E-Commerce – Over or Just Started?
E-Commerce – Over or Just Started?
Everything that flies high is bound to come down sometime sooner or later, and if Jabong’s story is any proof, then the Indian e-commerce is on its journey down after gaining meteoritic rise.
Jabong’s distressing valuation slide from $1 billion two years ago to just $70m this year, is shocking to say the least.
However, the new entrants are cautious, but seem largely unaffected by the paradox and are quietly carving a space for themselves.
The answer lies in the famous saying of Coco Chanel —“in order to be irreplaceable one must always be different.”
The new Indian fashion start-ups are doing exactly, that. They have not only armed themselves with their own unique concepts, but have also done what all should have done before- focus on their Indian-ness.
While some like Secret Dresser are selling one-time worn high-end designer wear, others such as Swish List and Flyrobe, are opting to offer them on rent, resulting in making luxury more accessible to ordinary people, a move that has been well-accepted, especially among the youth.
Defining the distinction between her brand, and the established retailers, Dimple Mirchandani, founder of Secret Dresser, says, “The model of established retailers is not profit-making, but numbers. They are just facilitating and mediating between buyers and sellers. We on the other hand follow a completely different model, where profit is an integral part, and we hold no inventories, and we are operationally lean.”
Affordable with the word go
By putting forward concepts like ‘luxury on rent’ and ‘second-hand’ selling, these start-ups have tackled two biggest issues faced by many of the established e-tailers – curbing the Indian consumer’s bargaining culture, and offering reasonable price for luxury.
Another factor, which heavily burdens the e-tailers is exorbitant amounts spent on promotions, and running marketing campaigns to attract the customers, and garner numbers. The newbies on the other hand spend less on such marketing stints and focus more on word- to-word promotion, and social media.
Investors more interested in new ones rather than old ones
The mounting losses of several big e-commerce players have just ended up making investors a little vary of the entire e-commerce business model.
While some are choosing to withdraw completely from India, the best examples are Rocket Internet, and AB Kinnevik. Both these companies sold off their furniture brand- Fabfurnish to Future retail, and then the much-famed Jabong to Flipkart run Myntra, and now are desperately trying to find a suitable suitor for their remaining food entity – FoodPanda.
The relatively new e-commerce companies like Voonik and Shopwati have learnt their lesson, and decided not to commit the same mistake. While Voonik raised around $20 million this year in Series B funding, led by Sequoia Capital, Shopwati raised an amount of undisclosed seed funding in June and Pretr, while India’s first omnichannel fashion marketplace has also managed to build investor curiosity. The company’s model of collaborating with existing companies and not competing with them has clearly helped it shape up a promising future.
Differential marketing clearly seems to be the ‘it’ way to survive in the e-commerce stage, and with Flipkart gaining control over at least 70% of the trade, other companies like Limeroad, Voonik and Koovs too have to come up with something unique in order to survive. However, with the stage set for Alibaba and Amazon we can only sit back and see what change it is going to bring, but what is certain is that the online market is nowhere close to its end, in fact it is just a start of a new beginning!