Owing to rapidly changing consumer behaviour and shopping patterns, Indian ecommerce market has seen a bullion growth. Gone are the days when people used to say – Will the order reach on time? What are the delivery charges? Will the sites misuse their card information? And so on. The touch and feel factor is no longer an issue while shopping.
There are many researches conducted on the the size of Indian ecommerce market in the coming future. The IT Industry trade body, Nasscom in its report said, Indian ecommerce industry will be a $100 Bn market by 2020 and Internet as a business model can service both domestic and international markets with no geographical restrictions. E-retailing, online travel, advertisement and financial services along with mobile and Internet services would be the key drivers.
Observing a shift from offline retail to eretail many independent offline retail stores have started tying up with ecommerce companies to sell their products and marginalize their income, this is where the concept of the marketplace comes in. A marketplace connects Sellers and Buyers and provide one-stop solution for companies wishing to offer their products for sale. On the marketplace platform, product or service information is provided by multiple third parties, whereas transactions are processed by the marketplace itself. Companies are charged with fees for using the marketplace’s platform – either through an initial listing fee or through a transaction-based fee or a combination of the two.
The rising internet penetration, smartphone wave, ease of shopping, rising standards of living and rapid technology adoption by middle class and most importantly doorstep product delivery with Cash On Delivery (COD) payment option are the driving force behind the growth of marketplaces in India. Moreover, the entry of ecommerce behemoths such as Amazon and Alibaba along with homegrown players like Flipkart and Snapdeal, ecommerce companies experimented their marketing strategy and business development to conquer the entire consumer territory. In mid-2013 and early 2014 ecommerce industry saw unprecedented growth.
Why Marketplaces Are Now The Favorite Destination For Sellers
According to industry resources, presently there are more than 900 ecommerce venture in the Indian digital space with many ecommerce startups opening every month.
The question that arises is why do sellers opt for an aggregator or marketplace for selling their products. Let us look at a few reasons:
- Online shopping is all about internet traffic. The online marketplaces have millions of visitors browsing the site which serves as a wide customer base and huge web traffic for the sellers to tap from the site.
- Opening own website involves higher investment in selling and promoting. Online marketplace given an edge to manage high investments.
- The marketplace provide hassle free uploading of products in a catalog and allows seller to compare vis-à-vis other brands to manage price and other aspects of their product.
- Consumers search for the product and not for the marketplace in particular. Incase the sellers are selling in the category that requires frequent purchase then they can win customers and build their business.
The Timeline of Marketplaces
Since 2010 India has seen a launch of numerous ecommerce marketplaces which have made big over the years.