Tuesday 14 April 2015

Clue to the future: A challenger emerges in Indian e-commerce

In what pitches it against India’s three biggest e-commerce names — Flipkart, Amazon and Snapdeal —  mass marketonline marketplace Shopclues has been aggressively adding sellers and building its catalogue. In the last one year, it has overtaken Snapdeal in the number of stock-keeping units (SKUs). According to a recent Morgan Stanely report, Shopclues has 16 million SKUs, less than Flipkart (20 million) Amazon (19 million). Snapdeal has 10 million.
When Shopclues started three years back, others, except Amazon, were already deeply entrenched in India. Snapdeal and Flipkart have been around for about eight years. Considering that, Shopclues is posing a serious threat to other e-commercecompanies that talk of the availability of higher SKUs and a wide range of merchants on their site.
Speaking of merchants, Shopclues is ahead of Flipkart and Amazon. Flipkart has 7,000 sellers and Amazon has 16,000. Shopclues is neck and neck with Snapdeal, with about 1,00,000 each. “From the very beginning our strategy has been around merchant acquisition and catalogue enrichment,” said Sanjay Sethi, CEO and co-founder of Shopclues. “Our focus has always been to have the highest selection ofproducts and offer them at the lowest prices”.
That seems like an echo. For the past two years, Shopclues rivals have been doing roadshows and press conferences talking of the growing number of merchants and widening their catalogue. “We have crossed Flipkart and Amazon in SKUs, and we are confident about that. They sell more of well-known brands, we are about empowering regional and local brands,” Sethi said.
Shopclues focuses on the unstructured mass market category, mostly for tier-II and tier-III categories. For example, if we take apparel as a category which governs 30-35% of e-commerce sales, Shopclues focuses on products in the rangeof Rs 300 to Rs 600.
The mass market e-commerce firm in January raised $100 million from TigerGlobal and two other existing investors. “Shopclues has emerged as the leading marketplace of choice for the millions of small and local businesses seeking to reach mass consumers in India’s tier 2 and tier 3 cities,” said Lee Fixel, partner at Tiger Global.
Shopclues reaches 12,000 pin codes and is expanding fast. It did a gross-merchandise-value of $400 million in FY15. More than 40% of its traffic comes from mobile, and it has 40 million monthly visitors. Sethi is aiming at 1 billion SKUs in the next three years.
Till now, it’s been a market of the big three. Shopclues might just be the fourth challenger in the race.

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