volume of their orders.
Normally, carriers will have special price incentives for brands with large order volumes.
Marketplaces:
Brands participating in Marketplaces must follow the platform's shipping policies. These policies can limit a brand's choice of shipping services, and shipping costs will often be much higher than negotiating directly with the carrier.
2.4. Maintaining fee
Brand.com
With Brand.com, brands need to pay costs such as hosting, security, and maintenance fees to maintain the platform. These costs usually range from a few hundred thousand to a few million VND per month for small individuals. For large businesses, maintenance costs can reach hundreds of millions of dong per month for using the platform.
Marketplaces
Normally there will be no maintenance costs because the exchanges take profits from the transaction and processing fees on each order. However, there are also Marketplaces that charge monthly fees from sellers like Amazon.
3. Branding
Brand.com
Giving brands the ability to freely build their own brand from colors, brand identity, content, to customer experience. Brands on Brand.com can freely design their websites in their own style. This helps them express the brand's personality and identity, making a good impression on customers. Brands on Brand.com can freely design customer experiences, such as payment processes, return policies, etc. to help create a convenient and satisfying shopping experience for customers. Brands can also have complete freedom in building specific promotional programs in their business field.
Brand.com is the best way for businesses to build a solid brand on the internet platform.
Marketplaces
On the flip side, Marketplaces offer a uniform design for all brands on the platform and often offer limited tools and resources for content creation.
This makes it difficult for brands to express their own brand and almost blend in with other brands. Additionally, Marketplaces often focus on price and product competition, giving brands little opportunity to stand out.
4. Customer data
Brand.com
The technology platforms behind Brand.com allow brands to capture and own data and analysis related to business performance on sales websites.
This helps brands access and analyze data comprehensively, thereby making effective business decisions.
Brands can easily grasp all data related to conversion rates, where traffic comes from, and average visit time on the website.
However, the most important data is customer information and their behavior. This data includes customers' full names, emails and phone numbers, purchase history, addresses and their shopping behavior.
Some benefits of owning all customer data include:
- Learn about customer shopping behavior to build effective marketing and sales strategies.
- Create personalized shopping experiences to increase customer satisfaction and motivate them to buy more often.
- Build relationships with customers to increase customer loyalty and encourage them to recommend your products/services to others.
Marketplaces
Customer data is the fatal weakness of brands doing business on e-commerce platforms.
Marketplaces' policy is not to provide customer information to brands. Just like if a brand A has products on the shelves of Coopmart supermarket, and requires Coopmart to provide detailed information about the list of customers who have purchased products of brand A. This is impossible.
Businesses need to understand that, even if customers buy your products on Marketplaces, they are Marketplaces customers, not your customers.
Platforms only provide brands with the data the platform allows. This causes many limitations in data analysis, making it difficult for brands to clearly understand their customers and markets.
Due to limited data analysis capabilities, it is difficult for brands to build effective business strategies, such as marketing, sales strategies,...
5. Marketing and advertising to new customers
Brand.com
With your own brand website, advertising and marketing to new customers plays a key role in your growth.
All advertising campaigns must be aimed at customers accessing the brand's website, and the ultimate goal is to generate revenue through this sales channel.
With easy integration of the most popular global advertising platforms such as Meta, Google helps reach hundreds of millions of potential customers with interests, personalities,... that match the brand's identity.
However, the cost of campaigns to reach new customers at first will be very expensive and requires continuous investment of resources.
Marketplaces
The ability to reach new customers through marketing and advertising campaigns on Marketplaces will focus on the customer files that each e-commerce platform owns. For example, Shopee has a total of 20 million users, then the brand's maximum marketing capacity will stop at 20 million users.
To generate sales on the floor, the most effective way is to use each floor's advertising and keyword bidding tools. Brands will need to have a bidding strategy with highly competitive keywords with countless other competitors.
Normally, brands may need to pay an average of 15-25% of advertising costs on the total order value. In addition to the exchange's transaction fees as well as canceled orders, the cost per successful order can be up to 40%, leading to an erosion of the business's profit margin.
6. Remarketing capabilities (Remarketing)
Brand.com
By owning all of your customer data, including information about shopping behavior, preferences, etc. The most important things are Email and phone numbers, making remarketing easier.
This makes it easy for brands to deploy remarketing campaigns and retarget customers who have visited their website or shopped in their store.
Brands can use this data to retarget customers with personalized ads, such as:
- Advertise products similar to products that customers have previously viewed.
- Advertise discounted products or promotions,...
- Announcement of new product launch.
Brand.com's remarketing power also comes from leveraging the power of internet giants like Google or Meta. When customers visit a website and view a product, brands can easily create remarketing advertising campaigns through Google and Meta. When customers access Facebook, read newspaper pages, watch YouTube videos, the brand's ads will be distributed back to this customer file.
Source: Hello Digital Marketing
Another strong point of the private website platform is the abandoned carts recovery function, which allows remarketing to customers who have not completed payment on the website.
Marketplaces
Because they don't own customer data, brands' ability to remarket on Marketplaces is almost zero.
Even if you have 1 million customers making purchases on your store, you cannot carry out remarketing campaigns for this customer file, you can only spend advertising money to let the platforms allow you to reach them. with their large user base.
7. Personalization
Brand.com
For customers who visit and make purchases on Brand.com, brands can use tools to track customer behavior. Through purchase history, brands can easily grasp customer preferences and thereby suggest suitable products, helping to increase conversion rates and increase customers' purchasing experience.
Thanks to the ability to track and analyze customer behavior more comprehensively and accurately thanks to ownership of all data. Brands can use this data to understand customer preferences and needs, identify new sales opportunities, or improve the customer experience. This helps brands better understand their customers, thereby making strategic decisions related to customers and products.
Marketplaces
With e-commerce platforms, brands can only analyze customer behavior at a basic level, because all the data is not available, causing brands to lack the basis to make effective strategic decisions.
For example, a brand on Marketplaces can only access basic data about customers' shopping behavior, such as the products they purchased and the number of times they purchased. This makes it difficult for them to better understand customer preferences and needs.
8. Loyal customers
Brand.com
With a sales website, brands can deploy point accumulation and reward programs for loyal customers. This helps create a shopping experience and increase interaction between customers and the brand, making them more likely to become attached and loyal to the brand's products.
This can be done through features such as product suggestions based on a customer's shopping history, sending happy birthday emails, or special offers to loyal customers.
In addition, Brand.com provides brands with tools and resources to help them provide the best customer service possible, helping customers feel satisfied and motivated to return.
Marketplaces
Brands sold on the marketplace often focus on price and product competition and launch continuous promotions, which makes it difficult for brands to build deep relationships with customers.
In addition, customers tend to be more loyal to the platform than to specific brands, because there they have many choices and it is difficult to find differences between brands in the same segment. For example, customers can buy products of brand A on Shopee, but there is no guarantee that they will continue to buy products of brand A next time when there are many competitors in the same segment launching products. produce products with more attractive prices.
From Meowcart's perspective, customers who buy products on Marketplaces are customers of Marketplaces, not customers of the brand.
9. Customer lifetime value (CLTV)
Customer lifetime value (CLTV) is the total amount of money a customer spends with a business during their time as a customer. CLTV is an important index to measure the effectiveness of business strategies.
Source: seo.co
There is a huge CLTV difference between selling on Brand.com and Marketplaces.
Brand.com
There are many opportunities to increase CLTV such as creating personalized shopping experiences that help customers feel more comfortable and satisfied, creating customer loyalty programs that help encourage customers to buy more often, or simply taking care of customers. Good customer care helps customers feel cared for and satisfied, so they can spend more with the business.
When customers make purchases and return to buy the next time, CLTV will be accumulated and increase over time.
Marketplaces
The challenge in increasing CLTV is due to limitations in building long-term customer relationships and personalized branding. Customers have many options on Marketplaces, making it easy for them to switch brands if they find a better product or service at a more competitive price.
Besides, Marketplaces often do not provide personalization features for customers, making them feel uninterested and unappreciated.
Most importantly, because the brand cannot identify customers who return to make a second purchase, the CLTV index cannot be measured.
III. Choose Brand.com or Marketplaces?
In the context of fierce competition in the world e-commerce market in general and Vietnam in particular, deciding between doing business on one or more Marketplaces or developing a separate Brand.com is not a decision. simple definition. Each choice will have its own advantages and will have a different impact on the development of the business. Therefore, businesses need to consider and choose a direction that suits their resources and strategies to achieve the best results.
Marketplace is a great choice for businesses that are just starting out, with limited capital but want to quickly enter the market. This direction helps businesses reach a large number of customers quickly without investing much in infrastructure. However, building a brand and creating customer loyalty becomes more difficult in a highly competitive environment like Marketplace.
In contrast, Brand.com gives businesses complete control from design to customer experience. This is the ideal path for businesses that want to build a strong personal brand and maintain long-term relationships with customers. However, when choosing this solution, the technical expertise requirements are relatively high and complex. Businesses also need to invest a lot of time and finance in building the platform. Besides, businesses also need to invest a lot in marketing strategies to be able to bring their brand to customers.
So, is the "Mixed" or Multi-channels solution a breakthrough choice?
To maximize the benefits of both forms, the multi-channel model (Mixed) becomes the ideal solution. Multi-channel not only helps businesses optimize opportunities to reach customers from many different sources, but also helps disperse risks and enhance the ability to adapt to market changes.
By combining both forms, businesses can take advantage of the advantages of each option. For example, businesses can use Marketplace to attract customers and create brand awareness, then transfer them to their own Brand.com site to build long-term relationships. This requires business managers to have flexibility and a deep understanding of both models to manage and ensure unified messaging and customer experience. If successful, the benefits for businesses can be a perfect combination of the advantages of both platforms.
IV. Brand success with Brand.com
Some famous brands have successfully implemented Brand.com such as Nike, Crocs, Uniqlo, and Apple. They not only sell products on their website but also through Marketplaces like Amazon or Tmall. This combination helps them optimize customer outreach and take full advantage of each channel.
Uniqlo
Uniqlo is one of the world's leading fashion brands, with more than 2,000 stores in more than 23 countries and territories. To maintain its leadership position, Uniqlo has deployed a strong omnichannel strategy, combining physical stores and online platforms.
Combine online and offline channels
Previously, Uniqlo focused mainly on developing physical stores. However, in recent years, the company has begun to pay more attention to online sales channels. In 2019, Uniqlo launched its own e-commerce website in Vietnam.
Uniqlo's multi-channel strategy allows the company to reach a large number of potential customers, while leveraging the power of both online and offline channels. Online channels help Uniqlo reach customers who are far away from physical stores, while providing a convenient and fast shopping experience. Offline channels help Uniqlo build direct relationships with customers, while creating an authentic and engaging shopping experience.
Flexibility in sales channels helps Uniqlo not only increase revenue but also enhance customer experience, especially in the modern shopping context. Customers have more and more choices when shopping, they can buy online or directly at the store. Uniqlo meets this need of customers, helping them shop more conveniently and easily.
Impressive growth
Thanks to its multi-channel strategy, Uniqlo has recorded impressive revenue growth from online channels, while maintaining the popularity and popularity of the brand in the global market.
In 2022, Uniqlo's online revenue has grown by 20%, contributing 25% of its total revenue. The multi-channel strategy not only helps Uniqlo expand its market but also enhances brand recognition globally.
The multi-channel strategy also helps Uniqlo expand its market and increase brand recognition globally. Thanks to the online channel, Uniqlo can reach customers in new markets where the company does not have physical stores.
Uniqlo's multi-channel strategy is a typical example showing the success of combining online and traditional sales channels. This strategy has helped Uniqlo increase revenue, improve customer experience, expand markets and increase brand recognition.
Crocs
Crocs is a footwear brand famous for its soft, comfortable EVA sandals with more than 5,000 stores in more than 90 countries and territories. In recent years, Crocs has shifted strongly to an omnichannel business strategy, focusing on expanding online sales channels and increasing its presence in international markets.
Crocs aims to reach more than $5 billion in revenue by 2026, with at least 50% of revenue from digital channels. To achieve this goal, Crocs has made some important changes in its business strategy.
Strengthen online sales channels
Crocs has invested heavily in developing online sales channels. The company has upgraded its e-commerce website, while expanding other online sales channels such as marketplace and social commerce.
Thanks to these efforts, Crocs' online sales have grown strongly in recent years. In 2022, Crocs' online revenue increased by 30%, contributing 35% of its total revenue.
Increase presence in international markets
Crocs is also pushing to expand its presence in international markets. The company has expanded its store network in many countries around the world, and cooperated with major online retailers.
Thanks to these efforts, Crocs has increased its ability to reach customers globally. In 2022, Crocs' international revenue increased by 25%.
Use diverse marketing channels
Crocs is also using diverse marketing channels to increase customer interaction and boost sales. The company is using channels such as email, SMS, and push notifications to send promotional information, new product and service updates to customers.
Result
Crocs' efforts have brought positive results. The company has recorded significant growth in sales, especially through online channels.
This transformation not only proves the effectiveness of the omnichannel model but also reflects the brand's flexible adaptation to the changing e-commerce market.
V. Conclusion
In an era where digital is gradually reshaping purchasing behavior, choosing between Marketplace and Brand.com not only reflects business strategy but is also an important step in shaping the future of each business.
In the journey to conquer the world of e-commerce, choosing the right strategy for your business is extremely important. Each strategy has its own advantages and disadvantages, suitable for different goals and resources of the business.
- Marketplace is a suitable choice for businesses that want to reach a large number of customers quickly and cost-effectively.
- Brand.com is a suitable choice for businesses that want to build unique brands and interact deeply with customers.
- Omnichannel is a flexible option that helps businesses take full advantage of both Marketplace and Brand.com. Businesses can reach a large number of customers from both online and offline channels while building a unique brand and deeply interacting with customers. However, businesses need the resources and ability to effectively deploy a multi-channel strategy.
To choose the appropriate e-commerce strategy, businesses need to consider the following factors:
- Business goals: Does the business want to focus on revenue growth, brand building, or both?
- Resources: How many resources does the business have to implement its e-commerce strategy?
- Strategic vision: In what direction does the business want to develop in the future
Brand.com has proven to be the path to success for famous global brands in creating unique spaces and intimate shopping experiences for customers.
Besides Marketplaces, Brand.com will be an inevitable investment trend for businesses in Vietnam in the coming years.
Refer to Brand.com projects developed by Meowcart.
