E-commerce marketplaces are the apps and websites on which you buy goods from many sellers at once, pay online and have the goods delivered to your door. The term covers the big online marketplaces, and also the brands, retailers and resale sites that sell online beside them.
Imagine you are in Lucknow during a big sale, and you need running shoes. You type "running shoes under ₹2,000" into a shopping app. Or you ask its AI shopping assistant in Hindi, in your own words. In under a second, the app shows you shoes from dozens of sellers. Each listing shows a price, a rating and a delivery date: Thursday.
That app is an online marketplace. It does not own the shoes. Other sellers list them, and the marketplace earns a commission, a percentage of each sale. A retailer is different: it buys goods from their makers, owns them and sells them itself. The page on the marketplace vs inventory model explains the difference. The order of the results comes from e-commerce search and recommendations software, which decides which pairs you see first.
Several kinds of seller compete for your order. A shoe brand may sell on its own website as a direct-to-consumer (D2C) brand, and list the same shoes on the marketplace. Large brands often pay a company for marketplace management, which keeps their listings, prices and ads correct on every marketplace. A nearly new pair may also be on sale through recommerce, the resale of things already owned. For an expensive resale pair, product authentication checks that the shoes are genuine and not a fake copy.
You choose a pair for ₹1,849 and pay by UPI. A payment gateway takes the payment, and the seller is paid later, after the return period. The order is often packed close to you. A large retailer that runs omnichannel retail can pack it in a store a few kilometres away, from the same shelves that serve walk-in customers. A courier then carries the parcel to your door.
Your old shoes are still wearable. You photograph them and put up a short ad on an online classifieds site. A buyer from your area calls you, looks at the shoes and pays you directly.
India is also building an alternative to the single big app. On ONDC, the Open Network for Digital Commerce, a buyer can order through one company's app from a seller who is listed through a different company's app.
Much of the software behind the world's marketplaces is written in Bengaluru, by Indian marketplaces and by foreign marketplaces with engineering centres there.