How India’s small ecommerce companies survive and thrive amid the Alibabas and Amazons

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• The ongoing digital transformation in India is expected to push up India’s total internet user base to 829 million by 2021 from 560.01 million as of September 2018.
• The Indian e-commerce market is expected to grow to US$ 200 billion by 2026 from US $38.5 billion as of 2017.
• India’s internet economy is expected to double from US$125 billion as of April 2017 to US$ 250 billion by 2020, majorly backed by ecommerce
• The E-commerce industry in India witnessed 21 private equity and venture capital deals worth US$ 2.1 billion in 2017 and 40 deals worth US$ 1,129 million in the first half of 2018.

These statistics and growth prospects shared by the India Brand Equity Foundation are an indication of the promise, potential and growth of the Indian e-commerce sector. While a lot of this growth is driven by big e-commerce companies like Amazon, Flipkart and others, there are innumerable small e-commerce platforms who are contributing to the upward growth trajectory.

Often based in smaller cities and towns, these small e-commerce companies do not come with deep penetration or the growth numbers of the bigger players. But collectively, this new breed of smaller e-commerce companies have had a cascading effect on micro, small & medium enterprises (MSMEs) by opening up access to a large market.

Here are three such entrepreneurs of small e-commerce platforms sharing their journeys and how they found a key market gap that isn’t being fulfilled by the larger players, which helped them survive and thrive.

Meenakshi Hiwase, ArtoGift

Hailing from the small town of Dr Ambedkar Nagar in Madhya Pradesh’s Indore district, Meenakshi Hiwase began working as a marketing professional after completing her MBA. But two years into the 9 to 5 job, she wanted to venture out on her own. “Being an art enthusiast, I decided to work on a platform where Indian artists can sell their artworks and crafts without having to bargain.”

After setting up ArtoGift in 2018 along with her husband, Meenakshi’s initial challenge was finding artists to collaborate with. “This was in fact the hardest part, as not many artists were ready to share their artwork and rightly so for the fear of violation of their designs and artwork. It took me almost a year and conversations with more than 500 artists to offer customers products such as handmade Kalamkari fabric jewellery, jute pouches, decoupage homeware, clay jewellery, among others.” Today, ArtoGift also offers customisation facility to its users.

With just two members in the team, Meenakshi oversees a range of responsibilities, from managing the product portfolio to curating them and listing them on the e-commerce platform to co-ordinating with the artist and the consumer until delivery.

As a young early-stage startup that is beginning to build a stronger presence in the market, the challenge for Artogift is more to do with expanding its reach rather than dealing with competition. Meenakshi says, “Today, if your product is good, you definitely don’t have to worry about consumers. While there are bigger market places and innumerable smaller marketplaces, I believe there’s room for everyone to thrive. The catch is in reaching out to customers and identifying who and where they are. Initially, we had customers mostly from metros purchasing from our platform. Today, we see a lot of traction from Tier 2 cities. We are trying to maximise on that traction through digital channels, as today most of them have access to smartphones and are present on popular social media platforms like Facebook.”

So far Meenakshi has catalysed the Artogift’s growth through the online medium, but she also plans to experiment with offline channels like exhibitions. Being a first-time entrepreneur from a small town, Meenakshi is keen on networking with other women entrepreneurs and using their learnings to help her navigate the ups and downs of her entrepreneurial journey.

“That’s why I am glad about SheLeadsTech. Among other things, the programme helps you connect and network with women entrepreneurs, who share their stories, their journeys, their learnings, all of which are of great help, especially when you are an entrepreneur from a small town and a first-time entrepreneur at that.”

SheLeadsTech is an initiative by Facebook that focuses on helping women entrepreneurs and women-founded startups go further in their startup journey by providing access to mentors, connecting them to fellow entrepreneurs and giving them access to tools, technologies and knowledge.

Vidya Swaminathan, Mystic Collections

After doing a Bachelors in Information Technology and Management, Post-Graduation in Marketing and Strategy and also an advanced programme in Strategic Management from IIM Calcutta, Vidya Swaminathan worked across various key roles in corporates such as HDFC Bank and the Aditya Birla Group, among others. But, a desire to pursue her entrepreneurial dream saw her leaving the corporate world in 2015. “Initially my family was worried that I was getting into an unknown territory since no one in the family had ever run a business of their own. But, that didn’t stop them from supporting me unconditionally.”

She started Mystic Collections as an online store for fashion jewellery. “I was always appreciated and applauded for my choice of jewellery and accessories. And I enjoyed the process. So, the entrepreneurial venture gave me the outlet to capitalise on this talent.” According to Vidya, she also saw a good product-market fit. “The fashion jewellery segment has a very huge target audience across the globe, as this product is used on a daily basis and not reserved for special occasions. Not everyone today invests in precious jewellery very often. But, the inverse is true for fashion jewellery. The fashion accessories market is expected to reach $7.5 billion by 2020 with the jewellery segment taking 50 percent of the market share.”

To kickstart her business, she invested a small amount of her savings and ran the business on a pilot basis for about a year. “I wanted to convince myself that I was on the right track.” After receiving a positive response from the market, she got the much-needed confidence to go full throttle. Today, Mystic Collections has a clientele of 10k+ customers, 30 percent of whom are returning customers. “Our biggest markets are mainly metros in India. We now have a good penetration in Tier 2 cities as well. Tier 3 cities are very small in our total customer base currently.” While Mystic Collections offers 100 percent private label jewellery, it specialises in temple jewellery and Bharatanatyam dance jewellery. Vidya says, “Having established a firm footing in the market, we are now working on expanding our product categories and range. We are also planning to launch a customisation unit for designing jewellery based on customer needs and the team just launched their flagship store in Chennai.” The five-member team is also working on international market penetration and widening the revenue stream through selective market place listing, and targeted marketing on online and offline channels.”

And, having recently joined the SheLeadsTech community, she says she got access to help. “I registered for an advanced training on Facebook Ads which has helped to fine tune our online marketing efforts.” In addition to access to relevant informative training programmes and informative sessions, “The programme has opened doors to connect with numerous other enterprising women doing superbly well across sectors,” says Vidya.

Karthika Reddy, taazataaza

After completing her Bachelors in Engineering, taking up a high-paid IT job would have been the obvious choice. But, Karthika Reddy’s quest to learn saw her dabbling in 3D graphics and web development. Today, she is the co-founder of taazataaza, a B2B2C e-commerce marketplace, which she started along with her husband in 2016. How she ventured into entrepreneurship, makes for an interesting story. “Unable to find footwear made of vetiver, that I had shopped for online earlier, we realised that there was an opportunity for a marketplace that offered only exclusive products, not found elsewhere. That thought evolved through conversations for the next two years and we decided there was an opportunity for a ‘prosumer’ marketplace.”

Today, Hubli-based taazataaza serves as a common platform where small-time makers and large-scale manufacturers can sell their products directly to wholesalers, retailers and end customers. taazataaza sells everything, from traditional Ilkal sarees, candies, indoor plants, books and jewellery to puja items. “We see taazataaza.com as more than just another marketplace. We offer both producers and consumers technologies to actively engage for better fulfilment. We are building it as a prosumer marketplace. All our processes are flexible, transparent, and constantly evolving enabling our vendors to enhance their product portfolio and help customers make informed purchases.”

The entrepreneur believes that while they do compete with the likes of Amazon, Flipkart and other large e-commerce platforms, “The fact that the big marketplaces today own and promote their own private label can be disadvantageous to smaller manufacturers and distributers. This is where we believe a marketplace like taazataaza ads value and stands apart. While we don’t have the deep penetration or pockets like them, what we do have is a model that supports and meets the growth needs of the smaller businesses. Today, small businesses are seeing the value and transparency we offer and helping us grow.”

As an entrepreneur of a startup based in a non-metro, the entrepreneur says it has both advantages and disadvantages.

Primary advantages include lower operational costs, bigger spaces and a lower burn rate. “Also, I am able to run the business from the ground floor of my own home to help me manage the needs of being a mother of two young kids and an entrepreneur of a growing business. We plan to continue to run from here until we reach a certain stage where expansion becomes obvious. Moreover, taazataaza.com is an online marketplace with a pan-India vendor and customer presence, So the whole point was about online and not offline.” The disadvantage mostly refers to the lack of exposure, which she tackles by being part of a number of startup programmes and platforms. One such is SheLeadsTech. “SheLeadsTech is one of the best initiatives for women entrepreneurs out here in India. Getting curious about an ad on Facebook about the SheLeadsTech programme and applying for it was one of the best decisions I have taken so far. The programme has helped us gain more visibility and access to many more resources. And the peer community is fantastic.”

Talking about a key takeaway from the programme she says, “One thing I have learnt by being part of the community is to share my story, my learnings and my insights. There might be someone out there who will benefit from it, like I did when I initially become part of the community.”

Watch this video to see how the SheLeadsTech programme supports women entrepreneurs building startups in India.