Top venture capital (VC) investors like SAIF Partners, Sequoia CapitalIndia and Matrix Partners India are making about half a dozen early bets on a new set of e-commercecompanies. These startups are catering to the next 100 million internet users who have come to the e-market. The startups — Bulbul, Simsim, WMall, Mall91 and DealShare — are using vernacular language to make the user comfortable and also make shopping social as they look to tap consumers who are still not comfortable on platforms like Flipkart and Amazon India.
While DealShare is in talks to raise $2-3 million from New York-based hedge fund Falcon Edge and Matrix Partners India, WMall is likely to bag $1-2 million from SAIF Partners. Bulbul — a video-based e-commerce platform — is being backed by Sequoia Capital, while Mall91 is raising Rs 5-7 crore from Beenext, said sources in the VC industry. Most of these platforms are still testing their products and are in beta stage.
When contacted, these companies declined to comment on their fund-raising. Matrix Partners said it has no comments to offer. Emails sent to the other investors did not elicit any response till the time of going to press.
Besides tier-2 and -3 towns, even the tier-1 market has businessmen, housewives and other consumers who are not used to shopping online in a foreign language, setting multiple filters, said Amit Bagaria, co-founder of vernacular e-commerce platform Simsim.
“A relative of mine calls me every time he needs to place an order online. He is well educated with adequate disposable income. He is almost intimidated by these platforms, which is why they go to offline stores or shopping malls and that’s the behaviour we are aiming to change,” said Bagaria, who has worked for seven years in senior roles at Flipkart and Paytm.
Some of these platforms are also leveraging the bargain-hunting and social-shopping behaviour to build trust. For instance, Jaipur-based DealShare rewards a user based on the number of times he or she is able to share a deal with friends and family who eventually buy it. The more people you can nudge to buy, the higher your incentives are.
WMall is experimenting with sending deals to customers on WhatsApp on a daily basis. “The window-shopping concept is not being catered to by the likes of Amazon or Flipkart. But people have started realising social channels can be used to drive this behaviour. Now there are sellers on Facebook, Instagram too,” said Harmin Shah, co-founder of WMall.
Product categories on these platforms are also different with unbranded fashion, household products, beauty and other accessories being the focus areas, unlike exclusive smartphones, large appliances and other branded goods for such platforms as Flipkart and Amazon India.
What has encouraged these startups is the IPO — at a $25-billion valuation — of China-based group-discounting platform Pinduoduo, which has been able to carve out a significant share against dominant platforms Alibaba and JD.com in that country.
The leading internet companies are after the 80 million users who transact regularly, said analysts. At the end of 2018, India had 462 million internet users, according to data platform Statista, and new e-commerce firms hope they can get the first 100 million of the new users.
Investors feel that some of these new platforms can also create a niche market, and that new channels for e-commerce will emerge, according to Rahul Chowdhri, partner at Stellaris Venture Partners. “Using social, selling mobiles might be hard, which is a branded item and a structured space. But selling fashion is very obvious. So certain segments would work and some won’t,” he said.
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