E-commerce: where Davids and Goliaths are thriving together

Once, debates were about consumers moving online in a way that would prove detrimental to on-ground retail. Then concerns were over the small retailer being killed off by large e-commerce brands. But none of that has happened.

When it comes to online ventures specifically, there are younger e-commerce players attempting either to subvert the Amazon and Flipkart model or to partner with these Goliaths to fuel consumption in semi-urban India. Even the shorter to mid-term outcomes of such moves are interesting.

Although the giants are advancing, it isn’t without the help of online businesses such as FreeKaaMaal.com and Naaptol.com in India.

Affiliate marketing venture FreeKaaMaal.com offers consumers information on freebies, contest giveaways and discount coupons online. Some 80,000 members and nearly 5 lakh posts mean that the site enjoys more than 7.5 million page views in a month.

FreeKaaMaal.com helps generate more revenue for larger players.

Ravi Kumar, Founder of FreeKaaMaal.com, explains, “We figured this model would work because around September 2010 when we first started off there wasn’t a platform to announce group discounts and other such offerings from various e-commerce sites. We deliver sales of about ₹15-20 crore to our partners on an average. This is higher during periods like Diwali and in December. Our percentage cut is 20 per cent or less, though this depends on the product category.”

In spite of the clout that names like Amazon may hold in the ecosystem, ventures like Naaptol enable a range of sellers to reach their customers through its rapidly growing home shopping platform. Multiple touch points that include print, television, Internet and via direct marketing lead to Naaptol processing around 6,000 orders a day with an average price of ₹3,000 per transaction. The venture has been VC-funded twice since its inception in 2008. “Although Naaptol was started as a product search engine where comparisons were enabled, recovering of commissions became difficult. We now allow our registered sellers to sell their goods through us, and so we shifted to the marketplace model. Our average daily order has grown to 250 per cent of last year and profits have correspondingly gone up,” shares Manu Agarwal, Founder and CEO of Naaptol.

In New York, Ben Purkert’s venture CityShelf offers an “aggregated, smarter way to browse”. So if you’re a booklover, you can find books at bookstores closest to you, and you can still enjoy the experience of leafing through their pages.

“E-commerce players, like Amazon, have incredible economic advantages. The local NYC bookstore faces many challenges, not the least of which is rising rent. But small retailers offer a quality of experience that e-commerce can't replicate. In the case of bookstores, customers love the sense of the discovery… people feel good when they buy locally and support their local economy. CityShelf gives book lovers a more convenient way to do just that,” Purkert explains.

If as many marketers argue, the physical shopping experience cannot ever be replaced completely, can a similar model work for categories other than books? And would it fuel consumption in India’s semi-urban markets?

Notably, FreeKaaMaal.com’s Ravi Kumar reports his small retail partners bring him 15-20 per cent of his total revenue. “Adding Amazon.in last year got us a 30 per cent jump in revenues, and our partner list has crossed 500 in number. So yes, we’ve partnered with big names. But we want more small retailers on board. And we definitely want to go ‘mobile’ on a larger scale, especially because affiliate marketing is a growing sector in India. While e-commerce is thriving in India, its potential may be realised in the next few years through smaller retailers as well as through consumers in Tier-2 and Tier-3 cities.

Small e-commerce players are making that happen.