3 simple steps to analyze B2B eCommerce platform market

If you are working in the eCommerce area you know that choosing the right eCommerce platform according to your business needs is a very important question. If you plan to run a B2C online store, you will choose an eCommerce platform according to the scope of the goods you sell, the size of your business, your plans and objectives.

If you plan to enter in B2B eCommerce market and produce products or services for eCommerce store owners, you should make quite a similar action: find the most profitable eCommerce platform market where you plan to work at.

Let’s say, you have a software company and now you want to expand your business by developing Shopify apps, Magento extensions, Woocommerce plugins or making custom software solutions for one or several eCommerce platforms.

In this article, I will show how to make an eCommerce platform market analysis in 3 simple steps and evaluate the most important factors for future success.

eCommerce platform popularity

First, you need to evaluate the size potential market to enter. In other words, if you plan to work on a certain eCommerce platform market, you should find out how many eCommerce stores are on the market based on this eCommerce platform. 

Several very useful online services allow us to evaluate and compare eCommerce platform popularity worldwide or in a certain country.

In my opinion, the best one is Buildwith.com. This website provides some statistical information about web technologies usage. For example, you may find out, how many websites, based on a certain eCommerce platform, are in the Top 10K of most visited websites, Top 100K, Top 1M or in the Entire Internet.

Here are several definitions to make things clear.

• Builtwith Top 10K, 100K, and 1M are mixtures of the appropriate Top Quantcast and Alexa websites.
• Quantcast calculates a website rank on the base of US-based visitors a month.  
• Alexa Tops are based on its traffic rank which is calculated from a combination of daily visitors and pageviews on a website over a 3-months.

So, you need to choose the right eCommerce platform distribution for analysis.

Hints

If you plan to produce extensions or plugins you should choose the Entire Internet distributions for analysis because all stores based on a chosen platform are potential clients.

If you plan to offer custom development services, your targeted audience are popular websites with good traffic and business size. So, you need to analyze the Enterprise segment and platform popularity among Top 100K or Top 10K.

Previously I mentioned a common mistake that was made in Magento platform popularity analysis. Analyzing Magento extensions market researchers took into account Top 1M websites distribution while they should research Magento Platform popularity in the Entire internet.

We can see that Shopify is the most popular eCommerce Platform at this moment (Sept-2019).

Note

Be very careful with these numbers. Buitwith advised that a website may use more than one CMS system and many technologies.

This diagram provides us with the correct answer to the following question:

What are eCommerce Platforms Market Shares? 

As I mentioned in the article about Magento market share:

eCommerce platform market share = Number of stores based on a platform / Number of All eCommerce stores

According to this diagram, we have the following market shares:

• Shopify – 23%
• Woocommerce checkout – 13%
• OpenCart – 9%
• SquareSpace – 7%
• Prestashop – 6%
• Magento – 6%

Builtwith doesn’t show us the total number of eCommerce stores but it uses it for calculations.

So, according to the diagram, we have about 4,5M eCommerce stores worldwide (Sept-2019)

Other data sources for eCommerce platforms popularity evaluation

For further eCommerce Platforms popularity research, we may use Datanyze reports:

Note:

Datanyze uses Alexa website rankings.

There is one more useful data source for eCommerce platform popularity analysis:  https://www.similartech.com

Traveling through Tabs you may notice that Tops reflects previous eCommerce platform popularity.

For instance, we can see that Salesforce Commerce Cloud and IBM Websphere Commerce platforms are the most popular in Alexa Top 10K websites. It means that these platforms were very popular more than 10 years ago. But the situation has changed over the years. Ecommerce platform popularity shifted to Magento (To 100K. Top 1M). Now Woocommerce and Shopify are leaders.

So, to better understand the eCommerce platform market we need to analyze eCommerce platform dynamics. 

eCommerce platform dynamics

If you have already chosen the eCommerce platform and develop extensions, plugins or produce custom solutions, you should monitor your platform popularity dynamics. You need to find out whether a chosen platform’s popularity is growing or declining.

Let’s take a look at Shopify popularity dynamics according to Builtwith:

We can see the explosive growth in the eCommerce platform popularity since 2017.

On its turn, Magento ceased its growth in 2015 because of Magento 2 release. The platform begins to grow again in the second half of 2019.

There is one more useful tool to evaluate eCommerce platform popularity dynamics: Google Trends

Google Trends shows us the number of searches specified eCommerce platforms. As I mentioned before, the search volume of a brand could be evaluated as a brand awareness signal. Such a signal should correlate with platform popularity.

 On this stage, you know the volume of your potential targeted audience and its trend to grow or to decline. Now it’s time to make a competitive analysis

Competitive analysis

At this stage, it is very important to find out the level of competition in your niche. In other words, how many competitors are on the market, and who they are?

Competitive analysis is a sophisticated multi-stage process. At first glance, you should know the following information:

• Who are your primary competitors?
• What competitive products or services do competitors have and developing? Research your competitors in terms of actual products and product activities.
• How do your competitors target their audiences? Make competitors research in terms of marketing activities.
•  Evaluate the level of competition at your targeted market (high, medium, low)

At this step, you will have 3 important eCommerce platform market parameters

• Popularity
• Dynamics
• Competition level

Now we are ready to discuss creating a successful strategy on a chosen eCommerce market. 

Let’s make a small generalization. Such a simple methodology could be useful in any software-based B2B segment analysis such as CRM or CMS based market.

How to analyze any software-based B2B segment

Now using 3 simple steps you may analyze any chosen B2B segment:

CRM B2B Market analysis 

  CRM Popularity Distribution

 CMS Popularity Distribution

Product development vs Product marketing

To have success in the highly competitive B2B eCommerce market, anyone should pay attention to two components: development and marketing.

 Let’s consider several simple and straightforward situations. Some of them I already described here for the Magento extensions market. 

Product is king

It’s a very common situation for a lot of software development companies. They have a lot of developers and a few or no marketing specialists. It could be reasonable in the following situations:

1. If you have a unique product or a small number of competitors. There is a very similar situation when you have a very popular product that is hard to copy. In this case, you may invest most of your resources in product development. Anyway, people should know about your product otherwise it doesn’t matter how good your product is. 
2. If your eCommerce platform market is declining (as Magento), it means that there are a small number of new customers on the market. All customers already accustomed to all similar products and made a choice according to their preferences. No marketing efforts will lead to sales increase without significant product improvement.

Marketing is king

1. If competition is very high, and there are many similar products and similar companies in the market, you should pay extremely high attention to marketing and sales. Sometimes it is very difficult to find differences between very similar extensions, apps, or plugins. In this situation, marketing is king.
2. If your eCommerce platform market growing very fast (as Shopify), it means that a lot of new customers appears. They are not very experienced in the products on the market, so they are extremely sensitive to marketing activities.

In the case of developing solutions for an eCommerce market such as extensions, apps, or plugins, both product improvements and marketing efforts are very important. 

Appropriate Marketing activities should be implemented along with the development of competitive products.

Companies with a lack of marketing or development activities

will lose the market

Both kinds of activities are important to get success in B2B eCommerce platforms markets.

Moreover, it is impossible to create any mass product that cannot be copied. Usually, any app or plugin has many variations from different developers with almost the same functionality. 

In this common situation, the most important factors are a company’s brand awareness and reputation, the customer’s confidence, the number of satisfied clients and overall customer care level.

Conclusion

Evaluating any B2B eCommerce market, we should pay attention to 3 main characteristics:

• market size (the platform popularity):
• dynamics (popularity growth or decline)
• competition in your niche.

To be successful we need to pay attention not only to the product’s competitive advantages but also make appropriate marketing efforts to reach appropriate audiences and win its confidence and trust.