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“A rising tide lifts all boats”: Victoria’s online marketplace startups generating $1.6b in profit
Ben Chan, CCO of online marketplace startup Envato
Thu 25 January 2018 - 12:11 pmFeatured | Noticeboard | Startup
Victoria’s online marketplace startups have created jobs for 93,000 people and contribute $1.6 billion to the state economy, according to new report from EY-Parthenon and startup ecosystem development agency LaunchVic.
The report, A Review of Melbourne’s Digital Marketplaces, shows the sector is growing at 11% per year, well above Victoria’s current industry growth rate of 3%, with more than 190 online marketplace startups currently located across the state.
These startups are directly contributing $630 million to Victoria’s gross state product (GSP) while sellers on their platforms are contributing a further $950 million. Meanwhile, 13,000 people are employed by Victoria’s online marketplace startups and a further 80,000 have jobs as a result of sales generated through online marketplaces.
LaunchVic CEO Dr Kate Cornick described the report as a “strong endorsement” of the entrepreneurial spirit and ability within Victoria’s online marketplace startups, noting they boast an ‘attractive’ business model with low up-front costs, and no need to own products or hold a physical inventory.
“Victoria has an impressive track record when it comes to digital marketplaces with home-grown unicorns SEEK, REA Group and Car Sales founded in Victoria along with a new generation of marketplaces such as Redbubble, 99designs and Sidekicker,” she said.
“Whether it is connecting businesses with an on-demand workforce, ensuring surplus food doesn’t go to waste, or helping artists monetise their designs on clothing and homewares, online marketplaces are also helping people save time and money, contributing an estimated $135 million in savings.
“One such marketplace, founded in Victoria and rapidly gaining global market share, is Envato, which sells creative assets for web designers, developers and other entrepreneurs. With over 8 million community members worldwide, customers in 197 countries and 40 million purchases to date, Envato employees more than 300 people around the world, 200 of which are based in Melbourne.”
Commenting on the report’s findings, Ben Chan, Chief Commercial Officer of Envato said it was an “exciting time” to be an online marletplace startup operating in Victoria.
“The saying ‘a rising tide lifts all boats’ is particularly applicable, as we’ve seen the local sector go from strength to strength as companies achieve success,” he said.
“We’re pleased, if a little humbled, that we’ve been able to play a positive role with this. Being located in Victoria has big benefits, we’re part of a thriving and dynamic tech sector, one that is collaborative and growing quickly. And having our HQ in Melbourne has advantages too, especially when it comes to attracting and retaining top tech talent from around the world.”