August 20, 2018
Kahuna Marketplaces: The Marketplace Health Dashboard
International growth is something most marketplaces and classifieds property operators aspire to achieve, but it’s a challenge for even the most seasoned operators out there. Take Latin America, for example. With 33 countries and 626 million people—and 25% of this population now buying goods & services online—there’s clearly endless growth opportunities for digital marketplace and classifieds businesses. International growth is super tempting, but there are many challenges and potential mistakes that come with it, too.
In our recent webinar, Gaston Irigoyen, CMO of Restorando, Latin America’s #1 restaurant bookings site, and Carlos Jordan, Founder & CEO of UltraCasas.com, Bolivia’s #1 classifieds portal, share their growth “playbook” for international expansion across Latin America.
Read below for 3 of their key learnings, and apply them to your own growth strategy to help your marketplace or classifieds business flourish:
Running an international marketplace or classifieds property isn’t for the faint of heart. It requires grit and resilience. Latin American economies are constantly changing, complete with ups and downs, in a cyclical fashion that requires platform operators to develop strategies to handle the good and the bad.
Marketplace and classifieds platform operators also need to recognize cultural differences within the regions they operate in. For example, many marketplaces and classifieds properties in Latin America should be taking a mobile-first approach to growing their businesses because the majority of consumers use mobile devices for purchases/transactions. In fact, 27% of Internet users in this region make purchases on their mobile phones and 40% of those people do so monthly (Statista).
In terms of cultural differences, something as simple as packaging a discount a certain way can make or break a marketplace’s image. For example, in some regions it’s not acceptable to offer discounts, while in others it’s encouraged. There’s also middle ground where classifieds and marketplace operators can offer discounts through bundling services.
When expanding into new markets, there’s no single rule that can be used for evaluating success. Some leaders say it’s best to wait until you have at least 50% market share in your region (indicating a proven business model), while others suggest moving quickly (because marketplaces are a winner-take-all space, where the first mover has a significant advantage).
Regardless of the strategy you follow, it’s essential to ensure existing processes within your marketplace are lean and consistent. Having a mature technology stack is also essential. If your systems aren’t solidified and your technology stack is unproven, expansion will only amplify the flaws within your platform.
Choosing countries for international expansion requires marketplace operators to look at the total market size, while also identifying ways to replicate success. In many cases, the key to gaining traction in new regions is to bring something new to the table.
Going back to the point about market dynamics, it’s essential to plan ahead and to have a Plan B should the market you’re targeting decline. When developing that plan, in the section on competitors, you can’t base it on a snapshot of the current landscape. It needs to account for the fact that competitors are continuously evolving. Failing to look at the big picture, puts your marketplace or classifieds property at risk of collapsing.
While on the topic of planning, it’s important to ensure your property is growing at a sustainable rate. In the race to dominate new markets, it’s easy to forget about the importance of supply and demand and how it affects liquidity. By focusing on markets at a slower pace, you can take a proactive stance on buyer/seller needs, while justifying higher take rates.
Want to hear more? Check out the recording of our short but impactful 30-minute webinar with Restorando and UltraCasas.com. Simply click the button below!