Supermarket giant Woolworths the owner of Big W is moving into the marketplace market in a move that will see them go head-to-head with Amazon eBay and Kogan.
The move opens the door for CE and appliance distributors as well as brands, to sell directly with only margin to worry about as suppliers baulk at the add on expense that retailers are demanding today according to several suppliers that ChannelNews has spoken to.
Woolworths has made a multimillion-dollar investment in Melbourne start-up Marketplacer as part of its plans to compete with the likes of Amazon.
The deal done by Woolworths’ venture capital arm, W23 will see the establishment of a pilot.
Several CE distributors have said that they would supply product if the concept “Is viable and delivers a growth audience”.
Other high-profile investors, including tech giant Salesforce and prominent investment firms Endeavour and Acorn Capital.
Marketplacer was founded in 2016 by Jason Wyatt and Sam Salter. The start-up helps retailers create their own online marketplaces, similar to those offered by eBay or Amazon, and sell both their own and third-party products. This allows companies to effectively offer a larger range of products without having to stock the items themselves the business claims.
Woolworths will leverage its investment with a range of everyday Big W products that will include CE and appliances which have delivered growth during the past year at Big W.
Brands and distributors who already sell to Big W can also range their products direct on Marketplacer.
The supermarket’s head of new business, Faye Ilhan, said the new offering was intended to help the company keep up with shopper expectations, who have become increasingly accustomed to shopping online post-COVID.
“As more of our customers start their shopping journey digitally and buy groceries online, we know their expectations will only continue to rise,” she said.
“This will be a highly curated marketplace focused on range extension in our core everyday needs categories and we look forward to exploring opportunities with supply partners.”
Woolworths’ foray into this space will the business butt heads with other marketplace heavyweights such as eBay, Amazon or Kogan. However, the marketplace model is becoming increasingly commonplace among other retailers, with Bunnings, Myer and Metcash all opting for the service.
Mr Wyatt said he was excited to have Woolworths on board as an investor, saying the business decided to invest after undertaking a global tender to find a new marketplace partner.
The retailer’s shareholding in the business is a “very small minority stake”, Mr Wyatt said and doesn’t provide Woolworths with any exclusivity over the company’s platform, meaning Marketplacer can continue to work with other existing clients such as SurfStitch, Nokia and Providoor.
W23 managing director Ingrid Maes said: “W23 invests in innovative start-up’s that accelerate our ecosystem strategy, and where long-term win-win partnerships are an inherent advantage for both parties.”
“Marketplacer is a leading platform for an increasing number of global retailers exploring third-party marketplace strategies and will play a key role powering our own digital improvements.”
