Hit & Miss of the Indian E-commerce Giants
Introduction - E-commerce platforms have become a major part of our lives. In this modern era, there are all kinds of products online for people to shop everything from the comfort of their homes.
We came across many advertisements daily, while scrolling through social media; and many times these ads convince you to buy something you don’t even need. We have adapted and have been spoilt with all the choices available online.
India has a 636.77 million internet user base, it is the second largest internet user base in the world. Let’s see which Indian e-commerce websites are a hit and which ones are a miss.
How did the Online bookstore turn into India’s first-ever e-commerce website/app?
- In 2007, Sachin and Binny Bansal quit their jobs and decided to enter a market that most of India had never heard of: internet shopping. It started as an online bookstore. This small step was the start of a new era in e-commerce. After this, people didn’t have to step out of their houses to get their favorite books. Flipkart studied the Indian mind thoroughly and worked on a marketing strategy based on that study.
- Since Flipkart began innovating in 2007, Indian shopping behavior changed. However, the purchasing landscape in India was very different 10-12 years ago. Ten years ago, the majority of customers preferred to touch, see, and feel items before putting their hard-earned money into them, and they thought that something new, such as online shopping, deprived them of this sensory experience. Today, the same Indian clients will tell you a different narrative, and nearly all of them will talk about Flipkart.
What did Flipkart do differently to attract the market?
- After 3 years of establishing the brand and making consumers known of the online-shopping concept, they realized that people were not comfortable with transacting online and very few people had credit cards then. By considering this; they came up with COD (cash on delivery). This was a game-changer for the company.
- Their easy return policies, made people believe in e-commerce websites more.
- For customer satisfaction, they also came up with “Next day delivery”.
- Flipkart’s “Big Billion Day”, the largest shopping festival, was launched in 2014. It has massive deals and offers that you’ve never seen before. In the first year, they sold items worth $200 million in just three days.
- After their Big Billion Day sale, Flipkart surpassed Amazon in market share and rose to the top spot among Indian online retailers.
- In addition, they again came up with “Same day delivery”.
- They also came up with no-cost EMI or hidden taxes.
- In 2015, they launched their web app- Flipkart lite, which was World’s first & fastest app. It gave people the experience of using the app while browsing on the desktop.
- In 2016, they decided to get rid of their website and only sell through their mobile app. Flipkart’s mobile app was the first in India to reach 50 million downloads.
- Countless companies have been motivated to follow in Flipkart's footsteps. But in 2018 Global retail giant Walmart won a bidding war against Amazon and paid US$16 billion to buy a majority stake in Flipkart. This acquisition was the world’s largest e-commerce takeover.
- In 2019, with a new start, the company invested $4 million in a reward platform, EasyRewardz to boost customer engagement. Also came up with a “Flipkart video” direct face-off with Amazon prime video.
- In 2020 Flipkart partnered with Uber India to deliver everyday essential items in metro cities like Mumbai, Delhi, and Bengaluru amidst the COVID-19 national lockdown. This partnership enabled hundreds and thousands of Indians to stay at home and support breaking the chain.
In the past, Snapdeal was the public's second-best option after Flipkart, but Amazon's entry and rapid rise didn’t give snapdeal a chance to succeed. When Amazon made its entry into India in 2016 with a $3 billion investment, it made it obvious that it intended to dominate the industry and provide a significant challenge for domestic e-commerce companies, among whom Snapdeal grew quite dissatisfied and didn't keep up the tempo.
Where Snapdeal went wrong, and lost its way?
- Snapdeal never established any category as their USP, unlike Flipkart with fashion and electronics and Amazon with Prime and Pantry, as they were too busy constructing too many warehouses and ultimately burning money through that.
- Snapdeal also has partnerships with ClearTrip, redBus, Zomato, and UrbanClap for their respective businesses, however, none of them had any real impact.
- Their many acquisitions failed even though the investment was of a good amount. For logistics firm Gojavas, and for digital payments Freecharge.
- In its list of drawbacks, Snapdeal's omnichannel strategy's failure jumps out. Many experts said it may be a game changer for Snapdeal. In this strategy, Customers would be able to find products online and place orders with speedier, hyper-local fulfillment handled by offline stores.
- With its initial partnerships with Mobile Store, Shoppers Stop, etc., this concept had a lot of potentials. It may have provided Snapdeal a turnaround with effective implementation, but failed to make a splash due to strategic mismanagement.
- Later, talks were of Snapdeal merging with Flipkart, but the deal fell because the founders denied it. Then Snapdeal came up with Snapdeal 2.0, its revenue grew by 74% and the number of customers tripled to 27 million.
- Even after seeing the major fall down, Snapdeal is still surviving on this battlefield of e-commerce.
- Founded in 2010, the company’s revenue was INR 100 crore in 2021.
This e-commerce website is quite different from others. It has manufacturers, Sellers, and then consumers. Meesho serves the purpose of all three. A manufacturer lists their products on the app and the sellers can choose any product and sell it through social media platforms like Facebook, Whatsapp, or Instagram. This way consumers can buy products at a very reasonable price. The sellers work as the link between the manufacturer and the consumer. By this, the consumers get products with favorable deals, and the seller gets a commission of 10-15%.
How Meesho works?
Launched in 2015, this app connects manufacturers to resellers. Independent resellers can sell the products through social media. The process is as simple as sharing an Instagram photo of the item or writing a Facebook post to sell it. On the other hand, buyers can choose to pay with a debit/credit card or cash on delivery for a secure and speedy transaction. Clothing, accessories, furniture, culinary utensils, and cosmetics producers are among the suppliers who list their products on Meesho.
Meesho has 2 million resellers, with 20,000+ suppliers from more than 500 towns. They work on a commission of 10-15%, still selling at very affordable prices. They are not only an e-commerce app but an app where anybody can establish their business, with very little investment.
The Idea behind Launching Meesho in 2015 -
- Founders Sanjiv & Vidit wanted to start something like “Swiggy & Zomato” but related to fashion, so they named it FASHNEAR. It dealt with fashion-related products like clothing, footwear & accessories, which ultimately were sold from the local stores. These stores have to register themselves on the Fashnear app, and customers can order from these stores indirectly.
- But sooner, the founders detected some flaws in the app, like customers didn't want to buy from local stores & sellers wanted to increase their sales by selling products in different locations. To work on a better business model in 2015, they renamed “Fashnear” as “Meesho”.The founders visited manufacturers & resellers to know what problems they are facing and how Meesho can help them. So they decided to expand the business for those who are only selling the goods to the local community, and for those who were selling the goods through social media but could not get reach them.
Growth & strategies they used -
- Meesho has become India's largest reselling app.
- During its flagship, seasonal sale event, Maha Indian Shopping League, Meesho saw a 750% increase in users over the previous year i.e 2020.
- During the Maha Indian Shopping League, the firm had a 314% increase in merchant participation, resulting in a 10X increase in revenues over the previous year.
- It delivers now to 26000+ pin codes and across 4800+ cities in India.
- Meesho relaunched Farmiso as Meesho Superstore. This was done to focus on the customer demands of everyday needs in Tier 2 markets and beyond that.
- The company boasts of the fact that it has successfully managed to expand its grocery service to 6 states within 9 months.
- During covid, they started selling products that they have never sold before, face masks, sanitizers, etc.
Conclusion - We always see ups & downs in business. But standing through that time is what very few companies have accomplished. Brands should focus on giving customers what they need and should adapt to change as per the new technology.
If you have an e-commerce website or want to start one, these startup studies are some examples that will give you some insights. You can observe how they started their journey and where they are now and the different brand strategies that helped them achieve these numbers.
Need some more insights or guidance? You can always reach out to us at Perito - Find A Consultant. We have verified E-commerce consultants who can help you decide on what e-commerce website you should list your products and how e-commerce advertising is done etc. Download the app here https://play.google.com/store/apps/details?id=com.peritouser