How online marketplaces are changing the way Aussies shop

What do shoppers value most online - fast delivery and free returns, better prices, or a bigger range in one place?

Retailers are betting the answer is a bigger range in one place - in the form of online marketplaces - because that's where Australians are currently doing more of their buying. But the reality is that buying from marketplaces changes what you pay, how fast your items arrive, and who fixes it when something goes wrong.

"Shoppers increasingly expect broad product choice, competitive pricing, fast delivery and reliable returns in one place," says Merline McGregor, managing director of ecommerce consultancy Pattern Australia.

"Traditional online retail models built around a single retailer's in-store stock often struggle to meet those expectations. Marketplaces are designed to offer range, convenience and trust in a way a standalone site typically cannot."

Australians are shopping through online marketplaces in growing numbers, often without even realising it.

While giants such as Amazon and eBay remain the best-known examples, many traditional retailers have also entered the race by launching their own marketplace platforms.

But according to Pattern Australia's State of Australian Ecommerce 2026 report, none of the nine major retailers using the model was recognised as a marketplace operator by even 40% of respondents.

That low recognition suggests marketplaces are now embedded across mainstream retail.

At the same time, specialist online players such as The Iconic keep carving out niches, intensifying the battle for shoppers.

Online store or online marketplace?

Part of the confusion is that, on the surface, the two can look almost identical. You land on a familiar website, browse products, check out and wait for delivery.

Behind the screen though the model can be very different.

A traditional online store sells its own stock. A marketplace hosts products from multiple third-party sellers on the same platform, even if the website itself looks like a single shopfront.

Take Big W as an example. If you buy a toaster directly from Big W, Big W is typically the seller and the business responsible for shipping, returns and refunds. But on Big W Marketplace, that same product may instead be sold by a third-party merchant using Big W's platform.

For shoppers, that distinction is not always obvious. As Money reported in its March issue, one customer who tried to return a marketplace item in-store said they were told it had to be posted back to the seller instead and was hit with more fees.

Equally however, the toaster may not have been available on Big W's website at all without the marketplace model giving access to smaller sellers.

And that is the trade-off: The benefit is broader range and greater choice. The challenge is making sure consumers understand who they are buying from and how the process may differ if something goes wrong.

Amazon's marketplace machine

If marketplaces are reshaping Australian online retail, Amazon is the clearest example of how powerful the model can become.

Australia is a unique proposition for Amazon. it's biggest competitors globally - Pinduoduo, Douyin, and Taobao - all have limited footprint in the market.

Pattern's 2026 marketplace research found the marketplace reached 60% of Australian shoppers last year, with 66% planning to buy there this year.

At the same time, eBay is losing ground, while local players have struggled to keep up following the closure of Catch and MyDeal last year.

Pattern says Kogan now risks becoming the next local casualty unless it meaningfully reinvents its proposition.

That shift says a lot about what Australian shoppers now value.

McGregor says Amazon has become the default for many - chosen for preference, reviews and repeat buys - yet on price alone, the new ultra-cheap rivals undercut it.

The share who shop at Amazon for price fell from 66% in 2024 to 38% in 2026, Pattern Australia reported.

"Shein is the standout growth story, expanding beyond fashion, strengthening perceptions of range and quality and recording strong gains in both current usage and future purchase intent," McGregor says.

"Temu remains widely used but is showing signs of saturation, with slowing growth despite rising trust metrics."

That pressure pushed Amazon to launch Amazon Haul in Australia in August 2025, with prices under $25. But many listings ship directly to customers rather than from local Amazon fulfilment centres, so delivery can stretch to two weeks.

That dynamic is reshaping local retail. Jere Calmes, chief executive of The Iconic, says the rise of global marketplaces has forced the company to accelerate investment in innovation.

"This ultimately benefits customers with faster delivery, better user experience and more choice," Calmes says. "But for companies that don't adapt, the risk is real and they are facing sustained pressure on not only price, but speed and relevance."

The Iconic's sustainable play

Rather than compete head-on with Amazon's endless aisle, The Iconic is positioning itself as a specialist platform focused on fashion and lifestyle.

"For us, an inspiring and relevant assortment is critical, but it's not enough," Calmes says.  To truly stand out as a pure-play fashion e-commerce retailer, we need to deliver beyond the fitting room for our customer."

That helps define The Iconic's place in the market. It is not trying to be the cheapest player, nor the broadest. Instead, it is combining retail and marketplace-style fulfilment models to broaden its assortment while keeping tighter control over the customer experience.

Returns, for example, are central to the shopping experience in fashion - and it's why The Iconic has made free and quick returns its main proposition since launching 14 years ago.

"Returns are undoubtedly a point of friction for customers - they've received an order, are excited to open it up, and it hasn't worked out," Calmes says.

"It's at this point we believe you can forge a connection with your customers by making returns as frictionless as possible. That's not something our international counterparts are able to do."

Calmes also points to sustainability as another dividing line.

"Whilst our competitors are launching low-priced marketplaces and continue to play the price game, we recently launched Re-Iconic, a hub for circular fashion where our customers can buy repaired, pre-loved and upcycled products."

The infrastructure behind the idea

The challenge for local brands is that Amazon Australia increasingly looks local too.

McGregor says Amazon has expanded its supply chain footprint with a new 52,000 square meter fulfilment centre in Victoria, alongside a further $490 million commitment to two more sites in Western Sydney.

Rather than trying to match Amazon, The Iconic is using a mix of fulfilment models to balance range, service and inventory risk.

That includes wholesale, where The Iconic buys and owns stock, and drop shipment, where brands list products on the platform and ship them directly. But its most important middle ground is Fulfilled by The Iconic (FBI).

Under FBI, brands still own their stock and set their prices, but the products is held in the retailer's Sydney fulfilment centre.

"We give brands access to the full scale of our capabilities, including our three-hour, same-day and next-day delivery services, plus shared-baskets which lowers per-item delivery costs compared to traditional drop shipping," says Calmes.

"We centrally manage all returns to get stock back online faster; this happens within 48 hours of the item return, including a quality check, and roughly 48% of our returned items are sold within the next seven days."

The real trade-off for shoppers

For consumers, the rise of marketplaces is not simply a warning story. These platforms are growing because they answer real shopping needs: more choice, easier comparison, and often better value in one place.

But they do not all answer those needs evenly.

Amazon offers scale but compromised on speed with Haul. Temu and Shein push hard on price, while asking shoppers to make different judgements around trust and sustainability.

Retailer marketplaces can expand choice under a familiar brand but may blur who the seller really is. Niche players such as The Iconic are doubling down on specialisation and customer experience to stand out in a crowded market.

For shoppers, the question is no longer just where to buy. It is what kind of marketplace experience they are stepping into and which trade-offs they are most willing to make.

Buy the March issue of Money for more on the big shift to online marketplaces

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