“Marketplaces: a cornerstone of the circular economy”
The circular economy, second-hand markets: in this article, we provide an overview of this alternative and environmentally friendly consumer trend. As more and more people take an interest, companies are transforming their business models to meet this growing demand.
The B2B sector has lots to do when it comes to its manufacturing and marketing practices. Professionals can make the most of enormous and exciting opportunities that are entirely in tune with today’s focus on CSR.
In France, the Anti-Waste Act for a Circular Economy, which became law in 2020, encourages companies to change their bad habits. For example, it has prohibited the destruction of unsold non-food items since January 1, 2022 and generally urges businesses to think more before throwing items away.
A brief reminder: the circular economy is an innovative economic model that puts an end to the endless cycle of producing, consuming and throwing things away. Possible solutions include recycling, repairing and reusing.
Individuals are leading the way
More and more people in France are buying second-hand products. One in three people already buys or sells on the second-hand website Le Bon Coin. Websites such as Vinted and BackMarket have experienced incredibly fast growth. It must be said that the boom in second-hand sales between individuals has been largely prompted by financial concerns, rather than by a focus on environmental issues. The latest Cetelem Observatory on the circular economy confirms that consumers’ primary objective is to save money. 7 out of 10 Europeans bought a second-hand product in 2021. 24% of them sell products every month, with 18–34-year-olds being the most active: this generation has never known a world without the Internet.
The huge potential of B2B
These transactions between individuals are the most highly visible but the second-hand market extends much further. Today, professionals are embracing the concept.
For example, La Redoute has opted to retain control of the resale of its products by opening La Reboucle, a marketplace for sales between individuals.
Other companies are launching circular economy marketplaces for professionals: manufacturers and distributors put second-hand products on sale, from spare parts that cannot be used internally to materials that would previously have been thrown away but that can now be used by a third-party company. Given that construction is one of the most polluting industries, BatiPhoenix and Backacia have taken this approach.
The Suez group, one of our clients, has taken advantage of this opportunity as well: its Organix marketplace connects organic waste producers with buyers who will process this waste. Moreover, it’s the only trusted third party to offer a delivery service for this waste.
Other companies are focusing on inventory rotation. This approach inspired Engie’s BeeWee marketplace: it provides opportunities to pool “dormant” spare parts within the group. The result? Existing parts can be used, thereby preventing the manufacture of new parts. It’s a win-win.
Plenty of (secondary) benefits
We couldn’t resist the pun! The marketplace is an essential tool for anyone starting out in the circular economy. It plays a vital role, acting as an intermediary to ensure the circular nature of the aptly named circular economy. It provides a wide range of benefits, many of which are felt instantly.
The most obvious advantage is a reduction in the cost of disposal, storage and production, as we have earlier in this article. It creates unexpected added value by enabling the trade of items that weren’t initially designed to be sold.
It has other advantages too: it plays a significant role in brand image, helping companies stand out. Companies with marketplaces remain one step ahead of any future regulations, but that’s not all: circular economy marketplaces often prove to be unifying business projects, increasing a company’s social value.
For all these reasons, these initiatives are becoming increasingly common. The marketplace’s impact can be felt in every sector of the economy: from charities (Label Emmaüs) to the automotive industry (Reparcar), not forgetting fashion (place2swap), cosmetics, agri-food and household appliances.
Alstom, another of our clients, has opened StationOne, a specialist marketplace for the railway sector. The company now connects railway operators with international suppliers of wheels, bearings, motors, suspensions, cables, screws, cameras, personal protective equipment and more. What’s even better is that it also offers installation, repair, maintenance and training!
What makes the marketplace model so successful? It enables companies to expand their offering over time, as we’ve seen in traditional distribution channels. This is sure to revolutionize the circular economy! Flexible and experimental, marketplaces ensure that B2B players aren’t trapped in a rigid system. The format gives them the opportunity to reinvent their business model by providing a “greener” offering and experimenting without having to take significant risks. Marketplaces provide additional revenues and demonstrate real progress in terms of CSR: the effects are purely positive.