A lot has been talked about the giants like Amazon, Flipkart, and Snapdeal in Indian e-commerce sector, and they are often seen as the building blocks of e-commerce due to their scale and impact. A lot of insights have been drawn on how developments in these companies might shape the whole e-commerce sector . But amidst all the tussle and war prevailing between these majors, smaller e-commerce entities are striving to make a safe place of their own in the market.
With the advent of the start-up culture in Indian Economy, many e-commerce companies are also budding. Also, the existing brick and mortar businesses are expanding into the online space to increase sales and optimize resources. Some of the e-commerce driven start-ups are Jabong, Myntra, Yatra, Ola (ANI Technologies Pvt. Ltd.), Exotel etc. The favorable economic conditions, fair trade policies and FDI, efficient human resource & visionaries, are a few reasons for the boom in e-commerce based businesses.
Today e-commerce has spread across various categories and sectors, and each of these sectors is giving rise to a market leader in their industries, which are all important building blocks of e-commerce. When talking about groceries and household supplies, companies like Tradus, Grofers and Big Basket are leading the way. Companies like Urban ladder, Pepperfry and Fabfurnish are leading the industry in providing furniture online. When it comes to baby products, catering to just a niche set of target group, Firstcry is the market leader followed by a newer entrant Hopscotch and Mahindra acquired BabyOye. This category experienced a boom in the number of players about 5 years ago but they could not sustain the competitive marketplace leaving room for just a few. Apart from this, there are many other categories such as Lifestyle and Jewellery with many small players doing considerably good in the market.
Funding – The fuel for an e-commerce set up
Funding is also an important aspect for the smaller e-commerce players to sustain and grow. Funds are required to build an infrastructure for the logistics management and to develop an overall business model for smoothly executing business operations. Apart from this, funds are required to build a brand and communicate the brand identity to consumers. Creating a distinct brand is an important aspect for an e-commerce company to stand out and position itself to grab a considerable market share. Also, to sustain the competition, the pricing is competitive and a lot of promotions and offers are rolled out. This leads to reduced margin and hence funding is crucial for fueling the company’s functioning.
Going Niche is the key
The building blocks of e-commerce such as user-friendly websites, secure payment gateways, reliable delivery systems, and efficient customer service have become crucial for the success of online businesses. The recent efforts of digitization of the country have led to an increase in the investments in digital areas of business and hence the base is set for the birth and growth of e-commerce companies. The retail market is going Niche! Many smaller companies in this sector are targeting niche markets to make a place of their own in the huge pool of e-commerce. Businesses by now have realized the importance of serving to a small target audience with just a singular idea executed exceptionally well. This is rooting out the old culture of providing everything possible to every customer possible. Also, following a personalized service offering model is also important to stand out against the giants like Flipkart and Amazon who have any product a customer might think of. Omnichannel and multichannel retailing is also becoming increasingly popular as a way to provide customers with seamless experiences across multiple channels. To read more about the difference between omnichannel and multichannel retailing, check out this blog : What does Omnichannel and Multichannel Retailing mean in 2019?
Objectives and Service quality
To grab a considerable market share among the target group, small e-commerce companies tend to set certain objectives and hence have to maintain an appreciable service quality to ensure meeting these objectives. Some of the objectives set could be as stated below:
- High visibility and reach among Target Group
- Higher Sales conversion
- Customer satisfaction at its best
- Socially popular brand name and brand retention
As mentioned earlier, to achieve all these objectives, there needs to be superior service quality enforcing a good and respectable reputation of the brand. To achieve customer satisfaction it is necessary to provide the best service possible in terms of a smooth and seamless user interface, multiple payment options, quick and easily traceable product delivery etc. But, in case of any fault at achieving everything just perfectly, the grievance addressal plays a key role. Also, the companies need to be socially responsible in all its actions and communications, taking care of the fact to not to hurt sentiments of any social group and attract bad name for the brand. Also, maintaining product quality and its availability helps retaining customers and hence increasing the sales conversion. Easy delivery and returns through smooth logistics operations is also a key service parameter.
The future
Near future in e-commerce is ready to face a consolidation phase where some of the companies would stay and survive and others would be just churned out! To cope up with a competitive environment and grow, small e-commerce companies would have to take risks as well as carefully weighed decisions. To survive in the future, companies would have merger and acquisition options as well. The scope of expansion into semi-urban and rural areas is a promising area for growth of the start-ups. Internet accessibility and increased digital literacy in these areas are soon to open doors for e-commerce full-fledged. It can also be said that the key to a successful future for an e-commerce company lies in providing impeccable customer service and integrating a successful digital marketing plan.By focusing on the building blocks of e-commerce, companies can create a solid foundation for growth and success in the future.
E-commerce in India is at its prime with giants like Amazon, Flipkart, and Snapdeal owning the marketplace. It can also be said that the key to a successful future for an e-commerce company lies in providing impeccable customer service and integrating a successful digital marketing plan while leveraging the building blocks of e-commerce. The best way for smaller e-commerce companies to emerge and grow big is to fit in the cracks and fulfill requirements of niche and high-end customers! To grow ‘big’, the ‘small’ players will have to focus on the ‘smaller’ target groups offering a comparatively ‘smaller’ portfolio of personalized products and services to the niche segment!
