Home Virto Commerce blog Exploring Service Marketplaces: Trends, Types & Top Platforms

Exploring Service Marketplaces: Trends, Types & Top Platforms

Apr 26, 2024 • 20 min

Online marketplaces are booming and becoming a critical growth driver for ecommerce sales worldwide. According to OC&C Strategy Consultantsi1, by 2025, they will be the dominant online distribution channel in retail, travel, and food delivery, as well as several emerging categories such as personal finance, insurance, and utilities. Much of this growth is attributed to service marketplaces, which gained significant traction during the pandemic, allowing individuals and businesses to offer and buy professional services.

In this guide, we’d like to take a deep look at this category of online marketplaces, explore their many facets and business models, as well as popular platforms for service marketplace management and their capabilities. We’ll also share our own view on what goes into a successful service marketplace platform, since we’ve built lots of online marketplaces over the years.

Our research will be useful both to companies just entering the ecommerce market and exploring this type of business, as well as to mature players looking to integrate a service marketplace into their existing digital commerce ecosystem and searching for a marketplace management software provider.

What is a Service Marketplace?

Before we define what a service marketplace is, let's land on the definition of the word “service” that we’ll be using throughout this review.

Merriam-Webster defines service as "useful work that does not produce a tangible good." In other words, it's an intangible offering provided by one party to another and often involves a specific skill or expertise. A party, in this case, can be either an individual, a business, or a government. Unlike products, services are not physical objects and cannot be owned or stored. They include activities like teaching, design, maintenance, or consulting, where the value comes from the execution or delivery of the service itself.

A marketplace for services is, therefore, a platform for buying and selling services. These can range from personal services like dog walking and home repairs to professional services like industrial design and investment consulting. Uber, Upwork, and Airbnb are all examples of service marketplaces, whether they position themselves as such or not.

How a service marketplace works

How a service marketplace works

In a service marketplace, the key parties include service providers, who offer their skills or services; service seekers or consumers, who look for and purchase these services; and the platform owner or operator, who manages the marketplace, facilitating transactions and interactions between providers and seekers.

Types of Online Services Marketplaces

While the distinction between different service marketplaces is not always clear, as some of them support interactions between different parties, in this section we have attempted to divide them all into five categories:

  • C2C (Consumer-to-Consumer) marketplaces: platforms that connect individuals offering and seeking everyday tasks and services.
  • C2B (Consumer-to-Business): platforms where individuals offer professional services to businesses.
  • B2C (Business-to-Consumer) marketplaces: platforms where professional providers offer their services to individual consumers.
  • B2B (Business-to-Business) marketplaces: platforms that facilitate the exchange of professional services between businesses.
  • B2E (Business-to-Employee) marketplaces: platforms that allow companies to provide various services to their employees.

Some service marketplaces fall into more than one category because they support the exchange of services between all of these groups. For the purposes of this report, we'll call them "hybrid marketplaces.”

In addition, service marketplaces can also be classified by industry, which serves specific consumer or business needs and requires different skills from service providers, for instance:

  • home services (cleaning, repairs)
  • professional services (legal, marketing)
  • creative services (design, writing)
  • tech and IT services (software development, cybersecurity)
  • health and wellness (personal training, therapy)
  • education services (tutoring, online courses)
  • and others.

Let's take a closer look at some of these categories and the platforms that fall within them below.

C2C service marketplaces

C2C service marketplaces are websites where individual consumers can find and hire other individuals for various services. They include everything from home maintenance to pet sitting to personal wellness services. You probably use some of them regularly: TaskRabbit, Rover, Etsy, and others. Some of them operate globally, and some operate as local services marketplace.

A few C2C platforms were among the top 10 marketplaces in 2020, accounting for nearly $15 trillion (40%) of global consumer spending. One of them is Airbnb, which is now one of the fastest growing C2C service marketplaces in the world.

Below we have collected some examples of popular C2C service marketplaces, the services they offer, and their growth over the years.

C2B service marketplaces

Unlike C2C service marketplaces, the main customers of C2B service marketplaces are not individual consumers but businesses. One example of such platforms is the freelance service marketplace which businesses use to find and hire freelance workers and specialists for their projects, such as Upwork, TopTal, Fiverr and others.

Freelance services marketplaces are a fast-growing market that is expected to reach $14.17 billion by 2029. The main drivers are the growing need for a flexible workforce (ability to quickly scale teams up or down based on project needs), cost efficiency, and easier access to a global talent pool with specialized skills.

Check examples of some of the most popular C2B service marketplaces down below.

It's important to note that some of the service marketplaces that started as C2C or C2B have evolved into hybrid platforms where both businesses and consumers can act as service providers and buyers. For example, Airbnb started as a C2C platform where individuals could rent apartments and later allowed businesses (e.g. real estate agencies) to rent apartments to individuals and book apartments for their employees from individuals. The same thing happened with Upwork and Fiverr.

B2C online services marketplace

B2C service marketplaces are platforms where the primary service providers are businesses, not individuals. In some cases, those platforms overlap with C2C platforms, because it’s not always clear who stands behind the service a traditional business (a company with employees) or an individual contractor.

However, we've found examples of such platforms to illustrate the types of services these marketplaces operate in. One example is Thumbtack, a home services site that allows users to search for and hire local services marketplace providers for projects ranging from home remodeling to cooking lessons.

Other examples include Chewy.com, where pet owners can connect with teams of licensed veterinarians, and Askned.com.au, an Australian B2C marketplace for people with disabilities, where they can shop for services such as wheelchair repair and maintenance.

B2B service marketplace

Finally, the last category on our list is B2B service marketplaces, which connect companies that need specific services with those that provide them. In this setup, the service providers are businesses that offer professional services such as IT support, marketing, legal advice, industrial design, or machine maintenance.

Some of these services can be found on freelance service marketplaces that cover a wide range of skills and expertise, such as programming or copywriting, while others are offered through niche marketplaces that focus on a specific skill or industry.

Here are a few examples of these niche B2B service marketplaces based on the industry in which they work and the type of services they specialize in.

B2B marketplaces grouped by industries

 B2B marketplaces grouped by industries

It's important to note that each marketplace can support different levels of service complexity. Some services, such as basic web design, can be standardized and project-based, while others can be more customized and ongoing, tailored to specific needs.

At Virto, we know first-hand the ins and outs of creating robust yet adaptable B2B online marketplaces. If you're considering launching a professional services marketplace or adding such functionality to an existing eCommerce platform, learn why global eCommerce leaders choose Virto Marketplace as their go-to marketplace solution.

Key Service Marketplace Trends

Today, online services marketplaces are seen as the next big thing in the marketplace industry and consumer services economy, shaken up by the growing need to digitize services after the pandemic. According to OC&C Strategy Consultants, service marketplaces such as Airbnb, Uber Eats, and Booking.com are already among the top 10 players, accounting for 70% of marketplace gross merchandise value worldwide. And more service categories will follow. For instance, freelance marketplaces such as Fiverr, Upwork, and Freelancer are among the fastest-growing service marketplaces in their category.

One notable trend is the growth of regulated and vertical service marketplaces. According to Andrew Chen, partner at Andreessen Horowitz, service marketplaces are going through their fourth incarnation. From the listings and "Uber for X" era of simple service marketplaces to managed and higher-priced platforms, they are now moving into their next era of regulated services with platforms.

Key Service Marketplace Trends

This new wave has the potential to unlock 125 million service jobs in the US only and bring the most complex service categories online, including accounting, teaching, engineering, law, and other services, where suppliers need a license or a certificate from a government or professional organization to provide their services.

As a result, we'll see the continued growth of niche service marketplaces that focus on providing targeted services that address specific industry needs. This approach offers individuals and businesses access to in-depth and relevant expertise and a higher quality of service, allowing these marketplaces to carve out a distinctive niche in a crowded ecosystem.

While many of the service marketplaces we know and use today are platforms where companies offer services directly to consumers, a growing number of B2B service marketplaces facilitate the procurement of professional services between businesses.

In addition, some companies integrate service marketplaces internally for their employees, suppliers, or partners. For example, some companies are creating their own freelance service platforms to retain and attract top talent, while others are creating new revenue streams by launching freelance marketplaces where new and existing customers can hire company employees for consulting services.

Industrial companies are also integrating service marketplaces into their transactional platforms. These marketplaces allow them to enhance their core product offerings and foster stronger relationships by addressing a broader range of customer needs. This approach diversifies revenue streams and establishes the organization as a comprehensive solutions provider, deepening customer engagement and loyalty through a more holistic service experience.

Next-generation service marketplaces

As we move into the era of industry-regulated and niche service marketplaces, we'll see the rise of so-called “next-generation service marketplaces” that will have to adapt to the new regulatory requirements and customer expectations.

While there is no clear vision on where those platforms will evolve from a technological standpoint, there are a few technology trends that could shape those platforms in the near future.

Artificial Intelligence (AI)

While "AI" has become a buzzword, its application in service marketplaces holds significant potential. AI can revolutionize service marketplaces by enhancing the user experience through personalized recommendations, improving service matching, automating customer service and many other options.

For instance, Xometry, an industrial service marketplace, has created an AI-driven RFQ (request for quotation) platform that gives buyers instant prices and the ability to procure without lengthy negotiations. Fuzzy, an in-home veterinary service, uses AI and vet technicians to augment the productivity of licensed veterinarians.

Advanced Security and Verification

The trend toward service-regulated marketplaces will also push marketplace platforms to adopt higher standards for data security and user verification. Platforms will require robust mechanisms to verify licenses and certifications, such as integration with official databases or the use of blockchain for secure, verifiable records, as regulated services require providers to hold a license or certification from a government agency or a professional organization.

In addition, such platforms will handle sensitive professional data and require more robust security protocols for data storage and transactions. These include encryption, secure data access protocols, and other measures to ensure data integrity and privacy.

Internet of Things (IoT)

IoT is another technology that could disrupt B2B and B2C service marketplaces. For example, through IoT, industrial machinery can autonomously monitor its condition, notify managers of its status, and automatically create a service request that managers can post on a digital marketplace to request certified maintenance services.

Similarly, a consumer device such as an air conditioner could assess its performance, detect problems, and automatically suggest service providers to the homeowner through a marketplace. This could automate maintenance, improve efficiency, and save costs through timely service.

How to Choose a Services Marketplace Platform

In our experience, there are two main strategies when it comes to selecting a marketplace platform for services or goods.

In the first strategy, companies look at digital commerce platforms as a set of out-of-the-box features that they prioritize during the selection process. They don't think about how well the platform will adapt to ever-increasing customer expectations, and whether they can tweak and adapt it later. As a result, they end up with a rigid solution that cannot meet all of their needs in the long run and move to another platform.

At Virto, we advocate focusing on platform adaptability first, rather than just features. Our approach ensures that while immediate functionality needs are addressed, the architecture of the platform remains flexible for rapid refinement and the addition of new features, keeping the cost of innovation stable. This adaptability is critical for companies operating in the service marketplace space, where market dynamics are fluid and the ability to pivot or expand functionality can provide a competitive advantage.

The market for online service marketplaces is still evolving, making it difficult to predict what kind of functional capabilities you, as a platform operator, will need to satisfy your customers and differentiate yourself from other marketplaces. Some of these capabilities may not even exist yet. That's why choosing a well-architected platform that can adapt to and support ongoing refinement and development is essential to staying competitive and effectively meeting user needs.

Key features and functional capabilities of a services marketplace platform

Only after you verify that the platform can adapt to future innovations can you discuss the future functionality of your service marketplace. While we can't list them all in this review, as marketplace services can vary widely, we will mention some functional areas that are specific to service marketplaces, as well as components that are common to all online marketplaces.

As mentioned above, the service marketplace has three main parties: the service buyer, the service provider, and the marketplace operator. So, when you think about the features of your future service marketplace, you should consider the features for each user category. 

Let’s look at the core marketplace components for each category.


Tools for Marketplace Operator

  • Admin dashboard
  • User management
  • Financial management
  • Dispute resolution
  • Marketing
  • Analytics


These tools allow the marketplace operator to orchestrate the smooth operation of their marketplace. They include approval and onboarding of new service providers, curation of service listings and orders, management of service marketplace commissions, customer service for both buyers and service providers, marketing tools, and more.

For example, provider onboarding is essential to ensure that only qualified and reliable service providers can offer their services, thereby maintaining the quality and trustworthiness of the marketplace. This process is especially important if the marketplace services require professional certification or licensing of service providers. It may include the following steps: registration, verification, training, and approval.

In some cases, the operator can also handle service negotiations between the buyer and the service seller or provide the necessary features to ensure transparent and timely communication and dispute resolution.


Tools for Service Providers

  • Profile management
  • Offer management
  • Order management
  • Calendar and scheduling
  • Payment processing
  • Customer communication


Depending on the mechanics of the marketplace, a service provider can either respond to the buyer's request with a pre-defined quote or customize its proposal based on the specific needs and criteria outlined by the buyer. They can also be hired directly, allowing for a more streamlined and immediate initiation of services without the need for bidding or extensive negotiation. To do all of this, a service provider needs an order management system to manage the orders it receives from the marketplace, as well as a scheduling system.

Service providers also need to be able to present themselves on a provider page and manage their service marketplace offerings, including examples of previous work, certifications, pricing, and testimonials.

Depending on the nature of the services and the agreement between the parties, the service provider pricing functionality should support different pricing models, such as hourly, per project, retainer fees, and others.


Tools for Service Buyers

  • Search and filter
  • Booking system
  • Service request placement
  • Reviews and rating
  • Payment options


Service marketplace tools for buyers are typically similar to those available in an eCommerce platform, such as a catalog of services or service providers, search, payment, recommendations that allow the buyer to search and find the right service provider for their request.

However, some marketplaces may provide a service request functionality that allows service providers to actively bid or tailor their services to the specific needs of the buyer, creating a more competitive and customized service procurement process.

In addition, one of the key features of service marketplaces is a rating or feedback system that allows buyers to leave reviews of service providers, which can then be translated into provider ratings or scores that other buyers can rely on when selecting a service provider.

Apart from functional areas, it’s also important to consider such software capabilities as:

  • Extensibility – which refers to the marketplace’s ability to be expanded or enhanced with new capabilities without significant changes to the underlying architecture.
  • Integration capabilities – pertains to how well the platform can connect and operate with other systems or applications.
  • Multilingual and multiregional support – involves the software’s ability to support multiple languages and adapt to regional variations.


Now, let’s look at some vendors of online services marketplace management platforms and their capabilities.

Platforms for launching an online services marketplace

1. Virto Commerce

Virto Commerce is a versatile open-source eCommerce platform designed for creating complex B2B, B2C, and marketplace solutions. Its modular architecture and Atomic © design allow for extensive customization, making it ideal for medium to large businesses across various industries. The platform's capability to integrate seamlessly into existing systems offers flexibility for organizations aiming to launch or expand their digital marketplace presence.

2. Mirakl

Mirakl offers a SaaS platform that retailers, manufacturers and wholesalers to launch and scale their own marketplaces and dropship businesses. It stands out for its comprehensive marketplace ecosystem for B2B businesses and offers features like vendor management and automated catalog integration.

3. OroCommerce

OroCommerce provides a flexible, open-source eCommerce platform specifically designed for B2B companies. Its OroMarketplace platform features diverse B2B features out of the box, translating into fewer customizations and a smaller total cost of ownership.

4. Shopify

Shopify is a widely used SaaS-based eCommerce platform that enables businesses of all sizes to build online stores. Shopify's Marketplace Kit allows store owners to use Shopify's commerce features and connects their platforms to millions of merchants and their products. It also includes some marketplace modules created by third-party developers for the Shopify App Store.

5. Magento (Adobe Commerce)

Magento (now Adobe Commerce) offers an open-source eCommerce platform that supports all types of merchants with its scalable design and rich features. It's ideal for businesses that want customization and control over the look, feel, and functionality of their online store.

Let's take a closer look at how these software platforms stack up against each other.

Other marketplace options include WooCommerce, BigCommerce, Salesforce Commerce Cloud, CS-Cart, and Webflow.

We'd like to reiterate that when looking for a service marketplace management platform, it's easy to get caught up in the functionality that these platforms can offer. However, given the lack of established practices and standards in the service marketplaces, it's essential that your platform can support continuous innovation to improve the customer experience if you want to stay ahead of the competition in this market.

According to Forrester's latest report, as providers have adapted to the proliferation of platforms since the pandemic began, marketplaces now have to compete not only for buyers but also for sellers. The experience of both buyers and sellers of services is critical, so platforms must continually evolve to attract and maintain their presence. Dominance in this market will depend on constantly innovating and improving interactions across all user experiences.

If your strategy focuses on innovation, customer experience, and technological leadership, Virto Commerce's Marketplace can be an optimal solution for creating service marketplaces. It stands out for its comprehensive features and adaptable architecture, positioning it as a leader in facilitating innovative and customer-centric marketplace solutions. For more details, visit Virto Commerce's Marketplace Solutions.

Final Thoughts

Online service marketplaces are becoming one of the drivers of the eCommerce market and a rapidly growing business model. Driven by the pandemic and the push toward digital service offerings, these platforms are attracting entrepreneurs for their potential to innovate and grow in a changing economy. The trend toward vertical and more service-oriented marketplaces is evidence of this. At the same time, established eCommerce companies are launching service marketplaces as part of their existing technology stack to expand their offerings, improve the customer experience, and create new revenue streams.

Building a professional services marketplace can be a complex process that requires careful planning and implementation. If you're looking for a robust solution with an adaptable architecture, support for B2C and B2B marketplace models, and an innovative and customer-centric approach, check out Virto Commerce's Marketplace Platform. Powered by Virto Atomic Architecture™, it's the only extensible marketplace solution that can connect to any eCommerce platform at a predictable time and price.

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