This week OnBuy announced 600% revenue growth for the second year running, having also revealed 24,000% GMV growth at the end of this fiscal year – just four years after the marketplace launched. With such extraordinary results as the marketplace continues to go from strength to strength and an exclusive ITV advertising campaign in the bag, I caught up with OnBuy Founder and CEO, Cas Paton to discover the secret behind the marketplace’s success.
Having worked with a variety of online retailers over the years, Cas says he saw the need for a new type of marketplace, “The traditional marketplace model is flawed as it favours the marketplace rather than the retailers. This obviously puts retailers off, especially given that there are concerns about their sales data being used against them in order to grow the marketplace’s sales, so there was a clear gap in the market for a transparent marketplace that treated sellers fairly.” After identifying this gap in the market, Cas set his mind on filling it, by making OnBuy a reality.
OnBuy is a unique challenger to other online marketplaces because it operates a different marketplace model that’s never been seen before. The marketplace does not hold or sell any of its own stock, only that of its sellers and it’s pledged never to compete against them. Cas explains that as a result, “We’re able to offer a better experience for buyers and sellers, and also scale rapidly without the problems that traditional marketplaces face. We’re here to help our sellers grow their businesses, not our own sales, which encourages them to list more products, ultimately driving more competition which brings more choice and better prices for buyers on a huge variety of products.”
But building the marketplace to achieve such impressive growth has not been without its challenges. The biggest challenge facing Cas and his team was in the initial set-up period when their mission was to attract sellers – something particularly difficult to do when the marketplace had no buyers at that time and no products. However, fortunately for the OnBuy team, Cas explains that they “were able to work with retailers who saw that they were more than capable of achieving their vision of providing a viable, trusted marketplace for buyers and sellers.” With this trust in the company mission, Cas and his team have certainly been able to deliver; achieving a 1100% uplift in sales in just 12 months and securing £5m in Series A funding. Always seeking bigger and better results, the vision does not end there for Cas, as OnBuy’s plans for global expansion put the team on track to generate £2 billion in sales by 2024.
While the Covid-19 pandemic continues to hammer the high-street, for OnBuy it has in many ways helped to accelerate their success. Cas tells me, “The popularity of online shopping has exploded in recent years, and especially so these past few months. I think the spike in online shopping seen during lockdown will continue, as more and more people now realise just how easy it is to get anything you want delivered to your door. Advances in mobile shopping have definitely contributed to this uptake in online shopping as well. The convenience offered by a mobile shopping experience has no doubt been the biggest driver – people can buy from anywhere at any time, and they’re no longer restricted by store opening times or limited in-store options. A shopping experience that provides convenience and choice is evidently the future of ecommerce.”
For some businesses, the struggling highstreets open opportunities for online marketplaces to strengthen their mark in local communities with physical stores. With online giant Amazon already exploring how it can operate with a physical presence, I asked Cas whether he sees OnBuy expanding to physical stores in the future: “I don’t see OnBuy ever having physical stores – at least not as they are now. If a delivery infrastructure was in place that would allow us to provide buyers with the same incredible amount of choice and convenience as we can now, then maybe, but we’ve got plenty of expansion planned without needing to roll out physical stores”, Cas explains.
The expansion OnBuy has been able to achieve so far has been significantly strengthened by its work with ecommerce integrators which have allowed the marketplace to provide sellers with a seamless selling experience, no matter the type or size of their business. Cas tells me, “You can’t efficiently run an ecommerce business without integrations. You can have the best business in the world, but if you can’t coordinate each aspect of it – such as payments, fulfilment, order and inventory management and so on – into one streamlined operation, you won’t be able to provide a seamless customer experience or scale easily, so you’ll just hinder yourself.”
With the support of both retailers and integrators, it’s fantastic to see just how much Cas and his team are achieving and at such an accelerated pace. At Pentagon we’re excited to follow OnBuy’s journey and see their continued success as they action their plans for global expansion. If you’re a brand or retailer interested in exploring marketplace integration, book a free 1:1 consultation with our ecommerce experts today at www.wearepentagon.com/contact and we’ll explain how we can also get you trading online in less than two weeks.
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