How Rue du Commerce successfully adopted a marketplace model
E-retailers may find the prospect of diversifying their business and revenue stream by launching a marketplace appealing, but it comes with its own set of business, operational and technical challenges. French e-commerce pioneer Rue du Commerce explains why and how it chose to launch its now highly successful marketplace.
At One to One Monaco, the premier event for e-commerce players, Mangopay hosted a roundtable discussion with partner Mirakl, outlining the history and challenges of French e-commerce pioneer Rue du Commerce's marketplace.
Alexis Ammar, Sales Manager for the France - Belgium - Luxembourg region at Mangopay, Luca Cassina, Executive Vice President Customer Success EMEA at Mirakl, and Benjamin Guigue, Head of Marketplace at Rue du Commerce, discussed the strong strategic choice to move toward a platform-oriented vision.
Benjamin Guigue from Rue du Commerce recounts the platform’s success story
Why did Rue du Commerce decide to launch a marketplace?
Benjamin Guigue: Rue du Commerce was created by two French entrepreneurs, Patrick Jacquemin and Gauthier Picquart in 1999, which makes it a French e-commerce pioneer.
At the beginning, it was a classic retail site that sold mainly computers and high-tech products, including the first cell phones, smartphones, and digital cameras.
You have to remember the context of the time: in the early 2000s, few consumers were willing to use their credit cards to pay on the internet, so Rue du Commerce was a site that rapidly gained a fairly technophile audience.
The site grew quickly and was often listed in the top 5 sites with the most traffic in France. In 2007, the founders decided to open a marketplace. Rue du Commerce was the first French B2C-oriented marketplace: we introduced new product categories, such as furniture, garden, household appliances, fashion, etc.
Why did the founders choose a marketplace model? Because they didn't have the buying power in those specific product families In terms of logistics, it was also very different from what they already knew how to do. They knew how to deliver a phone, so small footprint, low volume, high value. It's not at all the same thing when it comes to delivering a fridge, for example. So, it was decided to let the merchants do it themselves.
It was an opportunity to offer more products to consumers, to broaden the offer and to generate additional revenue without carrying inventory, with a virtuous effect on traffic of course. For the merchants who joined us, it was the possibility of reaching new customers who were different from the ones they would have on their own sites, and they knew exactly what fee they would have to pay for a sale.
What were Rue du Commerce’s goals when it first started working with Mangopay?
Benjamin Guigue: We started working with Mangopay in 2015-2016. Before, Rue du Commerce would collect the funds linked to the merchants' orders, keep them on our own bank account and then have to calculate the amount to be paid out to each merchant, so it was very cumbersome administratively and there were regularly a large number of transfers to process to pay each merchant.
Working with Mangopay has given us much more peace of mind and security in managing payments. The process is much more automated and reliable, and it also allows us to comply with the Payment Services Directive, which requires marketplaces to be backed by PSPs or to become financial institutions.
Why choose Mangopay and Mirakl?
Benjamin Guigue: We started with Mangopay in 2015. We started with Mirakl in 2015 as well on certain modules. We finished switching over to Mirakl about a year and a half ago.
Why? Because they are both French players and Rue du Commerce has always been attached to the French e-commerce ecosystem. That's the first point.
Secondly, both solutions are very successful, very complete, very efficient, so, to put it simply, there are no bugs, they work all the time, which makes them very reliable to use and very secure.
Also, what's great as a day-to-day user is that these two solutions are perfectly integrated and synchronized. I'll give you some very concrete examples. If, for example, a member of my team updates a merchant's administrative document, such as the business registration certificate or business owner’s identity document, it will automatically be sent to Mangopay, which will be able to analyze the document. Mangopay will automatically notify us whether or not a document is approved or not. Today, we no longer have to manage documents at all. It used to be quite tedious for us, but now Mirakl stores everything. The status of merchants is always up to date on Mirakl so we know exactly if a document or a merchant is validated or not, and if there is an invalidation, we know on what grounds so we can quickly intervene. This synchronization between the two solutions is very easy to use and very efficient.
Payment management is another major point for marketplaces. All we had to do was configure Mirakl the way we wanted our merchants to be paid and from that point on we didn't have to worry about anything else. Mirakl automatically calculates the orders that need to be paid, informs Mangopay, which handles the transfers. Merchants' balances are updated instantly. And, all the invoicing is automatically found on Mirakl and made available to the merchants. So it works well, it's synchronized, it's efficient and it's saved us a lot of money on accounting.
And the last point, and we didn't know this when we chose Mangopay and Mirakl, is something we've experienced over the years, is that both companies have very good customer service and very good support. Obviously, like all e-commerce players, we work with many partners and service providers, but clearly Mirakl and Mangopay offer a lot of support, and services and it's very appreciated when you are an operator to find solutions to your problems when you need them.
What is Rue du Commerce today?
Benjamin Guigue: Over the past 23 years, Rue du Commerce has undergone a lot of changes. After 5 years in the Carrefour group, we were bought by Shopinvest, and have been part of their group for about two years. Shopinvest is a French e-commerce group. They have given us back our agility, and our entrepreneurial spirit.
Rue du Commerce is now booming and very dynamic. What Shopinvest has done is help refocus us on our core business. Today, we are positioned as the expert in IT and connected homes and modern homes. This return to our DNA is important to us.
Nowadays, there are a lot of big generalist marketplace players and Rue du Commerce cannot compete with Amazon, for example, and it is important for our consumer that we have a clear identity, to be legitimate. Returning to our core categories has allowed us to regain this legitimacy and clear positioning in the market.
On the marketplace, we have 1,000 active merchants. We have many more in our database, but there are 1,000 merchants who work with us on a regular basis and we have a product catalog of 6 million products.
What are the future challenges for Rue du Commerce’s marketplace?
Benjamin Guigue: We have a lot of things in the pipeline, but what's important for us, for our marketplace, is to continue recruiting merchants. 70% of our merchants are French. We need to onboard more Asian merchants because our product categories, high-tech, computers obviously, include a lot of products that come from Asia.
We must also be able to onboard certain large European players present on other marketplaces abroad.
The last and perhaps most fundamental challenge for our marketplace is obviously our catalog: we need to broaden the range of products merchants can offer, and we also need to improve the quality of our catalog to attract consumers.
Listen to the complete workshop in French here.