How group buying can change Indian ecommerce? [Media Monday (digital)]
Very recently, Snapdeal secured a position among 100 most visited websites in India. This may be a game changer in the sense that it took Snapdeal only 9 months to do it! What’s interesting to know is that Snapdeal has surpassed some of the other popular ecommerce sites like Cleartrip.com, bookmyshow.com, redbus.in and interestingly flipkart.com, sites which took more than 2 years to reach top positions in India. There are other major group-buying websites like mydala.com, Koovs, Wannamo etc but they are yet to compete with Snapdeal. So what made Snapdeal explode in popularity? There are several (hypothetical) reasons for the same-
- They acquired Grabbon, a Bangalore based group buying firm this June.
- They are run by Delhi based Jasper Infotech who have good experience in online marketing.
- The services and unmatched customer focus offered by Snapdeal.com.
Now, this is not something entirely different from what other players are doing. So the only point which stands out is- “There team is really good at it!” Digital businesses are more about creative execution skills rather than the idea.
But why I’m talking about this as a game changer in India’s ecommerce? Let’s have a look-
- Group buying may be a universal concept like “Social networking”, but unlike social networking group buying is more about local deal making rather than technology. Hence soft skills combined with local knowledge will always play a big part here.
- Many other concepts including “Book buying”, “Movie/Travel ticket buying” etc are universal too, but they are need-based products and hence the margin for websites is very less!
- What local businesses learnt fast from their parent site Groupon.com is such kind of product makes sense only for very high margin businesses- Spas, Restaurants, Adventure trips etc i.e. Lifestyle products.
- Due to the target segment i.e. lifestyle products the TG (target group) came naturally to these websites. Major internet users are those who like to get indulged in such deals and if you combine it with discount coupons for inviting friends, it can really go viral.
- Competition in this area may be huge at start due to very low entry barrier, but because of the kind of business i.e. local understanding of market it’s very hard to survive in longer run. Hence only the best can grow in this business.
Because of a direct revenue model, companies can actually make huge money in short term. Gone are the days when web companies kept on speculating the revenue model! It’s the time when Snapdeal is saving Rs. 3 Crores per day for it’s clients (you can assume the kind of money they are making with every deal) and Groupon is worth more than a billion dollars in just 2 years!
Do you think Snapdeal can go on to become India’s fastest billion dollar Company?