Success Mantras of Top 5 E-commerce Marketplaces in India
A trip to the mall is often marred by traffic jams and potholes for Indians on the fast lane. And then, they turn to online shops to purchase their wares. No wonder, e-commerce start-ups in the country are having a field day, today.
But that wasn’t the case earlier. Most e-commerce firms that started operations in the country at the turn of the century are nowhere to be seen now. A host of issues such as low internet penetration, lack of payment mechanisms and last-mile connectivity throttled them.
It is clear that not all the e-commerce start-ups in the country succeed. The ones that do, do so by coming up with ingenious solutions to the many problems that plague the sector. It is important that we learn from the experience of those who make the grade. And so, we take a look at the success mantras of the top e-commerce players here.
Amazon – The local marketplace
Imagine ordering a product online and getting it delivered at your home within a matter of hours. That is what Amazon, the global e-commerce major, does in some of the major cities in the country, through its same day delivery service.
That is not all. The firm which operates as a marketplace has made it very easy for entrepreneurs to start selling their wares through it – irrespective of their size or location. It has set up 12 fulfilment centres across the country where merchants can store their products. The products could then be shipped to customers quickly using Amazon’s Easy Ship service.
Amazon thus made life very easy for the vendors. Consequently, more vendors made it to its site and more products were put on sale, which in turn attracted more customers. Is it a wonder that the company is one of the leaders in the Indian e-commerce market today?
Flipkart- Customer first
Amazon might have made its money bringing sellers and buyers closer, but the home-grown e-commerce giant Flipkart did so by moving closer to the customer. At a time when its predecessors put off customers with their poor levels of service, Flipkart won them over by making customer service the reason for its existence. It took e-commerce to the doorsteps of those without credit cards, and those with credit cards who treated it with scepticism by launching the cash on delivery service. Customers were also pampered with huge discounts, free delivery and no-questions-asked returns. Flipkart also backed it up through an aggressive ad campaign. Of late it has been conducting sales festivals by the name “Big Billion Days” where customers are offered deep discounts. In short it made an offer that couldn’t be refused and its sales have been growing by leaps and bounds in no time.
Flipkart operates 16 warehouses in the country, to serve its customers. On getting an order its software evaluates various factors to decide on the warehouse from which the product will be shipped, so that the order is fulfilled on time at the least cost.
Flipkart needed huge funds to power its growth, and that could only come from abroad. But regulations didn’t permit companies with foreign investment to sell products to individual customers directly in India. Flipkart came up with an ingenious solution to the problem. It spun off its retail and warehouse arm into a separate Indian company – WS Retail – which buys products from Flipkart and then sells it through Flipkart, as an independent seller. The move helped Flipkart access funds and still sell products in India.
Paytm.com – Simplifying payments
Unlike Flipkart that played on the lack of adoption of a service – credit cards – in India, Paytm based its success on something that was readily adopted by people here – mobiles. It made its fortune by placing itself at the intersection of payments, e-commerce and the mobile revolution.
Paytm started off as a website that allowed customers to recharge prepaid mobiles easily. The simplicity of the process – one could register and recharge their mobiles in a matter of seconds and cash back offers attracted customers to the site in huge numbers. Later, as smart phones became ubiquitous, Paytm transformed itself into a mobile wallet. It built partnerships with vendors such as Uber to expand its customer base. Customers could now do a host of things such as paying bills or booking tickets from anywhere using their mobile phones. And they simply did it.
Jabong.com – Style and substance
The fashion and lifestyle e-commerce portal – Jabong.com – is another e-commerce venture that rode the wave of smart phone adoption in India. Its mobile application provided a unique shopping experience that made up for the lack of branded lifestyle showrooms in the country’s hinterland. And so, Jabong today gets 62 per cent of its orders from tier 2 and tier 3 cities. The lifestyle e-tailer that sells apparel, footwear, jewellery, and accessories, also serves its customers in style delivering orders on the same day in Delhi/NCR and within 48 hours in top 10 cities.
Snapdeal.com – The dealmaker
Everyone loves a good deal. Snapdeal made its way to the hearts of Indian customers, by providing them just that. The e-commerce firm partnered local vendors in cities throughout the country to provide deals over a wide variety of products almost every day. It also allowed local vendors and manufacturers to publish their product catalogue and sell it on the Snapdeal portal. This approach helped them avoid inventory and the costs involved with it. The firm has since moved into product retailing and is moving towards a pure marketplace model.
The common ground
All these firms have a unique set of strengths. But all of them have one thing in common; they have built their business of a strong foundation – a robust e-commerce platform that is scalable and flexible enough to allow them to add more features to meet the changing demands. They have marketed their portal using multiple channels, and have used it to provide an unmatched experience to their customers, by harnessing integrated analytics data. The platform also allows them to undertake frequent promotions and update the catalogue based on the changing seasons. It also enables the companies to support their customers effectively.
A bright future
With better connectivity and affordability, the number of Internet users in India is increasing by the day. Google expects 10 crore Indians to buy online by 2016, up from the figure of just eighty lakhs in 2012. But that too is a small fraction of India’s population and hence there is much room for growth in future.
E-commerce too is expected to grow at an explosive rate in the country as more people and more categories of products go online. The e-commerce market that was valued at just $3 billion in 2014 is expected to shoot up to $15 billion by 2016. This growth offers tremendous opportunities for players – both existing and new – in the sector. In short, future of e-commerce in India, is indeed, bright and there couldn’t be a better time for people wanting to enter the sector.