Anushruti Singh
E-commerce revolution has become a reality in India with its presence felt by people from all over the country. In tandem with the rise of smartphones, the number of online shoppers is increasing everyday. However, with smartphone penetration in the country estimated to reach 58 per cent by 2020, compared with 30 per cent in 2017, the journey of India e-commerce has just begun.
The top drivers why people shop online remain increased convenience, timely delivery and, to a great extent, necessity for a section of people. In the e-commerce ecosystem, SME merchants comprise the largest chunk of seller base in most of the online marketplaces. For instance, 90 per cent of the merchant base at ShopClues belongs to the SME segment.
SME Futures caught up with Radhika Ghai, co-founder and chief business officer of ShopClues, to know more about the e-commerce industry in India and where it is heading and how the SME sector can leverage it.
Is e-commerce in India still a necessity or has it moved up to convenience?
There’s no singular answer to that. But, convenience is the key factor, be it in urban, semi-urban or rural geographies. With assisted e-commerce, a person living in a rural area can opt to buy what is necessary from an online marketplace. It meets both the necessity and convenience criteria.
How do you see the role of SME merchant base in e-commerce in India? How big is this community?
The Indian MSME sector is one of the leading contributors to the economy in terms of employment generation, industrial output, exports, GDP share, etc. MSMEs contribute to around 28 per cent to country’s GDP, and this sector has emerged as the largest employment generator after agriculture. As per the latest government figures, there are over 6.33 crore MSMEs operating in India, of which micro-enterprises accounts for more than 99 per cent of the total estimated number of MSMEs, which operate in un-organised/unstructured space.
In the e-commerce ecosystem, SME merchants cover the largest chunk of seller base in most marketplaces. Ninety per cent of the merchant base at ShopClues belongs to the SME segment.
What are the biggest obstacles to growth SME merchants face in India? Are there concerted efforts to deal with the challenges?
SMEs generally confront problems of non-availability of adequate and timely credit at cost effective rates, technological obsolescence, infrastructural bottlenecks, high input costs, etc. Besides, when it comes to marketing, SMEs need to regularly offer greater value to their consumers, so as to improve their overall competitiveness. However, due to limited available resources, SMEs face the problem of higher prices and unfavourable terms and conditions imposed by the key partners, such as wholesale sellers, distributors, etc.
Reports suggest that SMEs which use the Internet and e-commerce have higher revenue, more profit and a broader customer base than those with no online presence. They are a key stakeholder towards the growth of the e-commerce sector. We understand that growth of SMEs or sellers will lead sectoral growth. Therefore, e-commerce entities such as ours are empowering SMEs through a stable technology platform on Internet, facilitating digital cataloguing, integration with payment providers, logistics management (storage of products, packaging, last mile delivery to customers, returns processing, tax calculations, refunds management) and customer service, all at low costs.
If India is to sustain its onward march of economic growth, the 50-million strong small and medium enterprises sector has to be empowered in a true sense!
At ShopClues, we believe that the emergence of India as an economic superpower will happen via economic inclusion of its masses. We believe that MSMEs will be prime movers of this digital and online economic revolution. In 2017, we launched SAARTHI, which was aimed at digital enabling and empowerment of SMEs in India by providing them enhanced market access and e-commerce-enabling experience. The programme aims to educate, train, digitally enable and financially support MSMEs, including artisans, craftsmen, weavers and others to participate in the digital economy. Through this initiative, we offer a variety of services to SMEs with an objective of preparing them for the ever-evolving digital environment.
ShopClues has partnerships with several governments and industry bodies, such as National Handloom Development Corporation, Cottage Emporium, FICCI-FLO, etc. to cater to SME development and capacity building. We have also partnered with Retailers Association’s Skill Council of India and the National Skill Development Council for skill development of our existing SME merchant base.
Where do you wish to see ShopClues as an e-commerce company in the next five years?
The year 2018 will be the watershed year in the history of ShopClues. In our focused path to profitability, we will ensure that we take the top slot in fashion and lifestyle category in terms of order volumes. We will be increasing our revenue from value-added merchant services, i.e. supply chain, marketing and merchandising, etc. This year we will have laser focus on bottom-line profitability, which means that we will optimise our fixed expenses, deploy more technology to further improve revenue per employee and restructure category infrastructure to align with fashion, rural and private marketplace businesses.
How is ShopClues vying to make its own space in a market dominated by Amazon and Flipkart?
The difference between us and others is that despite being a horizontal player, we are niche. We are very focused on a few categories, a different customer segment and a different merchant segment. I think we have executed to a point where the differentiation is very clear. This is the market that will continue to grow. We strongly believe that, for us, we want to be the shopping destination for next half a billion users that come online. And that is where we are focused.
As a woman entrepreneur, do you have any specific message for other women entrepreneurs?
Entrepreneurship is a challenging journey in itself, and all entrepreneurs wear their heart on their sleeves. Women face the same challenges as men do, plus some more. The main thing to remember is that there is no such thing as a work-life balance. Just focus on what you are doing and show up every day. When you are at home, don’t think about work, and vice versa. As long as you keep showing up, you are already winning 50 per cent of the battle.
