Even as e-commerce is seen as a consumer-centric industry, small entrepreneurs are its backbone. 2014 was a defining year that brought lakhs of small businessmen online. This year, the trend is likely to mature
E-commerce has changed the way business is transacted, whether in the business-to-consumer (B2C) or in the business-to-business (B2B) segment, locally or globally. The year 2014 turned out to be a year of reckoning for the e-commerce industry in India. The year saw a massive growth not only in terms of better internet penetration, increase in consumer trust level and revenues, but also investor interest with global e-commerce leaders showing interest in India’s growing e-commerce industry. To achieve this, the e-commerce industry has had to transcend physical boundaries to create a highly empowered network of related industries, entrepreneurs and people driven enterprises. This emergence of ‘we-commerce’ will be the trend to watch out for in 2015.
For the longest time, small businesses in India have struggled to expand because of geographical constraints and distribution challenges. While they manufacture great products, the struggle to build a nationwide distribution network consumes all their energy and resources and restricts them from growing. In addition, it is extremely difficult for them to ensure that their products are stocked by distributors across the country, given their limited working capital. At the same time, they cannot afford to set up a chain of stores. The result: a small business which takes most of their energy and resources; rather than focusing on their core ability to manufacture a great product based on consumer feedback.
Online marketplaces are enablers for small as well as large sellers, retailers and brands, giving them the access to an online platform where they are able to extend their reach nationally while supplying locally. The synthesis of this latent desire of small businesses to expand nationally has been key to e-commerce success. It has truly democratised the expansion of business in India, against it being the privilege of a select few who had the resources to set up a retail and distribution operation across the country.
‘Flyers Bay’, a toy product line started by two young men in Delhi, exemplifies this. Initially the young entrepreneurs posted their products (remote-controlled helicopters) on Facebook, gathering likes from everywhere where they started selling one or two products every day. The game-changer for them was logging on to Snapdeal.com and listing their products. As a consequence, Flyers Bay has grown multifold with an established presence nationally. This is the collaborative power of e-commerce. This is not a limited tier 1 phenomenon. Even tier 2 and 3 cities are benefitting from the transformative ability of e-commerce. For instance, a large number of sari wholesalers and craftsmen in Varanasi are now selling their famous Banarasi saris to national and international markets through e-commerce platforms.
Another trend that emerged in 2014 and will continue to grow is the collaboration between established offline brands and online platforms leveraging and complementing each other’s strength, and consequently establishing a symbiotic relationship. Brands across sectors have started realising the importance of e-commerce and are partnering with online marketplaces for launching products exclusively online.
Brands such as Croma, Home Town, Puma, Biba, Wills lifestyle, Jack & Jones, John Players, Satyug Gold, Micromax, Wonderchef, Godrej Nature’s Basket, which have a strong presence in the offline segment, are now present on Snapdeal.com to widen their reach to the larger customer base across different parts of the country.
The e-commerce business in India is still a nascent industry but with increasing digital connectivity and affordable mobile devices, more and more people will be buying and selling online. In 2015, m-commerce will be a key trend that will enable e-commerce becoming an even more inclusive phenomenon than it has been till now. Other trends to watch out for would be the evolving ability of e-commerce companies to undertake complex data analytics for business decisions, and enabling consumers to purchase far more categories of products than they have bought online in 2014.
While 2014 has been a great year for the early adopters amongst small businesses to come online and grow their business exponentially, in 2015, we will see this becoming the biggest trend in small business, with hundreds of thousands of merchants leveraging this to not only grow their business manifold, but to also make it far more capital effective. That is how e-commerce will truly become ‘we-commerce’.
By Rohit Bansal
The author is co-founder & COO, Snapdeal.com