Prominent retailers of the country seem to be on a roll when it comes to posting their quarterly numbers. While Future Lifestyle Fashion posted a nine fold jump in net profit, encouraging festival season sales saw, Shoppers Stop reporting a 71 per cent increase in net profit…
Again, a few startups are experimenting with providing a direct connect between the retailer and the customer through an app based service, where the customer gets to choose the local store of a marketplace platform and building a distribution ecosystem for 4G devices are on track and being rolled out in a phased manner. The fashion and lifestyle ecommerce initiative has been launched on an invitation-only basis. Reliance Retail now operates over 3,000 stores, becoming the first retailer in the country to reach this milestone, it said. The company had 3,043 stores across 371 cities in India as of December 31.
An app to connect retailer with the customer
A few startups are experimenting with providing a direct connect between the retailer and the customer. Through their apps, the customer gets to choose the local store from they want to buy. This model offers an alternative to BigBasket, PepperTap and Grofers that allow users little or no control over the source. Startups such as Goodbox and Lookup are attempting to make daily online shopping a more personalised experience, while also helping merchants acquire and retain smartphone-savvy customers. Chat options within apps allow customers to talk directly with specific neighbourhood retailers and order.
Startups are looking to facilitate routine payments as well, such as to the newspaper vendor or electricity bills. In effect, these startups are finding ways to run operations that aren’t capital intensive or heavily reliant on deep discounting to win customers the bugbear of most ecommerce firms by being more a facilitator than an aggregator or delivery service.
“Before, regular orders used to happen over the phone. But now it has evolved into an app, any service, be it a kirana store or local hotel, we are providing them an app presence,” said Abey Zachariah, cofounder of Goodbox in a media report. Through this personalised app the merchant can have complete control of the system. Goodbox has 50,000 users in Bengaluru, 70 per cent of who are repeat customers with an average transaction size of `600. Once the app garners a user’s location, it shows all the nearby stores for a user to purchase from. The platform is integrated with payment gateways.
Lookup, a chat messenger-based app, has 1.2-million downloads and is present in Bengaluru, Mumbai, Delhi and Pune with 85,000 merchants on board. “We do not promote discounts. Individual merchants can give discounts if they want to. (But the) merchants are not in it for discount sales, they only know unit economics and want to make some profit,” said Deepak Ravindran, founder of Lookup in the media report.
Snapbizz is working on a beta version of a customer-facing app called SnapOrder that will allow customers to chat directly with specific retailers. The business models of these startups are varied. From demanding a subscription or taking a cut on payments and charging for generating leads and providing visibility, these startups are attempting them all. According to startup data tracker Tracxn, at least two dozen such startups have been founded since 2014. But these firms still have to reach scale.
While companies like Grofers handle more than 30,000 orders a day, Lookup manages 300 a day and Goodbox says its top merchants do over 500 transactions a month each through its app. Industry experts feel that consumers are also looking for a range of stock-keeping units (or product lines) and it’s hard to get a 100 per cent fill-rate as you need a fully integrated supply chain for that.
FabFurnish to merge with BedBathMore
E-furniture store FabFurnish may soon announce a merger with online home decor firm BedBathMore to join forces to compete against rivals like Ratan Tata-backed Urban Ladder and PepperFry. The companies are in an advanced stage of discussion. The investors of both the companies are in agreement and will continue to be associated with the new merged entity.
Traditionally dominated by electronics and fashion, the Indian e-commerce segment is now seeing good traction across newer categories like furniture and wellness. While there are niche players like Pepperfry, Urban Ladder and Fab Furnish, other marketplaces like Flipkart, Snapdeal and Amazon have also forayed into the category. Industry analysts see a huge room for growth in the space as the $20 billion furniture market in India, which is largely unorganised, moves online.