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Fashion E-commerce Start-ups: Challenges in the Indian scenario

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With the growth of the Internet over the past few years, the e-commerce sector has seen a major shift in strategies and developments. With a share of 4 to 5 percent in the total retail sales of country, the Indian e-commerce market is the second largest market in the world after the USA. Not just this, it is also increasing at a steady rate of 10 to 15 percent.
With a change in the economy and education scenario over the past few decade, the standard of living of the urban masses and their aspirations have seen a major shift. The advent of the Internet has only made it easier by making the world available to them on their smartphones. This, in turn, has eased people into the idea of shopping online which is now gradually trickling down to the non-urban population as well. Good news for all, but, definitely challenging for the new entrants in the sector as the market becomes more and more competitive.
Challenges Faced as a New Entrant
The main issue that we have faced so far has been reconciling with buyers and suppliers which requires an exhaustive computation before one can assess their GST. There’s a lot of back and forth involved to get the books of accounts in place for all the parties involved. The entire process is tedious, and a huge chunk of time and effort goes into this when you are a start-up. This, in the long run, means the time and attention spent on the development of the actual product or service gets compromised.
In this fast growing e-commerce market, we compete with infinite brands each day, offering same products and service as us. We can’t look at them and say we’ll be do it better. The only key to success is an innovative strategy – how can things be done differently. Balancing the key factors to attain profitability is the sternest challenge for us. Increasing sales is definitely one way to grow the business but finding ways to cut inventory cost, improve marketing efficiency, reduce shipping costs and control order return can potentially prove to be discouraging at times.
The e-commerce space witnesses technological developments routinely. While this elevates the shopping experience and empowers the consumers, it places pressure on startups like us to not have any technical issue while running an online store. All of it requires the deployment of manual resources and cannot just be solved through cloud services alone.
Branding and Start-Up Challenges
The first and foremost challenge for any new entrant in the market is attaining customer’s trust, especially when you are in the e-commerce sphere. With so many competitors already present and more and more entrants coming into the market almost everyday, gaining visibility is increasingly becoming an uphill task. Identifying a niche and working actively towards it helps largely. It’s easier and more practical to start from a niche and expand than the other way around.
The second thing that is a major challenge is gaining a potential customer’s trust and establishing credibility. When the customer can’t touch or feel your product, it’s rather difficult to convince them of its quality, which in our case, is the USP.
Logistics and payment gateways charge high commissions which ultimately influences the price of the product. The logistics of Cash on Delivery as a service is another problem that is often faced by e-commerce setups. Last but not the least, as per our law, the customer can reject or deny an order just in case he changes his mind. These increase return rates and overall costs and are most common for COD orders.
Being not so familiar with the complex arena of the ever growing digital space, we try to have a brainstorming session daily to plan and execute creative initiatives and new capacities. Building a digital strategy to adjust marketing focus from brand and services/products to the end customer is something that we always try to inculcate in our system.
Implementation of well-established payment platform and consumer authentication was another big hurdle we experienced. Digitisation comes with fraud and cyber risks which can easily target companies to be a victim of malware. Be it the data theft or malicious customer targeting brands, we ensure extra attention to try and be safe from these malicious activities. They are a threat not only in terms of time consumption and financial losses, but also in terms of market credibility.
Getting customer support oriented resources is one of the most challenging parts for any start-up. Reassuring customers of a situation to keep them from hitting the panic button and coming up with negative feedback on social media is something that start-up have to aim for. Customers come first and everything we do has to be as per their needs and convenience. There will be difficult situations that one may face with a few customers but taking them as lessons is the best way forward.
Impact of New FDI and DIPP
There’s ease of doing business for start-ups with the new policies in place. The process to register a new company is fairly easy which makes the initial phase a bit easier. One can focus on the company versus all the legalisations, etc., at this point which really helps when you are a small company.
As an impact, the leading online marketplaces in India today, are partnering up with local players instead of foreign players. These new government initiatives, eventually, will force foreign players to locally host data in India thus increasing accessibility and traceability. This in turn might eventually impact how accountable they can be held for their activities and transactions in the country.
Visit any shopping mall and you’ll find people who enjoy window shopping and eventually order clothes from online platforms that offer more lucrative discounts. To create a level playing field between offline and online retail, new FDI draft prohibits e-commerce entities to influence the sale price directly or indirectly. Also, the circular does not allow the seller to sell more than 25 percent of its products on its platform. Hence, it compels the brand to be listed on at least four or more marketplaces to successfully run the business.
Surviving in the cutthroat e-commerce competition, which is no less than war, requires some outstanding strategies. Having a sense of purpose and sticking to it is the key. To achieve desirable growth, attracting the right talent and having the right leader plays a huge role. Customers will always expect fast, personal service and one must try to keep this in mind at all times. One needs to invest in creating an experience that competitors can’t provide to reap the rewards accordingly. Picking out a niche and working to fulfil its needs is the best way to penetrate the market, and once trust is established, there’s no better way of marketing than word of mouth or recommendations by existing customers. The same gets eventually translated to social media and product review pages where new users get to see how other people have liked or interacted with a brand so far and make their choice accordingly.
The masses, in today’s times, really rive how others around them make purchasing decisions. And with the influx of the influencer tide, it’s increasing by the day. So, all in all, it’s important to stick to one’s ideology and aesthetic and work towards spreading a linear message that your niche will resonate with.

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