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People walk past a Best Buy store in New York in 2012.

Brendan McDermid/Reuters

A dominant digital force in China, online shopping "marketplaces" are picking up speed in the United States and are now starting to take hold in Canada.

From eBay.ca to Amazon.ca and Shop.ca, these online supersites are something like cybermalls, aimed at providing retailers and other sellers in Canada with a wider customer base than they would attract on their own.

For a fee, retailers ranging from large chains to mom-and-pop shops increasingly are signing up to join the supersites, counting on gaining additional business and technological and marketing muscle power. By this fall, electronics specialist Best Buy Canada will enter the fray with its own marketplace.

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As the retailers join forces, the marketplaces are becoming unlikely gathering places for competing merchants as they battle to shave costs and reach more customers in an increasingly competitive retail landscape.

"We're figuring it out – the space creates interesting bedfellows," said James Haggarty, chief executive officer of three-year-old Shop.ca.

Merchants are searching for greater economies of scale on shared websites to take on deep-pocketed digital heavyweights and respond faster to customer demands. More retailers are betting on the joint efforts even as sellers feel the pressure to stand out in a crowded field.

"We want as much exposure for our products as possible," explained Deepak Jain, managing director of retailer ShopTronics in Niagara Falls, Ont., which sells its Electrohome and other electronics products on its own site and Amazon.ca's marketplace.

He pays Amazon.ca a monthly $29.99 fee, plus a roughly 8-per-cent to 15-per-cent slice of his sales and a variable "fulfilment" charge for Amazon's distribution work, depending on the merchandise load.

(EBay.ca's standard seller's fee is 10 per cent of the sold item's price and shipping, plus monthly charges from $15.95 to $179.95 (depending on the business's size), with top-rated sellers receiving a 20-per-cent discount, officials said. Shop.ca's fees are similar to those of Amazon.ca's – between 6 per cent and 25 per cent of a seller's sales – but Shop.ca has no added charges, Mr. Haggarty said.)

Amazon.ca's service is efficient and the exposure, on both sides of the border, is "priceless," Mr. Jain added. ShopTronics' marketplace sales soared 250 per cent in 2013 and close to 100 per cent the following year, he said.

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Even so, online marketplaces are underdeveloped in this country compared with some others, said a Forrester Research e-commerce report last month for the Retail Council of Canada.

"Creating official storefronts in online marketplaces is an effective way e-business professionals, especially from small and medium firms, can tap new pockets of customers they would not have access to through a direct-to-consumer website," the report said.

Its survey found 38 per cent of retailer respondents in Canada used online marketplaces.

Key online marketplaces in North America (Amazon and eBay), Japan (Rakuten), Latin America (MercadoLibre) and China (Alibaba-owned Tmall) are each among the top two e-commerce sites in their respective markets, the report said. In China, about 90 per cent of e-commerce sales take place on a marketplace, according to Shop.ca's research.

In Canada, marketplace sales are growing but probably make up less than 5 per cent of online sales, Mr. Haggarty estimated. "We're catching up."

Shop.ca's sales surged 90 per cent in 2014 and are expected to double this year, he said. At Amazon.ca's marketplace, sales jumped more than 70 per cent in the first five months of 2015, while the number of sellers increased 30 per cent in that period from a year earlier, said Peter Faricy, vice-president of Amazon Marketplace in Seattle.

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Amazon.ca has put a push on its marketplace, whose business was spurred by its introduction of Amazon Prime, an annual membership that provides free two-day shipping, and its rollout of distribution fulfilment for sellers, he said.

Sellers on parent Amazon.com Inc's. worldwide marketplace make up 44 per cent of its total units sold, up from 26 per cent in 2007, he said. "The success that sellers have in Canada is very similar to the success sellers are having around the world."

EBay.ca, a marketplace pioneer, has been signing up more merchants, especially since it launched its limited-time deals program two years ago, said managing director Andrea Stairs. Some companies, including Dyson vacuum cleaners, use eBay as a discount outlet store.

And marketplaces such as eBay.ca are attracting a growing number of larger retailers, such as Toys "R" Us and home-improvement chain Lowe's Canada.

But some retailers are still trying to learn more about the supersite concept. Lowe's, which has its own e-commerce site, has been testing the eBay.ca marketplace since last fall, said president Sylvain Prud'homme.

EBay.ca is "an interesting channel to acquire new customers that may not shop at Lowe's today," he said. "We are trying to understand the customer behaviour within the marketplace and how it relates to the growth of our business."

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And while online marketplaces often appeal to consumers looking for deals, Shop.ca is trying to differentiate itself by shifting to more upscale offerings, Mr. Haggarty said. It recently added premium fashion brands such as Michael Kors and Kate Spade. High-end retailer Sporting Life, an early e-commerce player on its own site, joined Shop.ca last fall.

Still, some suppliers aren't pleased with marketplaces, viewing them as discount channels that can undermine their brands' image, said David Russell, co-owner of Sporting Life. The retailer has even dropped some lines from Shop.ca after the suppliers asked to be excluded (he didn't name them). But he said Sporting Life sets its own prices and is happy with how Shop.ca works.

Now Shop.ca is moving to sell groceries, wine and beer online, Mr. Haggarty said. Teaming up with a supply-chain firm, the supersite will test a neighbourhood marketplace this fall in affluent North Toronto. It will pilot customer membership fees for deliveries within 24 hours of goods and services from participating retailers, including grocers, butchers, bakers, pharmacies, pet stores, florists and dry cleaners, he said.

"We don't need to beat Amazon or eBay," he said. "We just need to earn the customer's trust."

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