Marketplace platforms are already the most popular shopping model in Europe, and their role continues to grow. This is especially true for entities from Asia, which are making a significant impact in various markets. The logistics sector, particularly operators capable of handling large regional players, will undoubtedly benefit from further expansion in Europe, as they generate the most traffic among online shoppers. However, the vast volumes of shipments may disrupt the balance in some market areas, as is the case with air transport.
On e-commerce marketplaces, around 35% of global online purchases are made. Far behind are supermarket websites (17%) and social media (14%). The share of purchases made in the marketplace model has grown by 500% since 2007, and according to ChannelX estimates, it will account for 60% of all e-commerce by 2027. Last year in China, the world’s largest e-commerce market, transactions on marketplace sites accounted for 80% of total e-sales.
What is a marketplace?
In general terms, a marketplace is an online intermediary whose main task is to provide a platform that directly connects many independent sellers with customers looking to buy products or services online. Virtually every e-commerce marketplace platform can be categorized into two main categories. First, by the type of assortment offered, and second, by the sales model. The first group may include horizontal sales, i.e., literally all products, from food to household appliances to sports equipment, or only specialized sales, e.g., electronics or clothing. Regarding the second category, a marketplace can be solely a platform connecting independent sellers with customers, but it can also offer private labels along with third-party products. A mix of models and more detailed divisions are possible, but to illustrate the phenomenon, it suffices to mention that typical marketplace platforms include Allegro, Amazon, eBay, Aliexpress, and two increasingly popular Chinese platforms, Temu and Shein.
Foreign marketplace platforms have taken Europe by storm
Last year’s market analysis by ChannelX indicates that 62% of the 100 largest online stores in Europe are marketplace platforms. Moreover, 85% of the traffic generated by the top 100 e-retailers leads to these platforms. In comparison, single-brand online stores and internet retailers attract only 7% of users each.
More surprising, however, is that only 40 of the top 100 European e-commerce sites are headquartered within the continent and collectively generate only 22% of the traffic. An overwhelming 78% of visits are driven by platforms based outside Europe, with the largest share belonging to major players from the USA, such as Amazon and eBay, and China’s Aliexpress. Temu and Shein are also currently fighting for a strong position.
Marketplace dominance in Western and Eastern Europe, Poland trailing behind
Marketplace platforms are most appreciated in Western Europe, where they constitute 64% of the top 100 e-stores and generate 83% of the traffic. The situation is similar on the opposite side of the continent, where the share in the top 100 is 62%, while the generated traffic reaches 85%. The situation is quite different in Northern Europe, where marketplaces constitute only 45% of the top 100 e-stores and generate 68% of the traffic. In Poland, considered part of Eastern Europe, the share of marketplace platforms is the same as in the North, at 45%, but they generate as much as 77% of the traffic attributed to the top 100 shopping sites.
Who exactly is leading in Poland?
Allegro has been the most important player in Poland for years, attracting 19.85 million users in March 2024, accounting for nearly 66.9% of all Polish internet users, according to the Mediapanel ranking published by “Wirtualne Media.” However, the next spots on the list of the top 10 e-commerce platforms are interesting. Second place belongs to Temu, which has made a significant entry into the Polish e-commerce market. At the end of Q1, the Chinese marketplace attracted 14.09 million users, nearly 47.5% of Polish internet users. This is a significant increase from June 2023, when Temu was visited by 2.55 million customers, and a month later by over 3.25 million. In just over three quarters, Allegro’s Far Eastern rival grew by 452%.
Two other Chinese marketplace platforms, Aliexpress and the fashion-focused Shein, are also on Poland’s top 10 e-commerce list. Both platforms maintain a presence comparable to mid-2023. The national top is, of course, also home to Amazon and several other similar players, making 8 out of the top 10 largest e-stores in Poland marketplace platforms.
How does the development of Asian platforms affect logistics?
The only way for a package ordered in China to reach Europe or the USA within a few days, which has essentially become the standard, is by air transport. This sector has been most affected by the rapid growth in popularity of new digital giants like Temu and Shein. According to Reuters, the rising model of single shipments being sent directly from manufacturers to consumers worldwide has resulted in the fast fashion sector accounting for about half of China’s total cross-border e-commerce. The entire cross-border e-commerce (CBEC) sector of this country has taken up about one-third of the global air cargo capacity for long-distance transport.
The scale of the phenomenon is enormous, evidenced by the fact that Shein and Temu alone send nearly 600,000 packages to the USA every day. In air hubs like Guangzhou and Hong Kong, this has blurred the lines between peak and off-peak operations. As a result, there are more frequent capacity shortages, leading to increased transportation rates.
According to official data from the Chinese Ministry of Commerce (MOC), export declarations filed by the top three Chinese marketplace platforms at Shanghai airports increased tenfold in 2023 compared to 2022.
Analyses by Cargo Facts Consulting indicate that Temu alone ships 4,000 tons of air cargo daily. Shein ships 5,000 tons, Alibaba 1,000 tons, and TikTok 800 tons. This totals the equivalent of 108 Boeing 777 freighters taking off from China every day! Other estimates by Coresight Research suggest that Shein alone, accounting for about 20% of the global fast fashion market in terms of sales value, generates such significant use of cargo capacity that it reduces space for other sectors using freighters, exacerbated by the ongoing blockade of the Red Sea.
The marketplace model fuels Chinese air transport
In the long run, this delivery model is not the most cost-effective solution, as air transport is expensive and typically reserved for microprocessors, not toys and shoes. Nevertheless, according to analysts from the Freightos Air Index, the volumes of goods generated by e-commerce platforms like Temu and Shein are currently the main drivers of high demand, low availability, and high rates for air freight from China to both Europe and North America.
In the longer term, the pace of global expansion of Far Eastern e-commerce seems unsustainable for the aviation sector. It causes long-haul freight flights to struggle to keep up with the demand generated by Chinese marketplace platforms. In last year’s market forecast, Boeing estimated that the dynamic development of Chinese e-commerce and express deliveries would require an additional 190 commercial freighters by 2042, reaching a total of 750 aircraft. This will account for 20% of all such aircraft globally and the same percentage of all new freighter orders, which will total 925 units by 2042.
Besides high costs and the ability to meet high demand, another significant issue with using air logistics for online orders is that while many shipments currently leave China, far fewer return.
Solutions include warehouses spread across the world and Europe
It is no coincidence that more is being heard in Poland about the spaces occupied by e-commerce giants, not only those from Asia but also from the USA and regional players. However, regarding Chinese e-commerce, it is not surprising that the largest marketplace platforms want to distribute from locations close to key markets, reducing costs and delivery times, as their competitors do. However, the scale of this undertaking is impressive. According to the Chinese MOC, by the end of 2023, the number of warehouses dedicated to e-commerce located outside China increased to 1,800 investments, a rise of 200 locations in just one year.
“The impact of the e-commerce sector, including marketplace platforms, on the logistics sector in Poland is significant and extremely important for the industry. It does not matter whether the sales are conducted by an American or Asian brand, although everyone has noticed that the activity of the latter has increased visibly recently. The development of large trading platforms in Europe, including Poland, has benefited all operators who decided to meet the challenges posed by e-commerce. Last-mile deliveries and fulfillment centers, as well as the broader warehousing market, have undoubtedly benefited. In the last few years, not a single market report or quarterly summary has failed to mention e-commerce. These publications indicate, among other things, that from 2019 to 2022, warehouse resources in Poland dedicated to entities conducting online sales increased by 84%, and in 2022 alone, 30% of the warehouse space in our country was occupied by e-commerce. Last year, e-commerce also accounted for 11% of total demand in the market, helping us exceed 32 million sqm of available, mostly modern, warehouse space. This year, it is expected to reach 34 million sqm. It is difficult not to notice the contribution of e-commerce to the development of logistics, which supports every stage of the physical order fulfillment process,” says Marek Kaniera, Chief Operating Officer of e-commerce at ID Logistics Poland, providing comprehensive
logistics and transport solutions, e-commerce services, and supply chain management in 18 countries.
“Marketplace platforms also played a significant role in the dynamic growth of the logistics sector, which directly results from the shopping preferences of Polish and European internet users. In Europe, we simply prefer large platforms that offer payment security, more choices, convenience, better prices, and, of course, ready-made logistical solutions for deliveries. This model is also chosen by sellers due to the logistical support, as the marketplace is a ready-made sales solution that allows them to reach completely new customers and enter new markets with very limited expansion costs and risks,” adds the expert.
“However, marketplace logistics is not easy, especially regarding the variety of assortments. At the same internet address, one can buy products requiring controlled storage temperatures, electronics, but also large items. Storing them in one warehouse is impossible, hence often multiple locations are activated for a single client. For large platforms, order fulfillment time is also important, measured in minutes, and the ability to handle returns of goods bought online, which is challenging especially in the electronics and fashion categories. Another challenge is the ability to handle the vast volume of orders, counted in hundreds of thousands of units, whether from an American or Chinese platform, as the pressure on quality and service time is the same in both cases. We simultaneously observe that the share of orders fulfilled by these latter platforms has been dynamically growing since 2023,” adds Marek Kaniera from ID Logistics.
Marketplace export is China’s new national sport
Chinese take cross-border e-commerce very seriously, not just the platforms but also the administration. According to this year’s information from the State Council Information Office (SCIO), the value of China’s cross-border e-commerce sector, both imports, and exports, reached 2.38 trillion yuan, or about $331 billion, a year-on-year increase of 15.6%. The lion’s share of the final result was driven by exports, which amounted to 1.83 trillion yuan ($254.4 billion) and grew by an impressive 19.6%. Imports totaled 548.3 billion yuan ($76.2 billion), with a year-on-year increase of 3.9%. SCIO reports that as of July 2023, 100,000 Chinese market entities were involved in cross-border online trade. This is more than all online stores in Poland, which numbered 66,000 last year, according to business intelligence agency Dun & Bradstreet Poland.
The Chinese Ministry of Commerce openly admits that cross-border e-commerce plays a key role in China’s entire foreign trade. This is not surprising, given that CBEC has maintained growth for years. In 2020, it was 25.7%, in the following year 18.6%, in 2022 only 7.1%, but last year it jumped to 15.6%. According to the latest MOC forecasts, the value of cross-border e-commerce, both imports, and exports, will reach 2.95 trillion yuan this year, another jump of almost 24% year-on-year. Data from SCIO published on April 22 shows that CBEC grew by 9.6% year-on-year in Q1 2024, reaching 577.6 billion yuan, or about $81.3 billion.
This growth is generated primarily by large platforms but does not come out of nowhere. The sector’s development is accompanied by a long-term and multi-vector strategy, including the cyclical launch of special economic zones, so-called pilot zones, spread across China. These zones offer simplified enterprise registration procedures, optimized payment, taxation, customs procedures, logistics infrastructure, and warehousing facilities. In the background of China’s dynamic CBEC growth, other coordinated logistics solutions on land, sea, and air enable the sector’s further development. The best example is Silk Road E-commerce, an international economic cooperation platform created to support e-commerce within China’s Belt and Road Initiative.
Krzysztof Oflakowski
