How to Develop Marketplace like Ukrainian Rozetka?
Rozetka.ua is the most well-known online marketplace in Ukraine. Initially it was a business project of spouses Vladislav and Irina Chechetkin, who invested $250,000 in it, the service went through an amazing story of transformations during 12 years of its existence and has eventually become the Ukrainian analogue of Amazon. In this article we will explain why this family-owned startup is different from its competitors and how to launch your own analogue of Rozetka marketplace and the costs of such development.
Rozetka project was launched in September 2004 and got the first sales in June 2005. Initially, it was planned to be an online store selling perfumes and cosmetics. However, this idea was abandoned quickly as the official representatives of the perfume houses noticed the activity from the new startup and prevented it from selling their products.
Still, it didn't confuse the Chechetkins family. They agreed to this injunction and refocused on selling technology very quickly, as Vladislav (one of the founders) was working in the company SkyLine, which was engaged in computers and components. The name of the site - Rozetka - was invented along with the unofficial slogan of the new store: "We sell everything that can be plugged into a socket".
Rozetka store started working in June 2005. The first sale on the site took place a week later - a Samsung cell phone. By coincidence, in the next ten years the sale of cell phones will be the main profit of the store. Computers, laptops, gadgets and a variety of computer equipment and peripherals came after cell phones.
After a while it became possible to sell all kinds of kitchen utensils, alcoholic beverages, pet products, furniture, gardening and horticultural products, sanitary ware and food products on the Rozetka site.
Technically speaking, Rozetka is an online marketplace. Just like Amazon, AliExpress, or eBay. The following steps make up its development.
The first thing to do when launching any marketplace is to choose the optimal niche for launching your project. Yes, you can launch a site that is focused on selling "everything and for everyone", but then you will have to compete with such giants as Amazon in the USA or Rozetka in Ukraine - it is expensive, complicated and risky. It is easier and more effective to start with one niche and then, with the marketplace's popularity grow, expand to other niches, as Amazon, Rozetka, and many others have done.
Any product or service can be a starting niche for your marketplace, such as electronics, photo sales, car rentals, travel services, food delivery, or dating (yes, Tinder is also a marketplace).
Well, every product can become your niche, as long as the following conditions are met:
A critical mass of suppliers and buyers exists. A marketplace is a platform that brings together suppliers of goods and their buyers. The number of both should be as large as possible, because if the market is small, it is unlikely that suppliers will be willing to use your marketplace - in too "niche" markets, almost all buyers usually know the suppliers by name and don't require the intermediary's services. It's easier to buy directly from a supplier.
Here are some examples of promising niches for a marketplace:
Here are some examples of how often products and services are purchased:
Always keep these rules in mind, otherwise you can repeat the fate of NextMover. This online site has been offering help to people who want to rent a small truck to transport various goods when moving. The website easily managed to find financing, launched an excellent marketing campaign and received a lot of positive feedback. But after a brisk start, the project was decided to close. Its owners did not take into account that people move every 2-3 years, and the cost of renting a pickup truck is only $50-200, i.e. this niche has a low frequency of purchases, low price and a small audience, so NextMover business was initially doomed to failure.
The next stage of developing an online marketplace like Rozetka is to work out your unique value proposition, which is a set of reasons that will encourage sellers and buyers to use your site rather than competitors' sites or other options. Rosetta, like Amazon, has a unique value proposition - a combination of low price and fast delivery. But you don't have to go their way at all. More options are available.
Market Access Orientation. These sites try to maximize their audience to give providers of goods and services the biggest market for consumers. Uber Eats, Etsy, Netflix, Spotify, Udemy, Travelduck, Apple Store, and Google Play have all bet on this.
Focusing on the price of a product or service. This approach involves finding suppliers who will be willing to sell items on your marketplace at the lowest possible prices. This usually involves either a monopoly, or wholesale, or second-hand goods. Amazon, OLX, AliExpress, Uber, HostelBookers, Kyōyū, Couchsurfing, and Cycle.land have all chosen this path.
Speed Orientation. If your marketplace can deliver a product or fulfillment service very quickly, that can also be your unique value proposition. This is exactly how Amazon entices people to sign up for Amazon Prime. FedEx in the U.S. and Nova Post in Ukraine use the same approach, both of which offer fast postal delivery.
In terms of monetization, marketplaces use these models:
Platform Architecture. The next stage in the development of the outlet analog is to create an information architecture of the project, which will visualize the platform logic, mark its components and the relationship between them. It is also desirable to create a navigation map (information architecture, which will be shown the user flows - the actions that the user needs to perform before reaching his goal, such as registration or purchasing).
Here's an example of a stack of technologies that can be used to develop a marketplace like Rosetka:
Any online marketplace is a sufficiently complex software solution that must be convenient, highly functional and pleasant in appearance, as well as providing a high level of security and reliability. This can only be achieved by developing it from scratch, because ready-made solutions are always a compromise: a template design, low bandwidth, security risks and a monthly subscription fee to a SaaS solution provider, which is good for a quick and cheap start, but too expensive and impractical for long-term projects.
Furthermore, such a product should be designed by a team with experience in developing similar solutions, such as Merehead. Our company has been developing projects of different complexity in Ecommerce, FinTex, blockchain and cryptocurrencies since 2015. Explore our portfolio and find out the terms of cooperation via email@example.com or by calling +1-206-785-16-88, as well as the feedback form below the article.
The process of creating a marketplace from scratch consists of 6 steps:
The cost of developing an online marketplace like Rozetka depends on many factors, starting with the complexity of the project (the number and depth of functions and their development) and ending with the location of the development team (IT specialists' salaries in the US are several times higher than in Eastern Europe, Africa or Asia). Here is the approximate cost of developing the Rozetka analog: