Online marketplaces are proliferating. In 2022, the global online marketplace market size was $3.5 trillion, and it’s projected to grow to $8.8 trillion by 2025. Yet, the rapid expansion of online marketplaces has led to intense competition, causing businesses to prioritize swift growth and expansion. In this rush, the focus on trust and safety has sometimes been overlooked. However, it’s important to recognize that a marketplace’s role extends beyond merely offering a platform for sellers to showcase their products. It should also serve as a secure environment where both sellers and buyers can engage in transactions with confidence.
The significance of establishing trust within a marketplace has never been greater. Generally, losing the trust of customers can prove to be a costly error for any business. When a customer loses trust in a brand, they are more inclined to take their business elsewhere, potentially choosing a competitor. This leads to a decline in loyalty, repeat business, and positive word-of-mouth. Recent research by PwC in 2022 reveals that a substantial 73% of consumers claim they are unlikely to do business with a company that loses their trust.
The process of building trust for a company is not straightforward, as trust is founded on various critical elements. According to PwC’s 2023 study, the primary attributes that foster consumer trust include “protecting customer data” (cited by 79% of respondents), followed closely by “swiftly addressing and resolving customer concerns” (74%) and “delivering a consistent and reliable customer experience” (74%).
Returning to the realm of online marketplaces, it is undeniable that they bear a crucial responsibility in safeguarding sensitive data. However, comprehending the division of responsibilities, particularly when it comes to securing transactions and purchases, can be perplexing. On one hand, marketplaces assert that their principal role is to facilitate connections between buyers and sellers. On the other hand, buyers understandably expect the marketplace to guarantee their protection and the security of their transactions.
In order to establish the marketplace’s realm of responsibilities, let’s first clear out the different types of threats that can occur on marketplaces.
First and foremost, the most critical risk is the presence of illegal content on your platform. When we refer to 'illegal' content within a marketplace, we are addressing highly illicit products and services such as firearms, weaponry, drugs, and prostitution. Hosting such items not only poses a severe threat to your brand's reputation but also opens the door to potential legal repercussions.
For 'Illegal content', this category encompasses anything from nudity to profanity. While it does not necessarily lead to legal issues, it raises moral concerns. Users should have confidence that they, their friends, or family members won't unexpectedly encounter such content on the platform.
While not as existential a threat, counterfeiting remains a pervasive issue. According to U.S. government statistics, the annual trade in counterfeit goods ranges from $1.7 trillion to $4.5 trillion. If counterfeiting were a country, it would rank among the world's largest economies. Once again, hosting counterfeit products not only carries legal risks but also erodes consumer trust in the long run.
Preventing scams, such as hacked seller accounts or fake reviews, is of paramount importance to maintain consumer trust. The potential for scams is substantial. For instance, in 2023, Facebook Marketplace spans 228 countries and territories worldwide, with approximately 20 billion messages exchanged monthly between buyers and sellers, according to Meta. A UK survey revealed that 1 in 6 Marketplace users had fallen victim to scams in a region with around 51.5 million Facebook users.
'Misuse of the platform', includes issues like broken product links, improper keywords, or unrealistic offers. This directly affects the customer experience and closely relates to 'poor product information'.
The latter involves inadequate product information, which can undermine trust in the platform. This may include low-quality images, mislabeled products, or an abundance of duplicate listings.
Fraudsters may attempt to use stolen credit card information or engage in other payment fraud schemes within the marketplace. This can result in financial losses for both the platform and legitimate users.
Marketplaces must be vigilant about sellers who engage in fraudulent activities. This could include sellers who list items they don't actually possess, or who never deliver products after receiving payment. These fraudulent sellers can harm the reputation of the platform and erode trust among buyers.
Marketplaces need to be aware of and comply with various local and international regulations. Failure to do so can result in legal challenges, fines, or even shutdowns in some cases.
For more information on a particular EU rule 'DSA' scroll all the way down!
Although the list of threats listed above is far from conclusive, one can’t deny the number of risks marketplaces face, from legal threats to reputation-related risks. Although responsibilities aren’t always clear in regard to Trust & Safety, with the implementation of a rigorous DSA (EU’s New Digital Service Act), marketplaces will have to step up their game in order to remain compliant and avoid legal risks.
To succeed in the competitive world of online marketplaces, there are three fundamental pillars that must be offered. Think of these as the cornerstones of a successful marketplace strategy, with each pillar intricately linked to the others:
Understanding that your user base includes both buyers and sellers is crucial for marketplace growth. You need to attract and retain both user types to expand your platform’s reach. To gauge your success in these areas, you should establish key performance indicators (KPIs) to measure and monitor your progress.
By focusing on these three pillars and monitoring these key metrics, a marketplace can establish a strong foundation for success and growth while ensuring a safe, user-friendly, and high-quality environment for all participants.
The fast-paced growth of online marketplaces has underscored the critical importance of trust and safety in this evolving landscape. Maintaining and building trust within a marketplace has never been more essential, as the consequences of losing customer trust can be detrimental to any business. With the upcoming holiday season on the horizon and the implementation of the Digital Services Act (DSA), marketplaces must step up their safety efforts like never before. By doing so, they not only protect their brand and reputation but also provide a secure and enjoyable environment for their users.
Leveraging the expertise of a trusted outsourcing partner like The Nest by Concentrix can be the key to navigating these challenges and thriving in the competitive world of online marketplaces!
If you’re looking to improve your operations, enhance safety, and ensure compliance, don’t hesitate to reach out to us. We’re here to answer all your queries and provide the support you need to succeed in this ever-evolving marketplace landscape.
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We offer a wide variety of services, all of which are customized to the client’s individual needs, and available 24/7 covering >95% of all languages, including:
Thanks to our dedicated outsourcing model focused on agility and flexibility, and our team of industry experts present in +70 countries, we already support the growth of some of the world’s most exciting marketplaces, on all their CX topics around the world!
Trust us today and let all your players trust you tomorrow.
Leveraging the expertise of a trusted outsourcing partner like The Nest by Concentrix + Webhelp can be the key to navigating these challenges and thriving in the competitive world of online marketplaces!
If you’re looking to improve your operations, enhance safety, and ensure compliance, don’t hesitate to reach out to us. We’re here to answer all your queries and provide the support you need to succeed in this ever-evolving marketplace landscape.
The Digital Services Act (DSA) of the European Union represents a highly significant piece of legislation, poised to have a profound impact on Europe. It is scheduled to be fully enforced on February 17, 2024, although it is already in effect for 19 of the largest digital players.
The DSA introduces a new set of regulations with two main objectives: enhancing the safety of online users by providing stronger protections for their individual rights and fostering greater innovation and growth among all online businesses. This is particularly beneficial for small businesses, as it levels the competitive landscape.
Starting from August 2023, the DSA has been implemented for 19 major tech companies with over 45 million active users in the EU, constituting approximately 10% of the EU’s total population of 450 million. These companies include prominent social media platforms such as X, Instagram, and TikTok, the search engine giant Google, and the online encyclopedia Wikipedia. Additionally, it applies to significant online marketplaces like Alibaba, Amazon, and Zalando.
The Digital Services Act (DSA) will bring about significant changes for top-tier marketplace operators, including:
In summary, the DSA will demand marketplace operators to take comprehensive actions to ensure the safety, transparency, and quality of their platforms, with non-compliance leading to potential repercussions and the need for significant operational improvements.
We already support some of the most exciting marketplaces around the globe with customer service outsourcing 24/7 covering >95% of all languages, KYC services to verify user’s information, alert management to screen suspicious transactions, and more!
