Economic Times, 12th January, 2016
For small merchants like Vimal Jain, a seller of Tupperware and henna products, ecommerce giants like Flipkart and Amazon can be quite daunting. Which is why small and mid-segment vendors like him are flocking to smaller online marketplaces such as Askme.com and m1-order, which are creating a new wave of neighbourhood commerce where margins aren’t squeezed too tight and the payments are quicker.
At large ecommerce stores, in addition to high commissions “we also see high returns (of products by buyers), get our payments late and sometimes we bear the brunt of logistics charges, too,” said Jain, who sells online through more than 20 retailers.”Smaller marketplaces are far more efficient.”
This is not to say that these stores present a threat to the giants.But these do offer small and independent merchants like Jain a more accessible alternative.
Neeraj Hutheesing, founder of M1-Order, a mobile marketplace for neighbourhood stores, says large companies typically expect merchants to offer discounts of 35-50% on their products and also charge them hefty commissions. “For instance, a restaurant chain that has tied up with (an online food delivery platform), selling biryani for Rs 150 will be asked to pass on 20% margin to the customer in addition to a 15% commission. The seller ends up with less than Rs 100 in his pocket,” he said.
M1-Order charges its more than 3,000 merchants a commission of Rs 5 per transaction. It mobile marketplace allows customers to also purchase from local stores by scanning quick response or QR codes printed on merchants’ brochures and catalogues.
Askme.com promises quick payments and fewer product returns by buyers. “Through our asset-light, hyper-local model, merchants are paid back within 48-72 ho urs,” said Manav Sethi, group chief marketing officer.
In addition to selling on such marketplaces, stores are also turning to ecommerce-focused firms like Store Hippo and Zepo to create their digital fronts.
Read the article on Economic Times Online Portal.