Flipkart, the biggest Indian etailer, yesterday announced that it aims to help more than 10,000 sellers generate business in excess of Rs 10 lakh through the platform provided by them during the year 2015.
“About 2,000 sellers became millionaires in 2014, with 500 of them doing business of Rs.10 lakh (Rs.1 million) in December, while 50 of them did a business of Rs.1 crore each,” the Bengaluru based poster boy of Indian online retail said in a statement.
With the Indian online retails scene bustling with activity, all the major ecommerce players in the country have seen their sales figures skyrocketing in the recent times. An encouraging and welcome trend is more and more people from Tier II and Tier II cities jumping on board and buying online, though CoD remains to be one of the most preferred means of paying of paying for the purchases.
At present, the consumer electronics and apparels categories have been registering the highest growth rates (close to 30%) and, according to Flipkart, have the maximum number of sellers touching the one million figure. Next to them come sellers of home decor, handicrafts, jewellery and large appliances.
Three out of every five millionaire sellers for Flipkart come from the metropolitan cities, said Flipkart while adding that non-metros and smaller cities made up only 40% of their millionaire club.
“About 60 percent of the millionaire-sellers were from metros (Delhi, Mumbai and Bengaluru) and the remaining from tier-2 and tier-3 cities. We expect the numbers from tier-2 and tier-3 cities to double this year,” said the company in its statement.
The statement issued by the company went on to elaborate how the e-commerce major is helping sellers create, position and increase the reach of their brands by taking several innovative steps. Among the most laudable efforts of the company have been launching programmes aimed at empowering sellers through workshops, training programmes, SME training, offering capital assistance and providing marketing support services like packaging and cataloguing.
Flipkart will continue its efforts to better the Indian marketplace ecosystem, so that sellers from even the most remote parts of the nation can benefit from this business model, Flipkart SVP Marketplace Ankit Nagori said.
The increasing popularity of the trend of buying online, the rapidly increasing numbers of the Indians connected to the internet, the lightning pace at which smartphones are being adopted by the masses all herald well for the growth of online retail in India because of which Nagori expects more sellers to join the e-commerce ecosystem during the ongoing year.
How Can Rs. 10 Lakh (or 1Cr) Business Make Sellers Millionaire?
All said and done- I want to ask Mr Nagori if he indeed does understand the difference between sales and profits. Does making doing business worth Rs 10 lakh make someone a MILLIONAIRE, is my million dollar question?
Even person making Rs. 10 Lakh profit cannot be called a millionaire in strict terms – Generally, the term millionaire refers to someone who has assets (not income) worth more than 1 Million (either dollars, pounds or rupees).
In any case, given the margins eCommerce sites are operating on, it is very difficult for most of sellers to become millionaires, except probably the top 50 (It is just a wild guess)
The only persons getting richer and becoming millionaires billionaires are the site owner themselves!
For heavens, Flipkart. Though we love you for taking some innovative steps to scale up your presence, we hate your attention grabbing tactics – this being the latest one!
I get the logic that sales != profit. This seems to be the only point of this writeup.
But let’s say you take FlipKart down. The merchants would have then, in the worst case, lost their Rs. 10 lakh sales. The inventory would have been lying around, with rising debt obligations. In essence, when fixed cost are anyway present, any additional sales greatly helps the profits. The impact is even higher for turnkey merchants, who will source goods only when there’s order – often with 20% or higher profit margins. Flipkart (eCommerce) is good, and it is here to stay. Isn’t this website itself making money by affiliate links? Good day!