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Selling on marketplaces: blessing or a devil in disguise for small brands?

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posted on 23rd December 2014
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While growing up for most of us shopping meant stepping out of our homes and spending hours trotting between shops to find the right bet. As time passed by, there was intervention in the form of shopping malls! Suddenly, everything seemed so much more organized! We didn’t have to hobble between stores because everything became available under the same roof!

marketplace
image credit: Shutterstock

Retail giants like Reliance, BigBazaar, Pantaloons, and Shoppers’ Stop had invaded our lives. The idea of making almost everything accessible for the customer at one focal point was dangerously appealing. Shopping malls opened up rapidly in various parts of our country. However, despite the growth of shopping centers, their adoption by Indian consumers didn’t kick start as expected.

Gradually, the idea of shopping malls was replicated in the online world, and boom e-commerce penetrated the Indian market! E-commerce has been a game changer for the retail business. Today, all the leading e-commerce players like Flipkart, Snapdeal, Jabong, Myntra, and Shopclues, etc. have successfully forayed into our lives and made shopping available just a click away! Every third person that I know orders stuff online.

The rise of e-commerce players meant a gateway to success for less-established brands! E-commerce offers some really attractive benefits to small-scale brands.

Pros:

  • Free listing: The best part about e-commerce portals is that they charge the brand almost nothing to list themselves and showcase their product range. They foster commission based sales to make life more convenient for brands.
  • Increased visibility: Since e-commerce players attract tremendous traffic across geographical boundaries, they make a great platform for less established labels to propagate brand awareness and increase revenues. It is said that Amazon alone attracts nearly 85 million unique monthly visitors which is an astonishing number!  Imagine how those eyeballs can be easily converted into consumers resulting in higher sales. Attaining such a humongous reach without having to splurge on advertising or marketing is the cherry on the icing for a marketer.
  • Consumer acquisition: When people visit e-commerce sites, nine out of 10 times they are product focused than brand focused, and with the right product portfolio they may end up discovering you. Once a potential customer finds you and makes a purchase from your brand; half the battle is won! By providing an outstanding customer service and a magnificent user experience; you can multiply your chances of winning repeat business and strengthen customer trust and loyalty.
  • Improved visibility at minimal marketing cost: A strong presence across leading e-commerce portals helps smaller brands build awareness without having to spend on upgrading their own website.
  • Ease of selling: E-commerce players have exceptional order management. From the time a consumer shows interest in your product to the time the product is delivered to the consumer, everything is highly organized and well-processed. Moreover, they have collaborations with payment gateways for safer transactions and have trusted logistic partners which provide hassle free shipments! As a result, presence on e-commerce players helps less-established brands focus on their products instead of taking care of end-to-end services.
  • Sell here, sell there, sell everywhere: The internet is flocked with e-commerce players which gives smaller brands the opportunity to sell across multiple e-commerce players. This helps in ensuring greater reach and higher brand awareness!

E-commerce platforms have the right concoction of convenience, user-friendly interface, exemplary categories and design and a huge price range to choose from which makes them every consumers’ favorite destination! Looks like a win-win situation for less established right? Nope, that’s where the catch lies!

Like they say all good things come with something bad; selling on e-commerce players has its own drawbacks.

Cons:

  • Minimal consumer insight: I hate to burst the bubble but e-commerce players are not here to help brands, but to help themselves. Since they take care of the end-to-end services, they preserve data mining. Most of the e-commerce players save browsing history and collect e-mail ids/phone numbers of their users to analyse and understand their visitors better. These details are further used for real-time marketing, retargeting and promotional purposes. However, most of the players refrain from sharing this data with brands leaving them with minimal insight of their consumers.
  • Zero customization: Since brands are largely unaware of what their consumers exactly want, they fail to customize their products as per users needs. Had they known their consumers better, they could have successfully provided a tailored customer experience resulting in higher consumer satisfaction and loyalty.
  • You & your competition share the same frame: E-commerce portals are where you sit next to your competition. One of the biggest drawbacks of selling with online aggregators is that your products appear on the same page as your competitor, spoiling the consumers with choice, and further delaying their decision making process.
  • Limited branding and control: Once you start selling through e-commerce players, they have the authority to regulate the pricing and discounts for your products. Moreover, selling on e-commerce portals reduces branding options. Most of the time, the only thing that you have control over is your inventory and its description. Everything else has the e-commerce player’s branding. It may seem okay while you start out, however, once your brand grows, this may be a huge setback since standing out from other brands becomes a priority.

Albeit private labels benefit tremendously in terms of exposure and visibility with their presence on e-commerce, they also face some serious repercussions! This leaves us with some food for thought, ‘Are e-commerce players a boon or curse for less-established brands?’

About the author:

Rohan Dighe, Founder, ViralMint

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