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How to crack the online commerce market

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ONDC and Social Commerce are a game-changer for small businesses and D2C brands, especially in Tier 2 and 3 cities

NOTita* is 48 years old, fresh out of a bad marriage and sells stoles made by weavers near Calcutta for a small commission. She has been selling through WhatsApp groups and Facebook Live, but things haven’t been looking too good lately, with Facebook recently shutting down Live Shopping.

Kamini*, 28, put her banking career on hold to run a Shopify-based e-commerce store where she and her partner sell women’s activewear. Unfortunately, they have to spend a lot of money to get people to visit – and buy – on Shopify, and have realized that Amazon and Myntra offer a better return on investment. But they are not happy with the high commission percentage that e-commerce giants would charge.

Rajat* is the Marketing Director of a top five cookware company in India. A top e-commerce portal will get them a good deal, but want them to pay well beyond their budget. The company is not happy and wonders if social commerce is the way to go.

There’s a new breed of marketers in the house, and they’re not married to traditional large-format marketing and the big budgets that come with it. Their customers generally come from small towns or even towns. An unusually high percentage of them are women. Many of them are first-time entrepreneurs from modest backgrounds and don’t – can’t – have the family money to support them for the first few years.

I’ve been meeting them online and offline for a few years, and when they hear that I’m a digital guy, the question they quickly ask is, “How can I sell online effectively?” So here are some answers — or rather, tentative answers.

I don’t think anyone is able to give a single model solution. Digital is frankly too dynamic – the algorithms keep changing, for starters.

Hello, social commerce

In India, what works are close-knit communities that trust each other in silos. Within the silo are local cultural markers, deep social biases, unique shopping habits, and more. Now AFMS (Amazon Flipkart Myntra Snapdeal and others) of course doesn’t; the only two things they offer are deals and range.

Nita (see above) — who is probably too small for Amazon — is the perfect candidate for a social commerce platform like Meesho, Glance, Sim Sim, Glow Road, Shopsy, Deal Share, KIKO TV, Gogo Pogo. Among many others.

In fact, 80% of social commerce users are women in tier 2 and 3 cities and towns, who sell sometimes highly localized products through their personal social media logins or accounts (mainly WhatsApp, we assume).

And once 5G kicks in, Nita will find it easier to create better short videos that showcase her stole collections. She will also have the opportunity to create more interesting video stories, learning from the other “sisters”. Social commerce has shifted the balance of power from big business and brands to content creators and D2C brands. Kamini would do well to experiment with an AFMS and social commerce model.

Say hello to ONDC

The unusual name confused me: I thought it was ONGC, the energy PSU! The Open Network for Digital Commerce (ONDC) was launched in Bengaluru some time ago, and it looks like a giant killer, a very viable alternative to Amazon and other biggies, at least for small business owners. Although I understand that the biggies also want to participate.

The open network e-commerce platform, an initiative of the Department of Trade and Industry, will cost small retailers a fraction of what they pay e-commerce giants. The sweetener is that no company owns it, and even a small retailer will be visible on multiple platforms.

The time has come for Nita, Kamini and Rajat. To step forward and shine, and create a new India powered by 5G and Tier 2 and Tier 3 cities. As Monica Jasuja, a global fintech leader puts it, “what UPI has done for digital payments will be replicated for e-commerce by this trio – ONDC, 5G and social commerce”.

(* Names changed)

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