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07 December 2022

How to Develop Online Marketplace like Ukrainian Prom.ua?

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Prom.ua - the largest marketplace in Ukraine, which employs over 700 thousand sellers and has more than 100 million different products, ranging from toothbrushes to large commercial real estate. The platform is ranked thirteenth in terms of Internet traffic in Ukraine in general and the first in the "E-commerce and shopping" category. Next we will tell you about how this startup succeeded to become the leader of e-commerce market in the country and how to develop your own online marketplace like Ukrainian Prom.ua.

A brief summary of Prom.ua marketplace


The history of Prom.UA is banal to say the least. Three programmers - Nikolay Palienko, Denis Gorovoy and Taras Murashko - wrote a code for the project in 2008, which was initially conceived as an "online website builder" for those who want to bring their business online. Then these guys decided to spend their salaries on advertising, and after some time (six months after the launch) a specialized foreign investor came to them himself and bought part of the business for $1 million.

However, the prototype for the founders of Prom was Alibaba, and they wanted to develop only the B2B segment. But a few years after the launch, the company's management discovered that the platform was increasingly interested in B2C, so they expanded the functionality of their site into a marketplace with three sections: products for companies, for end users and services.

Therefore, Prom.UA in five years after its launch has experienced a large-scale transformation from a B2B website builder for e-commerce to the largest Ukrainian marketplace, where you can buy everything - from pencils, dresses, dogs and ending with climatic complexes and fireplace portals. Moreover, sellers have two options for cooperation with Prom.ua:

How to create a platform like Prom.ua


To create such a Prom marketplace is a fairly complex software solution, which should be not only simple, convenient and pleasant in appearance, but also ensure a high level of security and reliability. Also such a marketplace should have a high bandwidth, sufficient to serve hundred thousands of sellers and dozens of millions end buyers. You can only achieve this by developing a marketplace from scratch.

This software should be developed by a highly professional development team with experience in launching relevant solutions such as Merehead. However, it is important because only a team like this can take into account all the nuances and peculiarities of this market and implement them in the code.

Niche and Target Audience



Which items people search most frequently on online marketplaces

It all comes down to the idea. Before you start planning the future functionality of your startup, choosing the technology stack and searching for the optimal business model, you have to analyze the potential of the chosen niche. There are tens in thousands of marketplaces on the Internet and your task is to find the optimal market for launching a new site. Ideally, it should be a "blue ocean" - a new niche with no competitors. But it is extremely difficult, so if you find a market with relatively few competitors, that will be good as well.

Here are a few tips that can help with finding such a niche.

Project value proposition


If you just launch a clone of Prom.ua (or Amazon), then this project is unlikely to be successful - why would users go to your marketplace, if they already use Prom.ua? In order for your marketplace to attract attention of buyers and sellers, you have to provide users with something that competitors don't have. In other words, you need to create a unique value proposition - a set of reasons that will entice users to your marketplace.

Here are the basic types of unique value propositions:

Business model and monetization project


As it was mentioned above, Prom is a marketplace focused on B2B- and B2C-markets. The marketplace provides the ability to sell a wide variety of products on its platform, as well as the ability to launch a separate page of the online store, whose products will be displayed not only in the listing of this site, but also in the general listing of the marketplace. The marketplace considers several models of monetization: subscription, commissions, advertising and additional services.

Subscription. At first at Prom.ua you could only post ads to sell goods and services, without the possibility of payment through the website. To make money, the platform offered the opportunity to launch a separate online store - a site with its own domain and a separate catalog of products. The cost of this service depends on the number of items posted. Now it is 5900, 7700 and 115000 UAH per year (160, 210 and 314 USD per year). This price includes not only the opening of the store, but also the budget for the promotion of this store within the Prom - 30-40% from the price of tariff.


The tariff plans price of Prom.ua marketplace. Source

Commissions. The second way to monetize is to charge small commissions on all trade transactions going through the marketplace. The size of the rates depends on the product group (consumer, industrial), the level of the seller's account (if the seller has many successful closed deals and good reviews, he gets bonuses and vice versa - bad sellers are restricted, very bad sellers are banned) and the product category. Typically it is from 2 to 15% from the value of the product or service.


The size of some commissions that Prom charges on trade transactions. Source

Advertising. Also the marketplace offers promotion on its platform through CPC (price per click) and CPA (price per action). If a customer clicks on any promoted item in the Prom catalog and then places an order with the seller, he will be charged for the service. Obviously, this will only happen if the product ordered at the site is added to the active campaign of this store, and if it has taken up to 24 hours for the buyer to click on the product in the Prom catalog. CPA and CPC fees are also calculated based on the product group, seller's account level and specific product category.


The cost of promotion through CPA and CPC on the platform Prom. Source

Services. Besides, Prom offers an opportunity to connect several additional services, for example PromPayment - the buyer transfers money to the account of the marketplace, the seller will receive it only after the buyer picks up the parcel at the post office. The commission for the transfer of funds paid by the payer (buyer) to the financial partner of Prom.ua, is

In this case the seller himself pays the bank commission for Internet-acquiring service (2.2% of the transfer amount).

Key functions of Prom.ua marketplace


The functions of the user shopper's panel:

Functions of the custom merchant panel:

Functions of the custom administrator panel:

Information architecture.


Depending on the complexity of your marketplace, the architecture can be multi-tiered or microservices. If your platform hasn't been too complex yet and you don't plan to develop it as a large marketplace that will include many subsystems such as inventory management, order management, chat system, analytics, etc., a monolithic architecture will be sufficient. Otherwise, you need to create a microservice architecture.


An example of a microservice architecture for an e-commerce platform. Source

Backend, frontend and API


Frontend. These are all the components of the marketplace with which users will interact. In the case of launching a platform such as Prom.ua, the frontend includes a web interface and mobile applications separately for buyers and sellers. They are created with the help of such technologies:



Backend. It is the hardware and software part of the system, which is responsible for working with data and implementing the functioning the internal part of the application. Here is how the stack of technologies for the development of Prom.UA clone looks like:

API (Application Programming Interface). This is a set of protocols for connecting the frontend and backend, as well as integrating third-party services that extend the functionality of the marketplace. Here is an example of a set of APIs:


Testing


Afterwards there has to be a thorough and comprehensive testing of the created software product in order to identify all the bugs and errors, as well as to make sure that the usability, functionality, security, throughput and other things are consistent with the terms of reference for the development of the marketplace. After this, the platform is added to various listings (including the Apple App Store and Google Play) and a support team is set up.

The cost of launching an analogue of Prom.ua


The cost of launching a marketplace like Prom.ua depends on a large number of factors: business model, functionality, number of integrations, complexity of design, location of development team and other. Here is an approximate budget for the development of such a project:
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