Friday 10 June 2016

Small players, traditional brands gain ecommerce share; dominance slipping away from marketplaces?

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The big guns of Indian ecommerce Flipkart and Snapdeal are grappling with problems. Their cost saving techniques hasn’t gone down well with sellers and funding is drying up too.
The ones that enjoyed a dream run for a long time are struggling. But small players, traditional retail and FMCG brands are making headway in the ecommerce business world.

No shortage of funds for niche etailers

Yesterday, Indian Online Seller reported that online jewellery store BlueStone is in talks to raise Rs. 200 crore. Today we have an update about another niche ecommerce player.
Fashion e-tailer Koovs has found a new investor in Indian mass media company HT Media that has invested £3 million (nearly Rs. 29 crore) for 8.2% stake.
Koovs’ Chief Executive Mary Turner shared,
“This investment shows further momentum in our capital raising and supports our focus on marketing in order to accelerate brand awareness and sales growth for Koovs in India. Our ambition remains to become India’s number one western fashion destination in India by 2020.”
The money will be used to support marketing activities and HT Media’s publication platform will used to create brand awareness.
The fashion etailer had raised Rs. 186 crore in April and Rs 212 crore in May this year.

Big FMCG and retail brands are looking to expand ecommerce footprint

In the last 2-3 years, traditional players have shown great interest in ecommerce. Right from Tata, Birla, Ambani and Biyani, they all have launched their respective online ventures besides investing in digital startups.
FMCG giant Dabur is looking at the ecommerce industry with renewed interest. The company that had entered the online space in 2014, is looking to adopt more aggressive strategy for their ecommerce arm DaburUveda.com.
“We do see that e-commerce is going to expand in a very big way. Thanks to technical development and increased mobile phone penetration, the e-commerce opportunity is going to be very very big. We feel that it is going to expand further in the middle and long term scenario,” said Lalit Malik, CFO at Dabur India.

Online Biggies’ days are numbered?

Small and niche online players are performing really well in terms of business and raising funds. And big traditional brands are using their decades of experience and sea full of money to implement economically viable business strategies unlike existing online marketplaces. Add to the mix, international players Alibaba and Rakuten.
After looking at the recent developments, it seems that the dominance of homegrown etailers Flipkart and Snapdeal might end soon. What do you think? Voice out your views.

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