Market business in Europe is booming, even if players face a number of challenges. MANGOPAY’s Chief Revenue Officer, Luke Trayfoot, explains the current situation, looks to the future and offers tips for expansion.
Where does this trend towards more markets come from that we’ve seen in a while?
MANGOPAY was founded on the belief that e-commerce platforms will accelerate and become the norm, leading to meaningful changes in the way we consume and trade. In 2013, this was an ambitious vision realized today through our success, which is above all the success of entrepreneurs who trust us. In recent years, markets have grown twice as fast as e-commerce in general and needs have changed throughout the supply chain. End consumers want to easily make purchases from home or on the go with their smartphones, the flea market is booming due to sustainability concerns and the pandemic has given e-commerce an extra boost. In order to meet the needs of all players and continue to grow, more and more merchants are turning to the market. There they can present their offers to a wide audience, take advantage of reliable marketing tools and sales processes and offer the best possible shopping experience to the target group. The year 2021 proves that nothing can stop the growth of markets. In 2022 and beyond, markets will undoubtedly play an important role in the strategy of all companies.
This sounds very positive. But what are the biggest challenges facing the markets today?
The challenges are extensive and ultimately different from one market to another. However, there are also recognizable patterns: many providers struggle to prioritize their roadmap in a meaningful way and ensure that payments are working optimally. The two-way relationship between sellers and buyers that exists in the markets introduces a number of complications to payments. The market takes the role of intermediary and should always aim to provide professional, secure and stable payment services. In addition to accepting the payment that every e-commerce seller faces – including the number of different methods accepted, currency conversion, and ensuring the best customer experience in the checkout process – the issue of payment is also critical to seller retention and loyalty. Payments must be properly split when necessary, for both commissions and when multiple sellers participate in a single payment. All of these topics are challenging, but they can be mastered with the right tools and partners.
How can markets position themselves for the future and what do they need for that?
First and foremost, markets must always keep an eye on the supply side, otherwise, in the worst case, marketing and sales spending can be burned on the demand side with little or no return. Doubling the supply is a surefire way to lay the foundation for the longevity of the market. Also, many markets have had success using a vertical strategy that specifically targets a particular user group or demographic. This can also be a profitable method of positioning. For example, the pandemic has accelerated digitization and market use of B2B platforms. Online purchases in this segment have increased by 94 percent since the onset of COVID-19, and by 2024 B2B marketplaces will account for nearly 30 percent of all B2B online sales worldwide. Barley is a good example of the potential of B2B platforms.
How do you think the market situation will develop in the next five years?
As mentioned, one of the most important changes is that B2B markets are a thriving market. This trend is expected to increase further. Gartner Predicts estimates that by the end of this year, 75 percent of purchases will be made through the marketplace. The success of the B2B market model reflects the evolution of the behavior of professional buyers. Another trend I think is to consolidate smaller markets by merging with larger players. In addition, we are seeing more and more market entry from the US – and here too, there are exciting possibilities and new challenges.
What advice would you give to entrepreneurs who want to realign their strategy for the European market?
I always advise going to the areas in person and carefully analyzing the entire life cycle of the relevant product or service category. The better you know the market and the prevailing conditions for the offer in question, the more securely you can position yourself. The focus should be equal on both offline and online presence, as both areas provide valuable insights into the market situation and potential success opportunities.
What should companies wishing to expand internationally consider?
Some of the critical factors in expanding are payments, taxes, shipping, and a routable market for what each business wants to do locally. Significant shifts in cultural behaviors can be observed across Europe in all of these areas, with some markets being more advanced and more easily adopted than others. It is also important to remember that market entry can vary from country to country in terms of cost, availability of skilled labor, and business considerations. The better the administrators are informed in advance and the more extensive their exchange with local specialists on site, the easier it will be for them to expand.
sYou are the chief revenue officer of MANGOPAY. What exactly are the duties of a CRM, what skills do you need and what makes this role especially important for companies?
The role of Chief Revenue Officer (CRO) is a key position that has a direct impact on the future of the company because it involves taking responsibility for all revenue-generating processes within the company: sales, marketing, and partner strategy. As a CRM, I make sure that we as a team align revenue-related functions including go-to-market, customer service, partnerships, revenue processing and pricing in a purposeful and strategic manner. Above all, the Chief Revenue Officer must think in a solution-oriented manner and be able to make decisions quickly. Because the secret of success lies in the right combination of long-term perspective and rapid implementation of concrete actions.