Ecommerce 1,2,3… e-Tailing in India
Let me start with thanking Mint, the business paper by HT group. They are probably the only national daily, which has a write up on Internet businesses almost every day.
But why is it? Is it because of Low internet penetration, lack of touch n feel, lack of trust, lack of payment options, low quality products?? Simple answer would be YES, all of them.
I disagree. As an entrepreneur running an e-commerce site; I don’t see any of the above factors hindering the growth of my business at least. There are over 35 million active internet users in India, who are my prospects. I won’t be able to reach this big a market size even with 50 or 100 retail shops. So even If I manage to convert a fraction of these Internet users as my customers, my business will surely be successful. This stands true for any B2C website.
Now how to reach these 35 million prospects? I can’t afford to spend x amount on advertising to acquire a customer worth x, assuming he will visit me again.
We tried to find a solution to above problem at Cafegadgets.in. All the major IT & mobile brands mention the names of popular retail chains where there products are being sold, across their communication to drive the footfalls and not just that, one of my friend in retail industry told me that ad revenues contribute to almost 40% of their bottom line.
I started wondering if it’s happening in retail then why not in E-commerce. Why don’t we ask our vendors to list us as their online store on their corporate sites, put a ‘Buy Now’ link on their online ads to drive traffic to our store? Provide us with ‘Authorized Online reseller’. We are not going to charge them anything but at least it will authenticate my e-store and drive highly relevant traffic to my site.
| Exclusive Brand stores were another option to get some fixed revenue from the vendors. But again, why would Apple give me money or give me the ‘reseller’ status unless I am selling 100 odd iPods a month? It was a chicken and egg situation, Advertising revenue follows volumes and for volumes, we needed traffic. We decided on opening up stores on all other market places, none of them really had any resellers in IT category selling reasonably high value products and we had expertise in this particular category. To start with, even 1 laptop a day through us would be equivalent to 30 odd orders from any other vendor(in terms of value) for these marketplaces, so we managed to get their attention and some share of their advertising. They started promoting our products and we started achieving our targets. Once we had decent enough volumes, we approached brand owners for special pricing and offers. Within 3-4 months, we managed to make most of our vendors realize that online is a great medium to liquidate their stocks and get some free branding. |
It took us 9 months to get our first cheque from the vendor to spend online to generate traffic for him for his products on Cafegadgets.in and since then there’s no stopping.
Today, Cafegadgets.in has 50,000+ customers, 75+ direct brand tie-ups, 4000+ products, 15 team members and most importantly, is profitable, within first year of it’s operations.
Isn’t it too simple? 1,2,3….
