Why are Sellers Looking Beyond Indian Online Marketplaces?
Ecommerce in India has certainly traveled a long way since the days of its inception. With a splurge of online marketplaces like Amazon India, Flipkart, Snapdeal, Shopclues etc. in India, the floodgates for Ecommerce industry has been let open like never before. Ecommerce in India, as such, has undergone a stupendous growth in recent years due to factors like increased proportion of middle class with a rise in disposable income, the higher rate of digital penetration, flexible payment measures like COD, better customer services and so on. However, the real-time challenge that is being faced by Indian sellers is sustaining themselves amidst the momentum of high-growth in the Indian online marketplaces. This is the reason why Indian sellers are readily opting to step out of the national market and go global.
Major Pain-Points being faced by Indian Sellers on Indian Ecommerce Platforms
There are quite a few pain-points that Indian sellers have to face for selling on Indian marketplaces that don’t allow them to augment their sales in the country and come out as a forerunner in the industry. Some of these may be listed as following:
Low Product Visibility:
Acquiring visibility for a particular brand and its products on Indian marketplaces is a really tough thing to get through. In a crowded marketplace, where several sellers are fighting to be positioned on top with the same kind of products in a particular category, it is really difficult to stand out. Also, the visibility for the product listings may not be certain and steady all the time thereby affecting the overall sales.
Pricing is a serious concern in Indian Ecommerce because customers still try to compare the prices before finally choosing from a range of products. As such, the lowest priced products receive the highest sales orders. This, in turn, lowers the brand value of products due to change in buying perspective of customers.
Thin Profit Margins:
Though the prospects of selling online on Indian marketplaces cannot be overlooked, yet profitability remains negligible or low owing to the aspect of price sensitivity. The additional expenses that a seller needs to incur for operations, warehousing, packaging, domestic courier charges, state taxes and marketplace commission leaves him or her with minimal profit margins which might even go away with a single product return.
Inconsistent Sales Volume:
The volume of sales is one of the biggest pain-points for Indian sellers as it tends to vary all the time. Although a seller makes projections for achieving specific sales targets, yet most often the end-results are not met. The inconsistency of sales may be attributed to several factors like number of product offerings, promotions, quality of products, packaging, the speed of product delivery, the price of products, product reviews etc. that hampers the overall sales to quite an extent thereby affecting the net revenue earned.
The recent payment trends by Indian online marketplaces are compelling Indian sellers to end up withdrawing themselves from the platforms. Marketplaces have a noticeable tendency of holding back payments to sellers for any sort of unnecessary product returns as a result of which payment cycles get delayed or failed.
Logistics is a big challenge faced by Indian sellers selling online on Indian marketplaces. The presence of hardly a few renowned and reliable logistics partners that can successfully deliver products to tier-4, tier-5 and tier-6 cities in the country is a huge market dampener. Also, end-to-end supply chain visibility is a serious concern for most sellers that further aggravates the problem.
Order cancellations and Order returns:
With varying mindsets and moods, Indian Ecommerce buyers often tend to cancel orders at the end moment prior to its delivery. The problem is further compounded with Cash on Delivery being the most preferred mode of payment by Indian masses. Also, an unexpected order return gives a heavy blow to the seller’s profitability as he or she has to take back the product for not catering to quality parameters.
Reverse logistics, which involves management and sale of surplus or returned products, is known to disrupt the business of most online sellers on Indian marketplaces. With one single product returns, a seller has to bear the entire forward and backward logistics costs to obtain the product back which implies incurring a double loss.
Present Indian Ecommerce Scenario Making Way for Sellers to Go Global
Studies suggest a dip of 6% (as per Economic Times) in Indian retail in recent years that has in turn affected Indian Ecommerce to quite an extent. This critical juncture for Indian sellers on Indian online marketplaces is intrinsically making them step out of the domestic boundaries and become an international player. However, selling on international marketplaces is not an easy task and requires a lot of insight about the suitability and norms involved therein. An international eCommerce aggregator would be the best point-of-contact for getting a grip over an international marketplace.
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