Imagine that you are in a busy market, filled with vendors calling out to sell their goods - fruits, vegetables, clothes, accessories, toys, and tools. You walk around, compare prices, and find everything you need in one visit. Now, picture the same experience on your phone, where every product, from diapers to drill bits, is available at the tap of a button. Online marketplaces aren’t just changing how we shop - they’re bringing the entire market to your fingertips, making life simpler and more convenient. 

The IAMAI and Kantar Research predict that internet users in India will rapidly increase from 759 million in 2022 to 900 million by 2025. This surge will also lead to a larger customer base for online purchases. Furthermore, the pandemic has fostered a growing online shopping culture. Online marketplaces for products and services are platforms that facilitate interactions between buyers and sellers. These marketplaces are typically categorized as either vertical or horizontal. Horizontal marketplaces, like Amazon, aim to attract a broad audience by offering a wide range of products, while vertical marketplaces, such as FirstCry, cater to a specific audience with a particular category of products. The success of vertical marketplaces largely depends on their specialization and the added value they offer within their niche. 

To understand current ecommerce trends, let’s consider the shift from physical, individual brand stores to large megastores where various products can be found under one roof. This shift provided the convenience of reducing the need to travel to various locations for purchases. When this concept moved online, it gave rise to the horizontal marketplace model, with companies like Amazon and Flipkart thriving. Since online shopping eliminates travel, consumers benefit from personalized and customized services that cater to their needs. While horizontal marketplaces offer a wide range of products and, therefore, have divided attention, vertical marketplaces focus on a single field, providing expert solutions tailored to consumers. Uber, one of the pioneers in its sector in the world, is a taxi service that allows you to book taxis instantly online. Their niche specialization allowed them to introduce various distinctive features that even today are one of a kind. They were the first to introduce real-time tracking, multiple drop-offs, split the fair and cashless payments among other things.  

In the last three years, vertical marketplaces have attracted 90% of marketplace funding. This has been driven by innovation and disruptions in the FinTech industry, which have greatly benefited vertical marketplaces. The inclusion of additional financial features offered by FinTech companies into vertical marketplaces has expanded their customer base and provided tailored financing solutions for different users. The ease with which FinTech, SaaS, and AI solutions can be integrated into marketplaces has given rise to more advanced, dynamic, user-centric platforms. As a result, these "supercharged" marketplaces have seen a significant increase in funding. 

The introduction of B2B vertical marketplaces has democratized supply chains, increased transparency, and unlocked new revenue streams. API-driven, supercharged B2B marketplaces offer flexible, scalable solutions with real-time inventory, product catalogues, and pricing information. These vertical B2B marketplaces have enabled industries that rely on less frequent, high-value transactions (such as manufacturing) to benefit from ecommerce platforms. In fact, B2B marketplaces attracted an all-time-high 20% share of marketplace funding, as they were less affected by economic uncertainties.  

The success of vertical marketplaces lies in their niche expertise, focusing exclusively on a specific industry or product category to provide tailored solutions that general platforms cannot match. A notable example is Hashtagsteel.com, which has brought the buying and selling of steel—traditionally an offline, in-person operation—into the digital realm. This innovation aligns with the broader shift in the ecommerce landscape toward specialized, user-centric platforms that meet the unique needs of their target markets. As internet penetration continues to grow in India and digital solutions reshape conventional supply chains, Hashtagsteel is set to play a pivotal role in defining the future of the 'buy steel online' experience. Hashtagsteel is not only embracing the future of digital commerce but also setting new standards for reliability and convenience in the steel industry. This shows us without a doubt that Vertical Marketplaces are here to stay.  

References 

Adevinta ventures report: "Supercharged" Marketplaces set for major growth, while real estate funding growth down 76% YoY. (2024, February 15). Online Marketplaces. https://www.onlinemarketplaces.com/articles/adevinta-ventures-report-highlights/ 

Commerce, V. (2022, September 6). Vertical B2B marketplaces: A new marketplace paradigm. Virto Commerce - B2B Innovation Platform for Enterprises. https://virtocommerce.com/blog/vertical-b2b-marketplaces#:~:text=However%2C%20recent%20years%20have%20significantly,connections%20through%20supply%20chain%20applications 

Dayalani, V. (2022, June 27). Decoding India’s rising wave of vertical marketplaces. Inc42 Media. https://inc42.com/features/decoding-indias-rising-wave-of-vertical-marketplaces/ 

The rise of vertical marketplaces in the Indian e-Commerce space. (2016, February 5). Entrepreneur. https://www.entrepreneur.com/en-in/marketing/the-rise-of-vertical-marketplaces-in-the-indian-e-commerce/270441