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If You Are In Online Retail, Do Not Ignore Non-Metros

Team YS
15th May 2012
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online_retail

Chances are good that as an entrepreneur you are looking at the online space to make your fortune, and why not, there is no better time than now to make money with an ecommerce venture in India. Billion dollar valuations, multiple funded ventures and overall encouraging sales numbers; the recipe is perfect.With over 120 million internet users and as many as 10 million of them transacting online, the opportunity for you is huge. I couldn't get a better sense of how deep the online retail buzz in India is, until my neighbor who is a manufacturer of textile utilities (B2B play) talks about setting up an online shop. The concept of buying and selling online is going mainstream and it is perhaps the right time to explore niches.

When I started selling online in 2002, the market was a lot different. There were no payment gateways, logistics was lot more difficult and internet penetration was low, however sales did happen. And you wonder who bought majority of the stuff? Tier II and Tier III cities. The logic for this was very simple back then and it remains the same now. For a metro buyer, the accessibility to quality stores offline and availability of technology products is lot easier than the Tier II / III cities. In fact we had several orders for low-end mobile phones from small towns in South India, Orissa and UP way back in 2005. It wasn't uncommon to receive cheques with long hand-written letters that bestowed us with trust and pleaded to send the product, as if they have little hope of actually receiving the product.

Any commerce is driven by value and the clear value that one can deliver is making available something that isn't easy to get in the local market. The demand exists, for these shoppers, online is at times the only medium. That’s exactly what is happening. eBay India today revealed that as many as 57% of its transactions for gadgets (smartphones, laptops, cameras and accessories) are coming from non-metros.

That’s a very useful insight for entrepreneurs. Figure the demand for accessories, mobile gadgets and other technology products in remote areas and make them available online. Internet and mobile have spread far, but traditional distribution channels for many product lines haven't. There is a gap to be explored!

There is a lot to be done, spend some time studying where logistics companies are shipping most of the products, plan your approach, talk to consumers and find the right products to sell. If you are in online retail, do not ignore the non-metros!

Author: Annkur P Agarwal has been an online retailer for the past 10 years, he founded OnlyGizmos in 2007 and is currently working on his shopping intelligence startup Price Baba. You can talk to him on twitter - @annkur.

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