Zig when everyone else Zags. Some thoughts on eCommerce in India

I dont buy into the prevailing wisdom that eCommerce in India is dying (dead). For venture investors the eCommerce category might be “been there, done that”, but smart entrepreneurs always see opportunity in being contrarian.

There are some very interesting eCommerce companies doing good work (growing revenues, making margin and excelling in service)  in India. While the mainstream companies are spending money on advertising, acquiring customers expensively and offering deep discounts, many niche sites are building their reputations with an excessive focus on service and unique (relatively) products.

While there are 1.4 million Internet retailers in the US, there are about 2000 in India (ones that are doing more than 5 transactions daily). Most of the smaller ones that are doing a good job in the US are focused on either niche segments or markets. That I believe is a key trick that most niche eCommerce sites in India are executing the best on.

I wanted to highlight a few that I consider are doing a good job.

1. Shopo: I wanted to invest in this company before they took a seed round from a few investors. They are a good example of focus on fairly unique products and a good team executing well.

2. Allthingscustomized Another fairly crowded market, but the marketing techniques have been tweaked to make a margin on every customer order in this very competitive market segment.

3. Greendust: Looks and feels like yet another ecommerce site, but sells refurbished goods, with a good markup.

If you have an eCommerce site and are doing well, your best strategy is to keep your head down, focus on metrics and operations and ignore all the news and pundit’s opinions.

Zig, when everyone else Zags.

Advertisements

3 thoughts on “Zig when everyone else Zags. Some thoughts on eCommerce in India”

  1. As usually great piece from you Mukund. To add up bit more spice to your points, We have seen most companies creating innovation in selling. But hardly any company focusing on Value creation to the customer. Which makes them stick to the brand for a longer time. We realized it off-late 🙂

  2. Mukund – Not sure what your point is – I assume you wish to state that there is no ecommerce bubble and some businesses are doing things differently. But from examples given, Greendust seems to be odd. It has been in business for 4 years now, and has taken multiple rounds of funding from Mumbai Angels, Reliance and KPCB. It is doing well, but ecommerce is just a small part of its overall strategy (which is largely focused on refurbishing electronic “seconds”) and its a big offline business. Another one along the same lines is Canvera – which is another differentiated model (offline sales and online tools for fulfillment) and they sell to wedding photographers all across India. In my opinion, hybrid is the way to go for India (online+offline combination) else we will keep burning VC money on silly Facebook likes and Google CPMs!

    1. Amit, my point is there are many in the VC and investment community who believe eCommerce is dead or a bubble. There are however according to me many companies doing an excellent job of staying away from the mainstream and building good businesses. As an entrepreneur you can do well without listening to the VC crowd. That’s exactly what my post outlines.

Comments are closed.