Wednesday 11 January 2017

Is ecommerce a permanent business? Online sellers explain why & why not
It’s the start of another year. It’s that time when resolutions are made and changes are abundant. We look at everything in a new light and the probability of its success. The same goes with careers in the online retail business. Many have jumped into the mode of online selling and if not right now they may have at some point wondered if ecommerce is a long lasting business for them.
According to the pace at which ecommerce is growing and expected to keep growing, it appears that it is here to stay for quite some time. A NASSCOM report states by 2020 about 2/3rds of the ecommerce market will be dominated by online shopping. Redseer consulting claims, by then the online retail market will be worth $80-100 billion. So, we won’t see the industry of online retail blowing over anytime soon.
However, the introduction of the following created a bit of havoc in online retail –
  • FDI policy in ecommerce
  • Commission changes
  • Demonetisation
All of these greatly affected online seller’s earnings and may have made one question the possibility of continuing on in online retail.
Word from industry experts above shows that ecommerce is in demand and unlikely to end soon. We wanted to know what the average online seller believes – is ecommerce everlasting or not?
Indian Online Seller gathered the inputs of a couple of online sellers and we put together the following results.

Believers in unending ecommerce

According to these sellers, it is the factors of the current environment that are pushing the ecommerce industry to grow. The future’s promise of more development is guaranteed to keep the business of online selling from uprooting. Here’s what pro ecommerce persons had to say about the existence of this field of business.

Positive factors mean a good future – “Ecommerce will only grow”

The online seller knowledge community at received a question about the life span of ecommerce as a business. The following response was rated the best –

“Online retail is permanent” – But it does have its bad moments!

Bhavya Shah, a women’s apparel and lingerie seller on online marketplaces feels that online retail is a permanent business. At the same time, he also feels panicky and insecure when a drop in online sales occurs. However, this is a natural outcome of doing business and may be experienced offline as well.
The seller says, “We started selling online to let our brand and products get access to the nationwide market. It’s a fresh and young market. Also, its reach is infinite.”
On the other side, he also faces problems.
He mentions, “I often notice that marketplaces do not refine their marketing campaigns as they should. Targeting the right customers is far better than just running mass campaigns.”
When asked if this issue was enough to make him end his online retail career, he replied saying,
“Absolutely not!”

Online retail is permanent – “Because no one has time to shop offline!”

“Nowadays no one has time to go for shopping. Everyone is busy and the traffic conditions and geographic distance of shopping mall/shops make people want to shop online. No one has time for themselves and the Indian youth is not interested in long trips to shops,” claims Prabhat Srivastav, an online seller in footwear and apparel.
Prabhat also claims that there are high levels of competition in ecommerce and this makes breaking even difficult. Yet he believes his online retail business will continue on.

Online selling is a permanent business – “It is very easy to start immediately”

E-Retail Solutions informs us that ecommerce is permanent in their opinion.
“This is because one does not need to have a shop in main locations. So, for us it was very helpful to sell across India without having a shop. We started from one room,” the ecommerce company says.
It further states, “It was very easy to start an online business immediately and with less investment. You only need money to purchase your supply. But if you are an offline seller then costs would be tripled. Low investment and controlled expenses can only work in online selling.”
But online selling is not a bed of roses. E-Retail Solutions states that there are certain difficulties that happen to hamper online selling. These involve fake orders, heavy returns, unfriendly marketplace policies and platform glitches.
When we inquired if quitting online selling ever occurred to E-Retail Solutions, the firm’s response was,
“Not yet, it will never happen until we get into a situation where we can’t earn anything then we would have no option left but to quit.”

Believers in temporary ecommerce

Some sellers claim that ecommerce is a short term business. They feel the business of online selling will come to an end for them because of some very similar reasons. Let’s take a look at what the naysayers had to say.

Bailing on a sinking ship – “I’m in the process of quitting”

Online camera seller under the brand Krishna Digital claims, that online retail is not a permanent business from his perspective. He feels online retail may continue like experts claim but for average sellers like him, this form of business could end.
The seller states, “The distributors and bigger players can turn the tables at any time. Right now, there were specific cameras which were not moving at my place of business but were in demand online.”
The added bonus of not offering after sales services made the whole deal of online retail perfect in the eyes of the seller. But, the continuous
  • Hassle with product pricing
  • Customer returns for unthinkable reasons
  • Payment delays after successful deliveries
made the experienced seller rethink his move to sell online. As a result, he says that he is currently in the process of quitting online retail.

Online retail is not a permanent business – “It’s a secondary business”

“We don’t think ecommerce is a permanent business. It’s more of a secondary business, wherein more of offline sellers are selling online, to increase the reach of their products,” says Shashank Sarpa
The online clothing seller has his own brand and wanted to promote it. The reach of online channels gave him and his colleagues the opportunity to sell and promote their brand all over the country, even remote places, at a low investment.
But his ecommerce business comes with certain issues that threaten his existence online.
Shashank informs us saying, “A very big issue which jolts us is customer returns for unexplained reasons and selling channels fining us for those reasons. This problem is not faced in offline trading. Also, the payments in offline retail we get instantly but in online retail we have to wait for 7 days, this affects branded products.”
In spite of these troubles, there are pros he says and doesn’t see himself quitting this online segment of business just yet. He feels that quitting will be considered only once it is no longer lucrative or turns into a liability, a simple business rule he says.

No stability due to changing policies

Another online seller who wished to remain anonymous says, “Ecommerce is not a permanent business. This is because policies keep changing. Sellers do not receive much support.”
This he feels will lead to the demise of the Indian online retail industry.

Online retail will fail – “That’s because of unauthorised sellers”

Madan and Varun are both partners in online retail. They have been selling VIP bags online for 2 years now. Both believe that online retail is not permanent because of the rise in unauthorized sellers in the industry.
Low employee requirement, no possibility of bargaining and fewer employee requirements made this choice of business attractive to these sellers. However, weird policies by online marketplaces and approval of fake sellers are making it difficult to do business online, the sellers reveal to us.

Marketplaces rule the game – “Ownership of your business lies in the hands of marketplaces”

Seller Eesha deals in the sale of apparel and has been selling on online marketplaces. The seller says, “The journey has been good so far, however, we can’t predict the future.”
So based on experience in online retail the seller feels that the industry may not be permanent. This is because marketplaces have ownership over seller businesses.
The seller further states, “No matter how hard you work, if they (marketplaces) don’t want your products to sell, you cannot do much about it. In addition to this tracking payments is a difficult task.”
Another seller in home furnishings and health care, Hitesh Jain seconds this statement by Eesha.
“The dominating nature of marketplaces is growing. You cannot focus on online business to make yourself profitable. All marketplaces draft the policies ONLY KEEPING IN MIND THEIR SELFISH NATURE and do not think of the seller margins. They do not respect the inventory of the seller and returns are treated in such a way that it is a trash now,” He says in disgust.
The seller also has his own retail website. He claims it is far better to have your own platform as you can control the returns from buyers. Hitesh says marketplaces help increase brand awareness, but due to dominating aspects he has now quit a couple of them.

“Ecommerce is not permanent for 3 main reasons!”

According to online seller Ravi Bhesadadiya, ecommerce is not a permanent business. He explains why through the following reasons 3 reasons –
  1. Marketplace partiality
Online marketplaces rule the online retail segment of ecommerce. Ravi suggests that these online marketplaces use their own selling units to sell products and make sure that they receive preferential treatment on the platform. He says it is difficult to compete with Cloudtail, WS retail and so on because they are always selected first for deals of the day, promotions and buy boxes.
  1. Increase in costs
The continuous rise in costs is making it difficult for sellers like Ravi to earn actual profits.
  • Marketplace commission
  • Shipping fees
  • Return fees
  • Packaging costs
  • Damages costs
  • Business costs
All of the above reduce the profit earned drastically, the seller says.
  1. Building competition
As we’ve discussed online retail is only going to get bigger and the number of sellers in the game will only increase. Seller Ravi says this rising competition is the final reason why ecommerce will come to an end. It will lead to market saturation.
As you can see, both categories of sellers face similar issues in their ecommerce businesses. However, their outlook on the longevity of ecommerce differs based on their experiences in the field. Ecommerce is the new way of life and the existence of this industry cannot be extinguished. On the other hand, one can choose when it’s time to end this business for himself. For the rest, it’s just another day at work.

How can online retail continue on and reach its full potential?

We asked online sellers what actions could help the industry pick up momentum towards its full potential. To this, we received various points that could help push online retail to grow much faster.
Online seller Bhavya may not want to quit online selling, however, he does feel that there are a couple of tweaks online retail needs in order to meet its potential.
The online seller with 4 years experience in online selling lists,
  1. Proper Marketing
  2. Cut-down logistics costs and time
  3. Limited returns
As the main aspects of ecommerce that need to be changed.
In online seller Shashank’s opinion, the three ways in which online retail can acquire its full potential are:
  1. The government should push this industry.
  2. Online selling channels should take on the responsibility to provide sellers only genuine buyers.
  3. Buyers should not be driven only by offers and discounts on products. Genuinity of products in terms of pricing and quality while purchasing must also be considered.
Madan and Varun state more attention needs to be given to:
  1. Marketing
  2. Branding and awareness instead of discounts
This way online retail will be able to flourish.
Seller Hitest feels that online retail can develop and grow even though there are difficulties presented by marketplaces.
He suggests the following points from both the buyer’s and seller’s perspective for continuous ecommerce –
From buyer’s point of view:
  • No fake/copy product
  • Transparent pricing
From seller’s point of view:
  • Reduce selling commissions and have a fixed % which at the moment it confusing and strange
  • Huge & unjustified shipping charges & return charges should be avoided. The shipping charges being charged are 60% more than industry standards
  • Have a validated return system. Do not just accept the returns to fulfil customer dreams.
Apparel and footwear seller Prabath believes that online retail is the way forward due to changing trends among consumers and their fast paced lives. However, the industry of online selling needs to attain the following goals for better prospects –
  1. Timely payments (from the marketplace perspective)
  2. 99% delivery rate (from the perspective of logistics providers)
  3. Returns within a 7-day timeframe for genuine reasons only (from the consumer’s perspective)
The three main things E-Retail Solutions suggests online retail needs are –
  1. Change in marketplace policies – There are pros & cons to the current policies. Some customers manipulate these so marketplaces should work on delivering better policies. It will eventually reduce fake claims/returns, fake orders etc.
  2. Control over logistic charges – This one should be controlled as this is the main expense which eats into seller profits.
  3. Improved seller support – Seller support teams from marketplace should be more educated and aware of things. They should be able to completely understand the issue sellers face from the ground level.
This is how sellers believe online retail can grow fruitfully instead of just in size. How do you feel about your ecommerce business? Is it coming to an end because of the current obstacles or is it likely to flourish despite troubles? Tell us your story in the comments section below.

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