Emerging Service Marketplace Platform and it’s Future: What it takes to satisfy the millennial’s
A $214 billion industry that is expected to touch the $400 billion mark by 2021 is indeed a great arena for investment
This is the reign of digital transformation. The new possibilities of digitization have changed the specifications and demands of business operations to a great extent. Not only the requirements have altered but also the perspective of entrepreneurs have shifted towards innovative alternatives to make mammoth profits in lesser investment. Just discover an unrivaled niche and deliver the experiences in the best way and boom! You now own great business.
Early entrepreneurs of the service industry identified the concept of online on-demand services marketplace platforms to offer an organized medium for requesting home services in the easiest way possible. The best approach to do that was identifying and accommodating all needed home services on a single online marketplace for services.
It was not as easy as it sounds. The concept is simple but not its implementation as a software solution. In fact, the business organization was also a big task as it was difficult to build both ends of the marketplace concurrently.
Guess what! Entrepreneurs did that job, and the concept became a massive hit. You can guess the level of success by the fact that the service marketplace industry today has gained a market of over $214 billion and is expected to grow over $430 by the end of 2021.
What’s hot in the service marketplace industry these days?
The concept made a huge success in its early stages itself. By meeting the day-to-day needs of the people from the comfort of their homes, the business opportunities grew and took different forms.
Stats prove that –
42% of the adult American population has used on-demand services the previous year. It actively includes services like ride-sharing, wedding planning, day-to-day help like plumbers, mechanics, beauty treatments, etc.
There is another fact that-
22% of Americans have offered some kind of on-demand services on one or multiple service marketplace platforms. This dynamically includes driving an Uber cab and offering on-demand skilled labor such as repairing jobs.
Out of the 22% of American who have offered some kind of services last year, 51% admit that they have been able to improve their earnings in this process. No doubt experts believe that global demand for on-demand services is increasing by 49% each year.
What’s in it for the entrepreneurs in the coming era?
Both technological innovations and business trends are evolving as we speak. The trends are shifting and various traditional services are gradually moving to the online sphere. Here are a few trends that I believe we will see soon-
- Similar on-demand service marketplaces will merge
With this growth rate and an increasing number of startups in the segment, some may keep ruling while some may die because of incompetence. In all this, many of the similar platforms may find a better deal in merging with the good going competitive platforms.
This may also include, global service marketplaces gaining the local counterparts in different countries on the globe. A similar trend is also being seen in the product marketplace segment. Also, we might see a B2B services marketplace extending to the C2C segment and the vice versa.
We can take a cue from the merge of Yardsale and FOBO in 2015. Who knows, we might see a similar pact between Thumbtack business and Task Rabbit, or between Freelancer and Upwork.
- Product marketplaces will extend to the service industry
The product marketplace industry is also not untouched with this trend. By partnering with existing businesses, service marketplaces may explore some additional value to the customers. For example, Amazon extended into online Grocery delivery service with Prime Now. You never know, the same platform might also provide on-demand services as the business model is not dissimilar. It just requires a MAP integration and a listing of local service providers instead of grocery stores.
It’s just about capitalizing on the existing popularity, customer’s base, and credibility to venture in a new market. Google has done a similar innovation with its recent launch of cloud gaming platform “Stadia” and Apple with its video Streaming service Apple Plus.
So, I think that existing brands will capitalize on their assets and extend to the service marketplace industry to capture a broader market.
- Innovative ways to deliver more and services
No doubt innovations are still going on and business are coming up with advanced services and faster ways to deliver them. With this trend, one thing that is sure is we will see more innovative ways to deliver quick services and the waiting time will reduce significantly.
We can learn this trend from an array of examples in both service and product marketplace industry-
- Uber adopted the trend in developing countries and is now offering from luxury cars to Tuk-Tuk service in its list.
- Uber extended from cars and offered Electric bikes, helicopters, and even boats in certain areas.
- Airbnb took a different route from hotel aggregators and accommodated home-stays which was never seen before.
- Amazon included Prime video and Amazon Music in its Prime subscription package to entice as many customers to its primary platform.
- This is cool. TaskRabbit provides service on its platform using which you can hire a tasker to stand in a queue for you. Queues may include for restaurants, special events, or even to buy the newly launched iPhone.
Which is the best business model for a service marketplace?
You need a marketplace business model way before you need an on-demand service marketplace website or app to run your business. The first step for laughing your business is developing an unbeatable business model. The popular on-demand service marketplaces follow one or all of the following three business models-
It’s the simplest and most popular of all. Customers book a service, marketplace assigns a tasker and gets the job done. In return, the service marketplace platform charges a commission cut from the earning made by the tasker. The more task request your platform gets, the more commission you earn.
It’s more like offering a bidding service to the taskers. These platforms mainly connect a customer to all the taskers on the platform. The customer submits a task requests and all the taskers bid to perform the same. Depending on the bidding algorithm they assign the task to a tasker and marketplace gets a cut from that. Some marketplaces charge on per-bids too.
This model has proven its significance in both service and product marketplace industry. Here, instead of charging a commission on each task, the marketplace asks the customers to subscribe to a membership package. Based on the packages, Customers can make as many task requests during the subscribed period. Some marketplace asks both the customers and taskers to buy a membership plan for their corresponding access to the platform.
Update yourself with the emerging technologies
Business industry, Marketing, and Technology, all three are deeply interlinked with each other. With innovative technologies, entrepreneurs get innovative business ideas to capitalize on and new marketing tools to promote themselves.
As a business aspirant in the on-demand service marketplace industry, you must possess the skills to know when something is trending and how to capitalize on it. No doubt, the service marketplace segments is being ruled by many giants and it has enough of the startups already, but there is a lot more to go yet.
Especially, when you can adopt innovative ways to offer the same services with greater speed, convenience, and efficiency. You must keep yourself updated on the potential opportunities, pain points of the customers, and innovative ways to solve them.
Make a head start
Next big stuff is the speed of capitalizing. You might find a fantastic idea, and an effective marketplace business model, but if you can’t realize that on the right time, it’s a failure for sure. You must stay aware of the technological feasibilities to implement business ideas into software with easy investments and speedier delivery time.
I am telling this because the biggest mistake aspiring entrepreneurs make is building their software implementations from scratch. This does not only waste a great amount of time, money, and resources but also the time that could have been capitalized on developing the business with a perfectly timed launch.
Make a head start and go for ready-made software solutions. There are many on-demand service marketplace scripts available on the market. You can use any of them and save a great deal of time, money and effort. For example, if you like the lead-based business model, you can go for a Thumbtack clone script with bidding algorithm. If you like the transaction-based model, you can buy a TaskRabbit clone script.
E-commerce is a mammoth industry and on-demand service marketplace is one of the largest stakeholders. The global scenario and massive adoption of service marketplaces have generated enough opportunities for entrepreneurs to launch an online marketplace for local services as well as of the global standards. The signs are optimistic and it is a great time to venture in a billion dollar industry.