It’s been nearly a year since Etsy entered India. Unlike its peers Amazon and Walmart who dominate with their sheer market size and number of users, the US-based ecommerce marketplace is not your average ecommerce company.
For those unfamiliar with the brand, Etsy is a marketplace dedicated entirely for handcrafted or handmade goods and products. But its entry in India was partial as it focussed primarily on getting Indian sellers and artisans to cater to its 39.4 Mn active buyers worldwide.
A year into the journey, Inc42 caught up with Himanshu Wardhan, MD of Etsy India to understand the strategy for the Indian market and how it has translated on the ground.
While some Indian sellers have been on Etsy’s platform since 2013, the company has seen a remarkable increase in the number of sellers from the country since it began its custom onboarding program which is unlike anything it does elsewhere on the globe. While Wardhan does not reveal the Indian seller headcount, he does disclose that the company has seen more than 110% increase in the number of active sellers when compared with 2017 and the number of new sellers has gone up by 135% with active listings increasing by 95% in the same time period.
This is not at all surprising given the vibrant handicraft industry in the country, which makes up a significant portion of the MSME sector. “Under the banner of ‘Etsy Collective’, we are doing workshops throughout India where we engage with sellers and buyers to set up their line of business and handhold them through multiple stages of the online selling journey,” said Wardhan.
The idea behind this move is to help the sellers with things like content, customer success and is not entirely focussed around just setting up shop.
Wardhan told Inc42 that one of the selling points for products that Etsy would like to promote is the story of the makers. “India is the only market where we have onboarding sales associates (in seven states) who meet with you and help you set up shop,” said Wardhan.
To further incentivise sellers Etsy doesn’t charge for any of the above services and offers 20 free listings on its platform for four months.
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The company makes its money by charging 20 cents per product (INR 14-15) for four months listing and charges 5% of the transaction fee.
To give you an idea, a typical seller would not sell too many products and we have thousands of sellers from India who have posted a total of 1.5 Mn product listings from India- Himanshu Wardhan, MD of Etsy India
Etsy’s Focus On Women To Grow The Seller Base
One of the biggest differentiators for Etsy when it comes to its seller base, compared to other marketplaces, is that more than 87% of them are women. And in India, where women make a small proportion of the total workforce, that number is indeed surprising.
“When I started building Etsy in India, I too had the same question (whether Etsy can focus on women sellers) and we are seeing a very large majority of participation form women,” said Wardhan.
Etsy Collective workshops are seeing overwhelming participation from women along with a few numbers of men and Wardhan believes this is also being translated into the number of sellers.
“The products that do well on Etsy are jewellery, home decor, apparel and most of the buyers and sellers tend to be women. Once we made the policy clear that we do not want traders or resellers, a lot of businessmen got eliminated,” said Wardhan.
An example that Wardhan mentions is that of Ruchi Pugalia from Lucknow. After a successful but demanding career, Pugalia pursued her passion for fabric and started to make dresses for expecting mothers under the banner ‘Comfy Mommy’ and has sold over 11K customized maternity gowns on Etsy with most of her customers coming from the US and Europe.
Etsy’s India Opportunity
Ecommerce is expected to fuel the next level of Indian consumer growth and is projected to reach $200 Bn in value by 2019. According to a Deloitte India and Retailers Association of India (RAI) report, the ecommerce market is projected to grow to $1.2 Tn by 2021.
In its most recent quarter, Etsy’s revenue rose 40% to $169.3 Mn, while gross merchandise sales, or the value of what was sold on the site, rose 18.9% to pass the $1 Bn mark in a strong performance.
While the growth story has been eased by some of that revenue surge, the big challenge for ecommerce platforms without the massive inventory of SKUs and scale of something like Amazon or Flipkart, is to hold on to its customer base or create repeat users. Etsy is also striving to get more repeat orders; 60% of its buyers shopped only once during the last year.
The company is also trying to broaden its customer base in India in the hope of getting more signed-up users to drive repeat orders. Of course, a more diverse product catalogue will form a big part of the success factor in this goal. And that’s where Etsy could fall back on the large percentage of sellers who are women. This could be the niche that sets Etsy apart in the Indian context.
When it comes to sellers, Etsy categorises them into three brackets-
- Professional designers and artists with training and an existing business offline or online
- Homemakers, hobbyists and enthusiasts (predominantly in urban areas)
- Traditional artisans who have been practising regional art forms
While the workshops are designed to attract the first two brackets, the company is building its outreach program into the grassroots although it isn’t clear if this is something that it would like to do on a scale. The big market is the second category, which should ideally deliver the seller growth for those repeat orders .
For now, Etsy is rolling out photography enablement workshops in states such as Odisha which it plans to expand to a few other states. The company also had multiple discussions with state governments to get access to the data around traditional sellers and artisans, and also to set up skilling workshops for those who are interested in entering the field.
These days the discussion around ecommerce businesses invariably leads to the ongoing tussle between the ecommerce companies and the Indian government over the draft ecommerce policy, which includes discounting, seller agreements and data around ecommerce transactions. Since it’s only focussing on sellers, Etsy is one of the few ecommerce companies that at the moment has no qualms with the government. Wardhan added that the company has had discussions with the ministry of commerce and industry to make it easier for Etsy sellers to reach international buyers and become exporters.
That’s a crucial point given Etsy’s current state of affairs in India. In the Indian market, Etsy is largely focussing on seller growth. In the past, it has been non-committal about tightening the focus around buyers in the Indian market, but Wardhan was more forthcoming about how the company views Indian buyers.
“India has a fast growing ecommerce market and at the right time in the future we will consider focussing on buyers as well. I do feel that there is an opportunity for a player like Etsy given how buyers and consumers have changed. We are trying to redefine how ecommerce is done, which is different from the current deep discounting models that cannot be sustained for a long time,” said Wardhan.
Etsy certainly makes for an interesting player in a segment that has fast become a duopoly and with smaller sellers often finding themselves dwarfed on big platforms. By playing a role in bringing in the new government regulations, the trader, merchant and seller bodies have managed to score a win for the likes of Etsy. And Etsy may find that the time is right to double its bet on India.