Marketplace vs Platform vs Aggregator: Key Differences

Marketplace

Marketplace

A marketplace connects sellers and consumers and acts as an intermediary that handles payment. Representative marketplaces include eBay and Amazon. In a marketplace, the authority over service quality rests entirely with the seller, and since the main revenue source is fees from matching, advancing the matching (or recommendation) algorithm between suppliers and consumers is important.

Platform

Platform

A platform provides producers with tools to create content and gathers it in one place. On a platform, consumers can become producers, and producers can become consumers again. Instagram and Facebook are representative examples. Creating a Network Effect is important on a platform.

Service Platform

Unlike a marketplace, a platform that controls both price and quality is called a service platform. Because service platforms control both price and quality, Coupang Eats is an example. In Coupang Eats, delivery fees change and are determined by supply and demand, and since service quality determines the entire brand image, efforts to improve quality are important. Therefore, it requires more quality responsibility and cost than a marketplace or an aggregator. The most important thing is securing initial transaction volume (= network effect).

Aggregators

Aggregator

An aggregator collects various data in one place and acts as a search engine that reduces Information Gap. TripAdvisor, Karrot, and price comparison sites are representative examples. Aggregators require the least resources compared to marketplaces and platforms, but their commissions and economic moats also tend to be small.