Small sellers find an online route to customers via tech platforms

Bengaluru: Small sellers, which retail mainly through big ecommerce marketplaces such as Flipkart and Amazon, are now trying to directly connect with consumers through technology platforms such as Shopify.

This comes at a time when they, led by an online vendors’ group, have intensified the fight against established ecommerce players over alleged predatory pricing and preferential treatment to select large vendors.

The All India Online Vendors Association (AIOVA), which has taken on these large marketplaces legally, has partnered with Shopify to help its around 4,500 members set up their own online storefronts.

"Due to the rising cost of sales at marketplaces and one-sided policies, sellers have been looking at finding alternative channels of sale…,” a spokesperson for AIOVA said.

For instance, imitation jewellery brand Jewel Kafe, which has started its own online storefront, has managed to grow its business using Shopify’s platform to about 1,000 orders a month, within three months, a sizeable presence in a short period. In comparison, Jewel Kafe services 2,000-2,200 orders a month on Flipkart, where it has done business for over three years.

"It’s not just an alternative to selling on Flipkart and Amazon, I continue to sell there as well,” said owner Harneet Singh. “We can connect with our customers, understand their needs, build relationships only through our own website,” he added.

Shopify, a Canada-based firm listed on the Nasdaq stock exchange in the United States, is seen as a challenger to the dominant marketplace model of e-commerce globally and has grabbed headlines and high valuations in the past couple of years. The company, which has a market capitalisation of nearly $44 billion, already works with brands such as Raymonds, Nush and John Jacobs in India, powering the backend of their online storefronts, according to its website.

Shopify did not respond to ET’s queries on its business in India. A Shopify executive, however, confirmed its partnership with AIOVA to bring more vendors onto its platform in the country.

Ronak Mehta, another small seller on Flipkart and Amazon who is on track to record a turnover of around Rs 1.5 crore in the current fiscal year, has seen some early success through Shopify. The platform is very intuitive while building a storefront, allowing one to buy various modules such as for shipment tracking, social marketing etc, he said.

“It’s still e-commerce, so the effort that goes into selling a product on my own website is the same as selling on Flipkart and Amazon,” Mehta, who sells personal care and beauty products, said. “But there’s a lot of flexibility to connect with customers for feedback and returns, track repeat orders, which is not possible on marketplaces.”

The cost of running his own storefront is higher than the fee he would have to pay to sell on a marketplace. This is mainly due to social media marketing spends, which Mehta looks at as an investment to build the brand.

Singh of Jewel Kafe gives marketplaces a commission of 25% on his imitation jewellery category, similar to the cost of selling directly, but he expects marketing costs to be offset by repeat orders from customers on his own website.

The National Company Law Appellate Tribunal recently overturned an order by India’s competition watchdog that said Flipkart and Amazon were not abusing their dominant market positions, on a complaint by AIOVA. The NCLAT also directed the Competition Commission of India to open an investigation into two Flipkart entities.