As e-commerce marketplaces continue to open their gates to attract and onboard more third-party sellers and their related gross merchandise value (GMV), without sufficient and efficient scrutiny, bad sellers with illicit products unavoidably infiltrate the system and pollute the whole ecosystem.
The Organization for Economic Cooperation and Development estimates that pirated and counterfeit products currently make up 3.3% of world trade, more than $1.5 trillion worth of which is sold online globally.
As consumers access more internet shopping options, the risks involved with losing consumer trust have never been higher. In fact, Adobe’s new Future of Marketing research reveals that 74% of consumers surveyed say they will stop purchasing from brands that break their trust. With the rise of shopping alternatives, consumer loyalty has plummeted. And when consumer trust is violated, it’s extremely tough to win it back.
Marketplaces can no longer merely act as tech platforms without responsibility for what is being traded on their platforms. Regulation is here, and there are strong tailwinds toward stricter regulations for platforms. The SHOP SAFE Act, America COMPETES Act, European Digital Services Act, and Total Recall Act all aim to promote more transparency and compel seller platforms to implement proactive measures to screen goods before displaying those to the public.
Marketplaces need to prioritize protecting e-commerce in its entirety. If consumers lose confidence in the overall process, everyone will suffer the consequences. Major marketplaces, including Amazon, have introduced initiatives to stop the sale of counterfeit goods and win back customer trust. Meanwhile, authentication programs are being established to verify products, including deploying large teams of analysts to examine individual goods for legitimacy.
Other steps to protect the shopping experience include:
- Creating a strategy to ensure sellers follow unique marketplace policies.
- Ensuring your tech partners are updated on the industry’s existing and upcoming rules and regulations.
- Considering an automated AI-driven solution to scale and grow your business into new markets and geographical regions.