With the conspicuous rise in the number of Indian internet users from 5 million in 2000 to an astonishing 200 million in 2014, the growing acceptability of online payments, the proliferation of internet-enabled devices and favorable demographics, the online retail sector has witnessed an exponential growth over the last half a decade. As per Gartner, the market will reach $6 billion in 2015 which means, a 70 % increase over 2014 revenue of $3.5 .
Further, according to Google’s Annual Online Shopping Growth Trends Report, the eCommerce consumer base in India would take a leap from 35 million in 2014 to 100 million in 2016.
Couponing and Discounting Paving their Way
Apart from the aforementioned macro factors propelling the boom in this sector, and the convenience of ordering products, Couponing, Discounting, Deals and Cashbacks are the major drawcards of eCommerce. They render astounding price-offs on products and services offered in the digital market. “They slash down the cost of products to stunning lows, making shopping online far more financially viable than purchasing from brick and mortar establishments,” maintains Vikash Khetan, Founder CouponzGuru.com.
In a post published in the Financial Express, Khetan stated that in 2011, 1 in every 10 internet users accessed coupons sites, but in 2013 this number had grown to 5 out of 6. Adding further, he maintained, 95% buyers search for deals online, and 74% view the coupons available at couponing portals. The coupon business is 13.5% of the total eCommerce in India, growing at the rate of 62.9 per cent with 7.6 million unique users a month.
Similarly, Cashkaro said, its sales have gone up 500% in one year.
What about the Offline Market?
Despite a commendable growth rate, eCommerce in India is still at an embryonic stage, comprising of only around 1% of the total retail industry.
With the emergence of newer players at an accelerating rate, the Indian retail industry has presently evolved as one of the most dynamic, diverse and fast paced industries in the world, standing today as the fifth largest global retail destination. It accounts for over 10%of the country’s GDP.
As per a report by India Brand Equity Foundation, the country’s retail market is expected to double to $1 trillion by 2020 from $600 billion in 2015. While the overall retail market will grow at 12%per annum, modern trade will grow twice as fast at 20% per annum, and traditional trade at 10%.
Referring to these stats, Sameer Parwani, CEO CouponDunia said, “the sheer size of this market, coupled with the threat from new age eTailers will make deals and couponing amongst offline retailers and modern trade outlets a really big piece in the near future.”
Adding further, Parwani stated, CouponDunia, which has recently expanded its domain and also become an exclusive offline FnB discount deals aggregator, is going to be one of the players that spearheads this with its listing of more than 5000 restaurant coupons across India and its soon-to-be-launched coupons in the Retail and the FMCG segments as well.
“The rising popularity of online marketplaces like Flipkart, Amazon, Snapdeal, Jabong etc. thanks to the discounts offered have made their offline counterparts sit up and take action. In order to arrest this slide brick-and-mortar retailers are playing with their pricing, and innovating like never before. With online sales currently being placed at 1 – 2% of the total Retail sales, deals/discounts when executed efficiently will play a huge role in driving incremental offline sales as well as it has done in the online retail space.”
With technology snowballing and advancing to higher levels, the scope for these players has been rendered wide open.
The development of Geofencing, a location-based service (LBS) that sends messages to smartphone users who enters a defined geographic area and iBeacon– “a new class of low-powered, low-cost transmitters that can notify nearby iOS 7 or 8 devices of their presence” (as defined by Apple Inc.) has led to the emergence of a new buzzword- ‘Hyperlocal’.
Parwani believes, Hyperlocal deals will be the way forward and CouponDunia has recognized this opportunity.
Further, the surge of Hyperlocal has opened a window of opportunities for players like Niffler, a hyperlocal discovery platform that aggregates offline deals.The company was launched in July 2014 with a vision to cater to the information bankruptcy amongst consumers regarding the offers running at the brick and mortar stores in their locality.
Edul Patel, CoFounder Niffler states, “most of the daily deals sites push on deep discounts which more often than not results in stores giving poor service to users. On the retailer’s front, there is a limited scope for stores to target and reach out to users in their vicinity. Thus, there occurs a communication gap between the sellers and the buyers regarding new products/offers/promotions. Even Print, Social and online medium fail to work optimally in this area. Therefore, the most considerable method adopted by stores these days is distribution of pamphlets, a process that Niffler aims to replace with personalization.” Adding further, he maintained, “on Niffler, we see close to 40% of our users coming back to the app on a weekly basis browsing and saving offers not only from the 350 odd stores we have exclusive tieups with, but also across roughly 70000 stores from where we list nearly 8000 offers across the 6 cities that we are present in.
Over time we look to expand the scope from just deals to a lot of other information to make Niffler the a sole platform that stores can use to interact/reach out to the right set of users and vice versa.”
Recently, Gurgaon-based GoldVIP Technology solutions which runs the hyperlocal app Crown-it raised $5.5 million in funds from Accel Partners and Helion Venture Partners. Sameer Grover, Founder and CEO asserted, “We charge merchants on the business we actually give them…We help users discover and experience places which are relevant to them and around them, besides getting rewarded for visiting those merchants.We give merchants a measurable RoI (return on investment) marketing channel and charge them on the business we actually give them.”
Hyperlocal has transcended Affiliates in a sense, it not only enables easy discovery of deals and discounts but also helps consumers discover retailers in their locality. Brick and mortar retail stores and services were feeling a loss against their online counterparts enjoying easy discoverability, and driving impulse purchases through lucrative deals. Through such startups and apps, which are acting like a bridge between digital consumers and traditional retailers, the differentiation between online and offline businesses might get blurred soon.