Online marketplaces have been seen playing a vital role in the growth of Ecommerce in India. Not only, they have encouraged sellers to come online but have also given a platform to reach a wide range of masses with variety of products on a single platform.
However, where a marketplace strategy may be a boon for some retailers it could be a bane for others. Low startup cost and free upfront traffic are two of the most significant advantages of using a marketplace to sell a product. But, the biggest drawback of using such sites is that one will need to pay a small fee to have their item listed and then will need to pay a percentage of each completed sale.
At iamWire’s Internet Retail Expo 2014, we had our experts from Infibeam, Snapdeal, Shopclues, etc. to understand the opportunities and challenges a marketplace provides to both the seller and the marketplace owner.
The panel included Neeru Sharma, Director, Infibeam; Tony Navin, VP, Snapdeal; Devesh Rai, Corporate VP, Shopclues (Moderator); Sunil Dhingra, Founder & CEO, Storeji; Umang Midha, Owner, Effects Industrial Concepts; Devesh Tanna, CEO, Vendee Enterprises and Murali Balan, CEO, Tenovia Solutions.
Devesh Rai kickstarted the session by portraying the growth marketplaces has taken in the last two years. He said that there were times when the question was, ‘What is a marketplace’, and today merchants ask ‘How can I sale more on marketplace’. This definitely is a huge change that has been witnessed in the last two years.
Adding to the conversation, Tony Navin revealed, how snapdeal as a marketplace has achieved success and have reached to a stage where they are predicting exiting this financial year with almost half a billion dollar sales. He also revealed that Snapdeal may bring four wheelers to its platform soon.
On being asked, how has Infibeam, till date resisted the evolution to be called as a ‘marketplace’, Neeru answered, “We wanted a lot of control on the supply chain and give our customers the best experience and get them to come back for more.”
Next question to the panel was, “What are the opportunities and challenges a seller is having on a marketplace?”. To this, Umang replied that every seller has his own challenges on a marketplace, depending upon what product he is selling and on which marketplace he is selling. Unless, one is handling the distribution on his own, he cannot survive on a marketplace.
“Also, marketplace offers the opportunity to go online and start selling instantaneously. But, there are challenges in having control over the processes, payment reconciliation, etc. But still, marketplace is the only model to go far as customer acquisition cost are too high,” said Devesh Tanna.
Tony further pointed out the expectations of a marketplace from the merchant. “Our expectation from the merchant are similar to what a consumer have from us. Quality of the product, Efficient shipping and delivery are however the 3 pillars we really follow.”
When asked about an ideal marketplace scenario, Sunil is of the view that as of now, all processes are focused on building a great experience for online consumers, however at the epicenter of marketplace exactly is a seller and that needs to be changed.
Devesh Rai, then turned the discussion to whether a marketplace should/ should not have its own sales tax registration. Also he said that there must be no COD and no same day delivery for marketplaces.
“As long as a marketplace is giving me business, I do not care. As long as I am getting on my website I am happy. I control the inventory, I can ship my products out on the same night as the order. Indian customer wants the products immediately. We are not into catalog purchasing. Set proper expectation for the customer, don’t promise what you can’t fulfill,” replied Devesh Tanna to the above question.
Murli Balan, further adding to the conversation, said that the next state of evolution is how can they fight the offline battles and not bring them on the online fore. “The next stage is to align themselves to the marketplaces. The marketplace revenues need to be maximized.”
Also, according to Umang Midha, “for the brand and sellers and business offline marketers coming online is not good.”
“Even from a seller’s end, they face a lot of problems communicating with the people from the website. If a marketplace expects a TAT for shipping, why don’t they have a TAT for replying to the queries of the sellers?” asked Devesh Tanna.
Sunil said that in specialist categories will see both verticals and horizontals expanding. He went on to say that there is a strong disconnect between seller and consumers in marketplaces except at eBay.
“How ready are the merchants today to sell on a marketplace?” To this, Devesh Tanna said, “The ecosystem in India is not really ready for Ecommerce and as a result, the seller is always taking the hit. Hence, we must make sure that the environment should be as favourable to the seller as it is to the consumer in a marketplace. The future of marketplaces is bright, and they are here to live long and get better.”