Google Kills Its Marketplace Shopping

In recent news, Google has announced its decision to shut down its Shopping Marketplace, a platform that allowed retailers to directly sell their products on Google. This move marks a significant shift in Google's e-commerce strategy and raises questions about the tech giant's intentions in the online shopping space. The decision is set to take effect on 26th September 2023, with a subsequent focus on enabling shopping journeys and advertising rather than acting as a full fledged marketplace.

Google Shopping was initially launched in 2002 under the name Froogle, as a service that indexed product data based on specific search terms. In 2012, it transformed into a paid advertising platform, where retailers had to pay to be featured in the Google Shopping search results. From that point onwards, Google Shopping became an extension of Google AdWords, allowing businesses to advertise their physical products on Google using merchant-uploaded product data.

Between 2019 and 2020, Google actively recruited sellers and worked to establish its Google Shopping marketplace. However, the endeavour was short-lived, and Google eventually shifted its strategy, emphasising indexing e-commerce websites globally and partnering with platforms like Shopify and BigCommerce to ingest rich data from millions of stores. This change aimed to provide more comprehensive search results, combining both sponsored and organic listings.

Despite attracting nearly 8,000 sellers to its marketplace, Google faced challenges in gaining organic discovery for these sellers. The primary means of discovery was through advertising on Google, which only a few sellers did, leading to limited sales volume. As a result, the marketplace experiment did not meet the expected success, and Google decided to focus on its core strengths, which lie in advertising and facilitating shopping journeys

Google's recent decision to shut down the Shopping Marketplace aligns with its reworked strategy. Rather than operating as a direct competitor to retailers like Amazon, Google has chosen to act as an e-commerce enabler. By indexing numerous e-commerce websites and allowing businesses to buy advertising to appear prominently in search results, Google aims to attract shoppers to initiate their shopping journey on its platform.

Tambo's view:

Despite not being a dominant e-commerce retailer itself, Google remains one of the strongest advertising networks with a significant impact on the e-commerce landscape. Its focus on becoming the biggest advertising network for e-commerce plays a crucial role in driving sales for businesses and connecting shoppers with relevant products.

By leveraging its expertise and indexing e-commerce websites and major marketplaces like eBay and Amazon, Google effectively monetises the shopping experience without functioning as a traditional marketplace.

Google's decision to discontinue its Shopping Marketplace signifies a strategic shift towards empowering shopping journeys and emphasising its advertising capabilities. The company's collaboration with leading marketplaces like eBay and Amazon, which are also its biggest advertising customers, enables it to provide comprehensive search results and offer a seamless shopping experience.

Although Google hasn't attained significant market share as an e-commerce retailer, its influential advertising presence in the e-commerce space remains substantial. As Google continues to evolve, it maintains a critical position as a key player in the ever-changing world of online shopping.

Amir Elam, Associate Director

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