Online Consumer-To-Consumer Marketplaces Can Close India’s Consumption Gap !

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Dhara Parekh, an IT engineer had always dreamt of a career that utilised her artistic vision and passion for the crafts. With limited business know-how however, she struggled to find buyers outside of her peer groups and colleagues. While it is a no-brainer that online selling platforms can potentially open up multiple avenues for passionate entrepreneurs like her; reality is that micro businesses in India often find themselves unequipped to navigate the entry level barriers to online Business to Consumer (B2C) marketplaces – be it around costs, technology or legal requirements. It is not a surprise then that of the estimated 50 million micro SMBs in India, currently a bare 0.1% have an online presence.

When compared to their global counterparts, Consumer to Consumer (C2C) marketplaces hold a curious position in the Indian context. Across the world, the evolution of marketplaces has been led by C2C platforms like Taobao; with B2C commerce platforms often playing catch-up. Yet, it is B2C commerce that has shaped the Indian e-commerce story.

Time is now ripe for unorganized C2C commerce to leapfrog into the digital era, as well. Multiple factors are simultaneously spurring this need – rapidly increasing numbers of mobile consumers, year-on-year improvement in mobile broadband quality and coverage, progressive government policies that focus on building widely accessible digital platforms (National Digital Literacy Mission, a proposed digital agri-marketplace for farmers to name a few), innovations in commerce technologies, and a growing entrepreneurial spirit among India’s youth.

By targeting the untapped “homeprenuer” or individual seller segment, online marketplaces that emulate C2C as a direct, free, open marketplace offer a tremendous potential for increasing the micro SMB’s share of India’s e-commerce pie; expected to be a USD 75 billion industry by 2020.

However, for online C2C commerce to truly take root in India, technology solutions will have to mimic existing physical shopping experiences, while offering enough of an incentive to initiate and sustain new online habits.

Most micro SMBs in India are cash-strapped, 1-5 member powerhouses, often managing all aspects of running a business singlehandedly. While they are looking to expand consumer outreach, they would like to do it at little to no additional financial and manpower cost. Ease of use is another factor.

If the technical competency required is more than what is needed to operate a smart phone, the solution may not stick. Users should be able to set up their shops, upload their products and build visibility, and manage customer interactions quickly, reliably, and on the go.

The Indian consumers’ fairly heterogeneous approach towards shopping includes a significant base which still prefers direct engagement with the sellers. The purchase decision for a variety of buyers depends on personal validation of the product quality and direct price negotiations.

A digital environment that is capable of replicating and enhancing offline experiences of direct engagement, while assuring outreach strengths of the online, will help address needs of this consumer base.

Related Read: Magento 1 Vs Magento 2: Which of the Duo Is Best For Building Online Marketplace !

Against this backdrop, Shopo’s online and mobile commerce model has been designed to give a structured operating platform to the unorganized marketplace. This is actualized online in a number of ways – a peer to peer chat system for barrier-less engagements between consumers and sellers along with the ability to see and buy products popular in one’s peer groups. Much like in B2C, payments and delivery mechanisms are an important and as yet unsolved piece of this puzzle.

A direct engagement model grows only on the back of consistent interface improvements between the two-ends of the consumption spectrum – the consumers and the sellers.  A critical piece in this engagement is the seller. Marketplaces play a critical role in helping a diverse range of sellers, with different business needs, optimize their commerce interactions, thereby addressing consumption gaps.

To help their sellers navigate these challenges, Shopo helps them identify the right logistics vendors for their unique needs, while building up our systems to enable a seamless payment experience.

Dhara Parekh’s story changed when she quit her full-time job to start her handicrafts business, she registered on Shopo almost 8 months ago and has had a wonderful experience. Dhara vouches by Shopo’s reach and receives orders every day. Today Dhara Art, her enterprise, sells briskly on Shopo and boasts of a truly eclectic and unique collection of home décor items and accessories.

According to industry estimates, India’s consumption GDP will be $2.5 trillion by 2021, of which, 10% will be online. With each successive digital adoptee, success stories like Dhara’s will play a definitive role in addressing this $250 billion consumption gap.

As more and more consumers become comfortable with transacting online, experiences like Dhara’s, hinged on seamless modes of exchange, solution-driven use cases and personalized transacting experiences will be the true shapers of habituation to commerce. Mobile driven C2C marketplaces can go a long way in connecting all these dots together.

(Disclaimer: This is a guest post submitted on Techstory by the mentioned authors.All the contents and images in the article have been provided to Techstory by the authors of the article. Techstory is not responsible or liable for any content in this article.)

About The Author:

captureSandeep Komaravelly is the Senior Vice President at Snapdeal’s business intiative – Shopo, a mobile based zero commission, open marketplace.

Prior to his current role, he was heading Marketing and Communications for Snapdeal and was responsible for all the brand and growth initiatives.  He has been a part of the leadership team at Snapdeal right from the beginning and was a key contributor to the growth of the business.