Thursday 28 July 2016

70% of online fashion market in Flipkart’s hands; can small players survive?

Flipkart shook the online fashion industry by acquiring Myntra in May 2014. They have managed to do the same yet again by buying Jabong in July 2016.
This IOS article points out how the possibility of Flipkart towering over online marketplaces Snapdeal and Amazon is high. But with nearly 60-70% of the online fashion market share in Flipkart’s hands, small etailers too may find it hard to sustain their business.

From rivals to partners

Until few days ago, it was Myntra VS Jabong. The new partnership has changed that. Exclusive fashion players like Limeroad, VoonikKoovsAjioAbof, and Cliq overnight woke up to find one dominant player that now has the power to control 70% of the online fashion industry.
Flipkart’s massive reach combined with Jabong’s premium brands and Myntra’s private labelswill make it difficult for new entrants and fashion startups to compete. The trio can now offer a wide range of products at best possible prices and discounts, which will force other e-fashion portals to increase their marketing and promotion budget.
Sreedhar Prasad, Partner – Management Consulting at KPMG India shared,
“This will give them (Flipkart, Myntra and Jabong) a lot of bargaining power with the sellers and the sellers will, in turn, have to adhere to their conditions because about 70% of the online fashion market is with them… This could give them significant bargaining power with sellers and media buyers.”

Differentiate or consolidate to stay afloat

One of the top trends of 2016 is consolidation. And Flipkart-Jabong merger proves that forming strategic partnerships is key to survive in this highly competitive ecommerce industry.
Experts believe that those who don’t want to integrate with other firms will have to find ways to differentiate their product offerings.
“In this category, the niche and specialised players will continue to grow if they are well differentiated and maintain customer experience. However, rapid growth in this category may become difficult since about 70% of the market will be with one player, which will get a large share of the trigger-based or impulse purchases,” reasoned Prasad.

Will Jabong be Flipkart’s guinea pig?

The ecommerce biggie experimented with app-only platform through Myntra, which didn’t sit well with buyers. Flipkart was keen on becoming an app-only online marketplace but had to change its plan and also re-launch Myntra’s desktop site.
Will Flipkart repeat the same strategy with Jabong? The ecommerce leader got hands on the fashion etailer at a discounted rate of $70 million. It can try out new business strategies to lure more customers. But will Flipkart be able to utilize its fashionable advantage effectively? Or will Jabong (with heavy losses and pending governance allegations) add to the marketplace’s existing burden?

Wednesday 27 July 2016

Amazon Prime launched in India; In time to get a headstart on Flipkart’s F-assured?

amazon prime
The battle of the titans continues with Amazon taking things to a new level with Amazon Prime. The US based ecommerce major has introduced Amazon Prime in India. The exclusive club grants members several benefits including: free shipping at no minimum purchase, free one day or two day delivery, and a 30 minute edge on non-members at lighting deals. However, these benefits are available only on select products. Quite like Fulfilled by Amazon, Prime has a defined area in terms of the products available.
A shopper can sign up for a 60 day free trial, post which she or he can opt to pay for the service. The annual fee for Prime will be Rs 499 for those who opt for the free trial available now, and Rs. 999 for those who don’t choose to sign up for the trial. Mumbai, Hyderabad, Delhi, and Bangalore get a reduced price on same day, morning and scheduled delivery.

Lacking sheen

Mohul Ghosh of Trak.in feels that the company has not offered incentives that are attractive enough. He says,
“However, considering the fact that Amazon is planning to invest Rs 2000 crore for creating original videos under Prime services; it is indeed shocking that they have not mentioned anything regarding Prime Videos and Prime Music, the two unique differentiators for their US customers.”
He maintains,
“Unless Prime promises some cool, exclusive content and Amazon Music ensures top of the class songs, at faster streaming, there isn’t much attraction in choosing Amazon Prime. If we compare with Flipkart’s just launched ‘F-Secured’ services, then there isn’t much differences as of now.”

Prime – the story so far

Amazon Prime was launched in 2005 in its home country, with Instant Video making its appearance in 2011. Today, the membership costs about $99 annually. The features offered were quicker delivery and unlimited features with the annual fee.
Experts feel that getting a membership makes sense for a frequent shopper. This Fortune article concludes that Prime goads its members to shop (three times) more than they normally would.
It definitely looks like Indian shoppers will warm up to the concept. With millions of dollars put in the bucket, Amazon has no problem in whipping up an etail storm. Will the others be able to catch up?

Snapdeal’s refunds faster than Flipkart, Amazon; Tweaks to returns policy pays off?

New Delhi-based online marketplace Snapdeal revised its returns policy this month. And the changes have paid off as the etailer’s refund and reverse pick-up process is quicker than rivals Flipkart and Amazon, as per Shopper & Channel Marketing Company ChannelPlay’s report.
ChannelPlay studied the three ecommerce leaders’ orders placed between May and June 2016. The biggies’ refund, replacement and reverse pick-up process for apparels, electronics and home décor across 20 cities were scanned before declaring Snapdeal as the fastest.
Flipkart and Amazon take 2.9 days and 4.5 days to deposit refund amount, respectively. On the other hand, Snapdeal takes 2.3 days. As for the reverse pick-up time, Amazon takes 33.6 hours, and Flipkart 31.2 hours. Snapdeal takes the least time – 26.4 hours, to arrange for a pick-up.

Snapdeal wants to ace the race for the fastest etailer

In May this year, IOS reported about Snapdeal outplaying Flipkart and Amazon by becoming the fastest delivering ecommerce player in India.
It’s mostly Flipkart or Amazon that dominate the Indian ecommerce market. Kunal Bahl’s company is losing market share, which has led to speculations about the marketplace nearing its end.
But Snapdeal has upped its game by acquiring companies, reducing discounts and improving logistics & technology.

The menace of returns on marketplaces

High returns and refund rate in ecommerce is a huge cause of concern for online sellers and marketplaces. The growing population of fake buyers is further fuelling high returns. This is why ecommerce leaders from Flipkart, Snapdeal to Ebay are altering returns and refund policies.
Is there a simple solution to this problem? Is reducing the returns time-range enough? Or will it simply add pressure on sellers to process returns and refund faster?

Myntra to delist 200 non-performing brands; Move towards profitability?

Bad news for non-performing brands in Myntra – the company will be removing them to make way for the bigger fish. Rumour has it that the ecommerce company is planning to remove 200 brands (about 10%) from its dossier.
A person familiar with the proceedings said anonymously,
“Myntra has a long tail of small brands that are not contributing much in terms of sales. They will focus on bigger brands that will bring more business. The smaller brands take away your bandwidth, and even if you are not paying for the stocks, you have to have a team managing them.”
Sreedhar Prasad, partner ecommerce at KPMG, points out the logic behind this,
“During the evolution period, online players aggressively on-boarded brands and sellers. Now as they are slowly evolving, they are trying to become far more contextual for their consumers.”

On the tracks of a bullet train to turn profitable

Myntra seems to be trying every trick in the book to ramp up. The company recently reopened its website, admitting that its closure was not the best idea. Shorty after that, it went from a fashion only portal to more inclusive one. It looked to add jewellery, furniture and personal care to its arsenal. It recently announced that it would concentrate on private brandsincluding HRX and Roadster. The company also plans to open its first offline store shortly. It also is keen on international brands.
All these moves appear to be calculated and well thought out with the sole intention of turning profitable. Myntra has also won the battle of acquiring Jabong possibly with a view to trimming competition. With its latest plans revealed, it seems like Myntra is serious about its future plans. Discounts are also a thing of the past. If companies start breaking even and making profits, we can safely conclude that Indian ecommerce has come of age. We hope it is sooner than later. 

Flipkart gains fashionable edge over Amazon, Snapdeal with Jabong-acquisition

Who wouldn’t give a dollar for Snapdeal thoughts after Flipkart snatched Jabong from its hands? From being the front-runner to a straggler, suddenly losing out the deal must be a bitter pill to swallow for Kunal Bahl’s company.
In fact, Flipkart may have killed two birds – AmazonSnapdeal with one stone – Jabong-acquisition.

Snapdeal blindsided

Industry watchers assumed that the ecommerce world is soon going to get a new strong partnership similar to Flipkart-Myntra. But to everyone’s surprise, Rocket Internet’s fashion portal merged with Bansals’ firm and Kunal Bahl got blindsided.
Reports reveal that while Jabong’s officials were in talks with Snapdeal about the acquisition arrangement, Flipkart directly got in touch with Global Fashion Group, the fashion etailer’s parent company and sealed the deal.
It was Lee Fixel, partner at Tiger Global Management (Flipkart’s largest investor) who encouraged Flipkart’s managers to buy Jabong.
An undisclosed source revealed,
“The price was very attractive and Lee was in favour of picking up Jabong. With Jabong, Flipkart will be out of reach of Amazon for good in at least one category. Lee really pushed for the deal.”
Snapdeal was concerned about the corporate governance violation allegations on Jabong’s ex-manager and wanted to make sure that the company doesn’t get embroiled in a legal probe. Flipkart took advantage of this and grabbed Jabong.
“Speed is very important in the last leg of the cycle, especially when there are multiple people in fray. Snapdeal’s legal team sent a long list of conditions; they were negotiating hard. They were worried about an investigation (into alleged irregularities at Jabong)…, if it happened post the acquisition,” revealed one person close to the development.

Will Flipkart rule the online fashion world?

Most likely.
Fashion and lifestyle is one of the top product categories in ecommerce. Needless to say, etailers give special attention to this segment. Myntra and Jabong were the top two fashion etailers. Koovs and online portals of retail giants Birla, Tata and Reliance too have been fighting for fashion ecommerce share.
Amazon Fashion’s latest 360-degree ad campaign ‘Citizens of Fashion’ with Parispur and Rioganj is hard to miss. The marketplace’s previous campaign ‘Kya Pehnu’ too focused on Amazon’s aim to be recognized as India’s online fashion destination.
With Myntra in its kitty, Flipkart was already a leader in the online fashion industry. It won’t be wrong to assume that Snapdeal which is not a strong e-fashion player was keen on buying Jabong to gain a fashionable advantage like Flipkart and Amazon.
Now that it has landed in Bansals’ lap, the ecommerce leader may reach indomitable form, at least in the e-fashion industry. It will also strengthen its market leadership position, which was in danger because of Amazon India’s rising popularity.
Ananth Narayanan, CEO, Myntra said,
“Jabong has built a strong brand that is synonymous with fashion, a loyal customer base and a unique selection with exclusive global brands. The acquisition of Jabong is a natural step in our journey to be India’s largest fashion platform. We see significant synergies between the two companies, especially on brand relationships and consumer experience.”
Let’s see how Flipkart manages to create separate identity for Jabong. Also, will Amazon dig into its $3 billion to compete with trio Flipkart-Jabong-Myntra on the fashion front? And will Snapdeal wrap up? 

Monday 25 July 2016

Fake buyers in ecommerce on the rise; refurbished segment hit the hardest?

Ecommerce companies in the luxury goods segment are facing the problem of fake orders. ‘Shoppers’ from Tier 2 and 3 cities are either cancelling orders after placing them, or worse, refusing the products that are arriving at their doorstep. Some unscrupulous elements also give fake phone numbers and addresses that create problems for the delivery personnel.
About 2% of the total orders are fake. Vijay K G, founder of Luxepolis, a site that sells luxury refurbished goods, thinks of a possible reason for this behaviour,
“Perhaps a lot of people order on impulse after seeing pictures of luxury goods they have been besotted with. Later, they develop cold feet and cancel the order at the last moment.”
Anvita Mehra, co-founder of Confidential Couture, points out the problems related to these incidents,
“Since these goods are expensive, we have to make sure they are returned to our warehouses as soon as possible and not left in the hands of the delivery personnel or courier boys for long.”

The business of refurbished goods

What are refurbished goods? They are products that belong to the luxury category that have been taken out of their packaging. These products can be anything from products with a minor defect, or returned to the seller (therefore removed from its original packaging), returned to the manufacturer. They could also be demo pieces that have been put up on display.

What could help counter these elements?

A lot of resources are going down the drain through spam orders, including logistics costs and delivery personnel’s salary. So what are the companies doing to prevent these occurrences? Anvita Mehra personally supervises the orders. She says,
“I monitor all orders and all customer care operations myself to minimize losses and sometimes see that personal calls have to be made. We immediately flag orders where 10-20 items are added in the cart.”
Vijay K G has security systems in place to detect spam bots,
“We also log in details of every server that we use and track it often to track IP addresses of the devices from which such orders come through. In future, whenever an order is placed again from the same IP, we put extra checks on it.”
It would also be prudent to verify pin codes and telephone numbers in case of suspicious activity. Limiting the CoD orders could also deter fake elements from placing orders. What do you think can help? Add your suggestions in the comments section below.

Another FMCG major, Himalaya adopts aggressive ecommerce strategy to expand business

Healthcare brand Himalaya Herbal witnessed a 123% rise in sales after collaborating with ecommerce leaders Flipkart, Amazon and Snapdeal. This surge in sales has fueled the personal care brand’s interest in developing its online sales channel.
“We started selling our products on the e-commerce portals including Amazon, Snapdeal and Flipkart last year and sales through this channel saw a 123% jump. Our online sales are growing at 70% per year, and we expect it to touch Rs.100 crore by 2018,” revealed Ganesh Ramaswamy, Manager – Web Services at The Himalaya Drug Company.

Mobile app on the cards

Majority of ecommerce transactions happen on the mobile platform, be it m-site or app. Himalaya too wants a slice of m-commerce pie by launching its own app.
“Online traffic is over 65% from mobile devices, and we are in the process of unveiling a mobile application as well. It is currently under pilot in Bengaluru and we will integrate our online business with all our 170 offline retail outlets by year end,” said Ramaswamy.
The brand is keen on strengthening its omni-channel network by focusing equally on offline outlets, online store & marketplaces and mobile app. The ecommerce channel in particular will enable Himalaya to increase its reach and sales by fulfilling remote orders.
“We are seeing a good number of orders from tier III cities and more rural areas, where distribution may be a channel. That way, online business can help us service these areas better,” stated Ramaswamy.

Established brands cash in on ecommerce

Many well-known brands have explored online sales channel to expand their business in recent times. Ecommerce has helped many lost-and-forgotten traditional brands to make a comeback.
Last month, FMCG brand Dabur acknowledged that e-commerce opportunity is going to be very big and thus decided to market its own online store DaburUveda.com aggressively.
The popularity of online shopping has only grown with time. And thanks to the rapidly evolving mobile ecosystem, the ecommerce industry is multiplying like mushrooms after the rain. No wonder from retail giants to individual brands, all are riding high on the ecommerce fever.

Saturday 23 July 2016

Snapdeal’s Shopo reaches 2lakh Online Sellers; Time to woo buyers by integrating with Freecharge!

http://shopo.in/sell
In the span of 3 months Shopo managed to double its seller base from 1 lakh sellers in April to 2 lakh in July! The customer-to-customer online marketplace is backed by Snapdeal and encourages small and medium scale businesses to sell online through its zero commission medium. The goal is to reach as far as 1 million online sellers by 2017 and the ecommerce platform seems to be inching closer.
Shopo now showcases 50 lakh plus product listings on account of its expanding seller base. The average ticket size is Rs. 600 since the marketplace mainly deals with non-branded handicrafts, fashion accessories, mobile accessories and home décor. Snadeep Komaravelly, senior vice president at Shopo claims the potential of this ecommerce platform will be driven by its growing seller base.

Partnering with Freecharge for escrow protection

Shopo is slowly winning the hearts of online sellers and now it’s time to build an online buyer base big enough to meet their supply. To strengthen its user base Shopo plans on improving its online shopping experience.
On Wednesday, the online retail platform announced it will maintain an escrow account for its platform in partnership with Freecharge. An escrow account maintains consumer money safely until the consumer himself confirms the delivery of his order. With the help of this feature the buyer is protected from risks like unresponsive sellers and product non-delivery.
Shopo also launched a desktop and mobile version of its marketplace on Wednesday.
“The refreshed user interface, our integration with Freecharge and our expansion to the web and mobile site are all steady steps towards building a platform that empowers our sellers as they grow with us,” Snadeep said.

Is Shopo making any money?

Shopo is a zero commission online marketplace. So how does it make any money? Snadeep mentioned it will take the online marketplace three months to have its monetization strategy in place. What we know so far is the platform wants to indulge in advertising and promotions to make some money.
Currently advertising and promotions brings in a steady stream of revenue for ecommerce platforms Snapdeal and Flipkart and Shopo plans to replicate the same for itself.

Snapdeal’s Shopo reaches 2lakh Online Sellers; Time to woo buyers by integrating with Freecharge!

http://shopo.in/sell
In the span of 3 months Shopo managed to double its seller base from 1 lakh sellers in April to 2 lakh in July! The customer-to-customer online marketplace is backed by Snapdeal and encourages small and medium scale businesses to sell online through its zero commission medium. The goal is to reach as far as 1 million online sellers by 2017 and the ecommerce platform seems to be inching closer.
Shopo now showcases 50 lakh plus product listings on account of its expanding seller base. The average ticket size is Rs. 600 since the marketplace mainly deals with non-branded handicrafts, fashion accessories, mobile accessories and home décor. Snadeep Komaravelly, senior vice president at Shopo claims the potential of this ecommerce platform will be driven by its growing seller base.

Partnering with Freecharge for escrow protection

Shopo is slowly winning the hearts of online sellers and now it’s time to build an online buyer base big enough to meet their supply. To strengthen its user base Shopo plans on improving its online shopping experience.
On Wednesday, the online retail platform announced it will maintain an escrow account for its platform in partnership with Freecharge. An escrow account maintains consumer money safely until the consumer himself confirms the delivery of his order. With the help of this feature the buyer is protected from risks like unresponsive sellers and product non-delivery.
Shopo also launched a desktop and mobile version of its marketplace on Wednesday.
“The refreshed user interface, our integration with Freecharge and our expansion to the web and mobile site are all steady steps towards building a platform that empowers our sellers as they grow with us,” Snadeep said.

Is Shopo making any money?

Shopo is a zero commission online marketplace. So how does it make any money? Snadeep mentioned it will take the online marketplace three months to have its monetization strategy in place. What we know so far is the platform wants to indulge in advertising and promotions to make some money.
Currently advertising and promotions brings in a steady stream of revenue for ecommerce platforms Snapdeal and Flipkart and Shopo plans to replicate the same for itself.

Snapdeal’s Shopo reaches 2lakh Online Sellers; Time to woo buyers by integrating with Freecharge!

http://shopo.in/sell
In the span of 3 months Shopo managed to double its seller base from 1 lakh sellers in April to 2 lakh in July! The customer-to-customer online marketplace is backed by Snapdeal and encourages small and medium scale businesses to sell online through its zero commission medium. The goal is to reach as far as 1 million online sellers by 2017 and the ecommerce platform seems to be inching closer.
Shopo now showcases 50 lakh plus product listings on account of its expanding seller base. The average ticket size is Rs. 600 since the marketplace mainly deals with non-branded handicrafts, fashion accessories, mobile accessories and home décor. Snadeep Komaravelly, senior vice president at Shopo claims the potential of this ecommerce platform will be driven by its growing seller base.

Partnering with Freecharge for escrow protection

Shopo is slowly winning the hearts of online sellers and now it’s time to build an online buyer base big enough to meet their supply. To strengthen its user base Shopo plans on improving its online shopping experience.
On Wednesday, the online retail platform announced it will maintain an escrow account for its platform in partnership with Freecharge. An escrow account maintains consumer money safely until the consumer himself confirms the delivery of his order. With the help of this feature the buyer is protected from risks like unresponsive sellers and product non-delivery.
Shopo also launched a desktop and mobile version of its marketplace on Wednesday.
“The refreshed user interface, our integration with Freecharge and our expansion to the web and mobile site are all steady steps towards building a platform that empowers our sellers as they grow with us,” Snadeep said.

Is Shopo making any money?

Shopo is a zero commission online marketplace. So how does it make any money? Snadeep mentioned it will take the online marketplace three months to have its monetization strategy in place. What we know so far is the platform wants to indulge in advertising and promotions to make some money.
Currently advertising and promotions brings in a steady stream of revenue for ecommerce platforms Snapdeal and Flipkart and Shopo plans to replicate the same for itself.

Sellers to bid for prime ad slots in Shopclues’ new ad platform ‘AdZone’

http://blogs-images.forbes.com/saritharai/files/2015/08/ShopClues-1940x1293.jpg
Yet another ecommerce player is taking the advertisement route to make a little dough. Shopclues has introduced an advertising platform for its merchants. In association with online advertising technology company C1X, Shopclues has rolled out AdZone, a self help ad platform for its sellers. The sellers can bid for prime slots starting at Re. 1.
Shopclues co-founder and chief business officer Radhika Aggarwal said,
“This platform will immensely boost the visibility of products and maximise product views, thereby helping vendors to increase their business with us. The bidding system ensures transparency, while our differential bidding mechanism for products is essential for retailers advertising varied products.”
The test run has done well, says vice-president of products Arun Goel. Goel said,
“We ran a pilot with about 300 merchants on the AdZone platform, and the results were extremely positive. We ran 1,000 ad campaigns over a 10-day period, and our merchants saw a healthy return on their investment.”

Turning to other sources of income

Ecommerce companies are pulling up their socks and trying to turn profitable.Flipkart and Snapdeal have their own ad platforms too. With funds getting scarce, the going is getting tough for the industry. Discounts might pull in the buyers, but they will not help in making money.

‘We are not merging with Flipkart’, Shopclues

In the meanwhile, Shopclues’ CEO Sanjay Sethi has put end to rumours that the company is going to join hands with Flipkart. He said,
“Really speaking, it is not the fact. Of course, mergers help but do not guarantee businesses to grow.”
Sethi said that money would not be a compelling enough reason for companies to join their competitors.
Shopclues is taking measured steps towards a steady path ahead. Identifying the importance of payment platforms, the company has recently acquired mobile payment company Momoes. The company, which focuses on Tier 2 and 3 cities, is also creating opportunities for its sellers. It recently got together with GoDaddy to help its sellers create their own stores. The company also connected with Indifi to enable its merchants to get loans without much hassle.
It looks like Shopclues is following a balanced approach by keeping in mind both its sellers and profitability.