In Marketplace model, the online retailers do not need to store the products in warehouse as in inventory-based model. 

Recently, Flipkart.com announced the launch of Flipkart Marketplace. “With the launch of marketplace, numerous large and small sellers will now have access to Flipkart's huge traffic of 1 million visits every day,” the company said.

According to eBay and Snapdeal, the early players in marketplace e-commerce, the entry of new players into the marketplace platform will help in expanding the e-commerce market & develop the system further.  

Speaking to fibre2fashion, ecommerce eveangelist of eBay India, Ms. Deepa Thomas said, “A successful ecommerce business is one with a scalable & sustainable business model which provides consumers with the benefits of selection, convenience and access to products.”

“Online marketplaces lend themselves well to this by providing consumers with vast selection by leveraging the inventory of thousands of individual merchants, small medium businesses & brands allowing marketplaces to play in many categories & cater to demand from consumers in many cities,” she adds.

Echoing her, Mr. Amit Maheshwari, Vice-President of Fashion Merchandising - Snapdeal.com, says, "The greatest advantage of marketplace platform is that there is no inventory holding and the seller gets the opportunity to directly communicate with the customer. As compared to inventory models it also gives a wide variety of choice for customers to buy. So it will positively impact the growth of e-commerce in India.”

However, Mr. Ashutosh Lawania, co-founder of Myntra.com, disagrees. He says, “The inventory model is most suitable for fashion and lifestyle business since in the online fashion and lifestyle space it is important to maintain relevant stocks which are in line with the current season's trends. The inventory model also gives the company total control over the quality and authenticity of the product and service when compared to a marketplace model.”       

Fibre2fashion News Desk - India