New players give competition to old e-retailers

E-tailing in India is on a growth track with customers from small towns too jumping into the online retail bandwagon. Efficient customer service, wide product range, exclusive brands, deals and discounts and shopping experience at a mouse-click from the comfort of one’s home

has led to many young entrepreneurs jumping into the field, giving tough competition to the established players.

The new entrants, some whom are less than two years old are raking in unexpected revenues, while some of the old and mature players are struggling to keep the momentum alive. Fashionara, a multi-brand fashion portal, for instance is looking to generate revenues worth Rs 100 crores next year.

Competing

for growth

The gimmicks behind their success, is an easy to manage workforce, focus on technology and effortless customer service, better shopping experience, wide reach, and reaching out to experienced e-shopper looking for more. As a part of their mission to grow, these newer platforms offer tailor-made services like video catalogues, interactive product displays and a loyalty programs apart from trial-at-home, alteration as per required size, same-day delivery, and instant exchange in case of premium products and so on.

Maintaining the entire operation in a cost effective way is another formula these companies are adopting. Fashionara, for example, employs just about a 100 people. The company has raised less than 10 million dollars (Rs 62.5 crores) since its launch 15 months ago. It is developing a business model that follows tight cost control and to manage this, the company does the deliveries on its own instead of assigning the job to third party courier services.

Other specialised fashion portals such as Limeroad and Zovi have collectively raised about Rs 280 crores, whereas larger players such as Flipkart and Snapdeal, which retail a wide range of products have raised over Rs 3,400 crores of equity capital since their launch in 2007 and over Rs 620 crores since 2010 respectively.

Be innovative, aim small, achieve better

Experts say, there is a room for new entrants in the e-tailing space, whose growth targets are not too big, who focus on limited product categories and are innovative in their approach. Two-year-old Zovi, for example, follows a fast fashion approach and concentrates on offering its own apparel and accessories. The company aims to achieve 250 million dollars (over Rs 1,500 crores) target in revenues in three to four years.

Limeroad, on the other hand, is a social shopping site aimed only at women and follows a managed marketplace model. Over 50 percent of its products are only sold online on the site. The company also allows users to create 'scrapbooks', where they can put together various items like a dress, footwear and accessories to create a desired ‘look’ on their own, which can be shared on social networking sites like Facebook. They can earn monetary rewards when the products are sold through their scrapbooks. Also over 300 vendors who sell on the Limeroad platform, manage their own inventory and handle shipping.

In today’s era of e-commerce, small players really seem to be turning out big with focused and innovative approach.