If GMV were GDP, that would make the Amazon marketplace the 42nd-largest economy globally, just behind Bangladesh but ahead of South Africa. It isn’t only the sales volume that makes marketplaces comparable to economies, however.
The number of people served as consumers, businesses reaching those consumers, jobs created, and vendors supporting them makes marketplaces behave like economies. The textbook definition of an economy also matches marketplaces.
In 2020, sellers on the Amazon marketplace sold $300 billion worth of goods. Per the International Monetary Fund estimates, South Africa’s GDP in 2020 was $282 billion. The marketplace was as large as the 50th largest economy in 2019.
In that context, businesses that depend on a single marketplace are less surprising. For example, Amazon marketplace sales are greater than most countries’ total e-commerce sales. To rely on Amazon is as asset-specific as to depend on a single market. That is, of course, a bizarre contrast, but if marketplaces are economies, it asks for that comparison.
Vendors built to enable behaviors on the marketplace are what elevates some of them to economies. Both Amazon and eBay ecosystems, for example, have tens of thousands of software companies and agencies that help businesses. They act as the supporting layer that in turn accelerates the marketplace’s growth.
The drawback of marketplaces as large as economies is that a single company opaquely rules them. It gets to set the rules, fees and prevent destructive behavior without any input from anyone else. The Oversight Board was created to overturn Facebook decisions regarding what to take down, what to leave up, and why. Even though judgments by marketplaces impact businesses more severely, they lack similar external oversight.
Alibaba is the largest marketplace economy in the world. Jack Ma, CEO of Alibaba, referred to it as a “retail economy” as far back as 2017. There are also likely more businesses that think of selling in China as selling through Alibaba’s Tmall.