5 winning tips to scale online marketplaces in India

Starting a two-sided marketplace is becoming incredibly challenging with the growing competition in India. We have marketplaces like Quikr, OLX, eBay, Snapdeal and now Flipkart and Amazon also going the marketplace way here in India. Most marketplaces face the ‘chicken-and-egg’ problem while scaling as interactions between buyers and sellers increase. Less buyers - more sellers or more buyers - less sellers is a classic economics example of supply and demand.

Growing mobile user-base is definitely helping marketplaces gain users, which also highlights the fact that localisation is becoming a prime differentiator. Avnish Bajaj, who sold his online marketplace - Baazee.com to eBay and later invested in Quikr as part of Matrix Partners India, believes localisation along with local language support is going to be a game-changer for consumer products in India.

To help marketplaces scale in India, here are a few takeaways from an interaction with Avnish:

1. Quality first: Listings grow fast but the quality of listings goes down as the marketplace scales up. As the quality of listings goes down, users don't find relevant listings and end up moving out from the marketplace. This experience needs to be refined and made hassle free. Focus on quality, metrics shall fall in place.
2. Mobile-first: Not just marketplaces but all consumer web products should focus on mobile. Increasingly, mobile is replacing traditional desktops and laptops for content consumption and discovery on the web. Startups can’t afford to ignore this mobile wave in India especially when it comes to commerce and marketplaces.
3. Go local: For a user, it’s very important for the listings to be as close as possible. As a user, you won’t want to buy something which you can’t preview before buying. Local listings also speed the delivery time which is a big asset for successful transactions. Local listings helps the logistics part too, the extra cost spent on transportation is reduced considerably.
4. Support local languages: Indian audience with English as the primary language is reaching its peak; this number won’t increase much over time. But there is a wide user-base in India which still relies on their local language. As this audience gains Internet access, providing content and classifieds to them in local languages becomes increasingly relevant.
5. Focus on ‘one side’ of the marketplace: It’s always a big problem for marketplaces to solve the chicken-and-egg problem of focusing on buyers or sellers first. This confusion consumes a lot of resources at the marketplace’s side. Instead of worrying, marketplaces should focus on ‘one-side’ of it and the next side will automatically align itself. If a good number of buyers join the marketplace, you will definitely get customers.

Are you aware of any more tips to seed marketplaces successfully in India? Let us know in your comments.