I attended Flipkart’s top level Men’s Clothing Seller’s Meet yesterday.
Flipkart’s business has suffered a major hit, sales have come down to as low as 20-30% [in clothing, rest categories are also down, can’t say the exact %]
Some important takeaways:
* 4.2 Lac styles are live on Flipkart but just 10k styles are contributing to 80% of the sales, while the rest is just piling up the junk with very high return rates
(For someone planning to start eCom, you can start with less styles, but ensure that those products are selling good, I am working with an eCom client as a Digital Marketing consultant and I just push those products which are selling good because the ultimate goal is revenue, not even distribution of revenue from all products)
* Return rates are business killers for eCom, because that takes away the margin from the product. Now there are sellers with return rates as high as 35-40%, and there are sellers with return rates as low as 10%. Flipkart makes policies which is applicable to all sellers, to compensate its loss of returns. Flipkart has announced new higher penalty for returns, applicable to all sellers. So because of the junk sellers, the good sellers are also facing the penalty.
* Just 2% top sellers are contributing major revenue for Flipkart, which means they need to clear the junk sellers ASAP, or they will soon follow the path of Snapdeal
(Snapdeal was earlier promoting that they have the highest number of sellers, and that is one of the major reasons why they are out of business now, junk sellers selling junk products. Most of the fashion retailers I met yesterday have stopped selling on Snapdeal)
* eCom business is largely a game of logistics, manage that properly, more chances of winning. There are business models which are doing far far better with the logic ‘Product Free + Only Shipping charges‘
[And few of my friends in this circuit told me about activities of Rakuten in India. Rakuten have always been the last mover in any market they go to. Who would want to leave Indian market?]
Some other insights were discussed, but the most important thing right now is Amazon has just announced more investment of 20,000 crores in Indian market.
Amazon hammering at the right time 😉
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Amit Shroff
Saurabh Bhatnagar, I totally agree with your. You should have quality products and quality seller. Just having most number of seller will not bring more business, but having good quality seller with good quality product so that returns are low would definitely make difference.
I remember ordering few garments from Myntra & Jobong. The experience was pathetic same was the quality of product. Additionally they refused to give the warranty, hence now, I have stopped buying apparels online, specially from sites like Myntra & Jobong. I some how feel Amazon have far better service compare to others.
But there are quality issues with Amazon too, hence in order to reduce loss, they will have to check the product quality.
Saurabh Bhatnagar
My personal experience with Flipkart has been good.
But yes, Jeff Bezos is known for high customer satisfaction.
But the problem still is,
eCom in India is still driven by Discounts, that’s not a Winning model.
Western market has developed , and people buy there to save time rather than anything else.
Let’s see how the Indian eCom story unfolds in future.
asha chaudhry
hey saurabh,
thanks for sharing these insights.
quick q – which city was this event held in?
Amit Shroff
Hey Saurabh,
Yes I agree that currently eCommerce is primarily driven by discount. But there are exception as well. Like we have been running https://www.printawallpaper.com for one of our client since last 3 years and recently we have stopped giving discounts, still getting good orders.
But on the other hand I believe that customer should get some price benefits since you don’t have high operational cost (in most cases if you don’t spend madly on digital and traditional marketing) and you eliminate distributor and retailer.
So, lets see what happens. How does the market shape. Its time that wholesalers/retailers etc spend on their own store and build it to deliver quality and service to customer.
Regards,
Amit
asha chaudhry
whoa! i just read this!
https://tech.economictimes.indiatimes.com/news/internet/flipkart-sellers-threaten-revolt-over-return-policy-say-will-either-exit-or-remain-inactive/52756079
Saurabh Bhatnagar
It’s completely different when you compare your Brand with Marketplaces like Snapdeal, Flipkart, Amazon.
Your Product is unique, not sold anywhere else, so you can price it whatever you want and the loyal customers will buy it from you.
But in Marketplaces, all of them are selling the same products. So the fight remains only over Discounts (to acquire new customers) and Service + Discounts (for repeated buyers).
Saurabh Bhatnagar
Delhi.
But as I know, they are doing it in every major city and inviting major top sellers from the city.
Saurabh Bhatnagar
It had to come.
They have made 4 changes in this year.
Calculations are revised every time. It becomes hard on the sellers to calculate prices every time with new rules. The 3rd change of this year, as I know, was never implemented.
And the latest change is very strict on sellers.
Ashish Daga
Can you please share the deck which was presented or discussed
Saurabh Bhatnagar
I don’t have it.
Amit Shroff
Yes the product is not available on marketplaces like Snapdeal, flipkart etc but lot of new store and website are coming up with same or similar product.
So competition is increasing day by day. So lets see what happens.
Sai Rodinhood Pothuri
i some times feel
E Commerce marketplace : where a manufacturer can sell his products to loose customers. standard rates across platforms will help you get customer trust on your product
Bulk Market places : a place where manufacturer sell products in bulk to customers. like alibaba, india mart etc etc..
So E commerce should be only for manufacturers, this will help in selling right and unique products to customers. Otherwise like people said all marketplaces will be full of junk and it will result in more expenses, more operations and less income to companies.
If this is implemented, then people mindset will also change, because they directly deal with manufacturer and what ever the quality issues with product, will be directly communicated to manufacturer. so people look for quality in product not discount.