Understanding the dynamics
Such conversations are a constant reminder of the symbiotic relationship they share with online marketplaces. It makes me believe that in the current times, one cannot succeed without the other. Even more so in India where consumers are diverse in their sensibilities and also across price bands. Through ecommerce, local sellers have been able to reach the length and breadth of the country.
And this is not limited to the borders of the country. Ecommerce has enabled small businesses to access international markets and they have experienced firsthand how customers in different parts of the world appreciate their handmade creations – I am sure this is a feeling of great joy for every creator.
Besides the emotional reward, selling online also brings with it monetary gratification. Sellers have been able to better manage overhead costs such as rent, utilities, and staffing, allowing them to invest their resources in their business and upskill themselves. Online marketplaces simplify the job of finding customers and showcasing their products to the right audience. Tools such as personalized recommendations, smart search, even personalized adverts all help the seller’s products be discovered easily.
This symbiotic relationship benefits both parties. Creators are able to sell online and e-commerce platforms thrive because of these small businesses. A virtuous cycle is at play, where small businesses enable ecommerce platforms to have a diverse range of products, thus attracting more customers, increasing traffic and eventually sales. This increased traffic and sales will in turn attract more small businesses to the platform. As volumes grow, online marketplaces will incur fewer expenses in onboarding the next small business, thus enabling the small businesses to offer competitive prices while still making a profit.
Small businesses also have a sense of the pulse of the local markets they serve. This helps e-commerce platforms to be in sync with customer demands that their machine algorithms might not yet have picked up. The symbiotic relationship is a good long term beneficial ecosystem. What more can be done?
A recent Bain & Company report noted that the e-retail industry in India is expected to register over 350 million shoppers, taking Gross Merchandise Value to $100-120 billion by 2025. But a lot more needs to be done.
While the Government of India has taken a slew of initiatives to encourage small retailers and local artisans to sell online such as tax exemptions, running awareness drives, and supporting e-commerce startups in the country, there are several measures that e-commerce players can take to keep up the momentum.
Training small businesses on how ecommerce works, teaching them the basics of high quality listings, product photography and product videos will all go a long way in growing the ecosystem and benefiting every player.
Reaching out to small businesses who might not yet be part of the digital movement will be important. There might be any number of reasons why an artisan or creator is not part of an online retail platform. Reaching out to them and showcasing the benefits of online selling and the ease of usage will be paramount in growing the industry.
This can be done by partnering with local trade associations and participating in local trade shows, if any. But more importantly, ecommerce players need to develop a sense of community with local artisans and sellers that offer them security.
To conclude, while large retailers may bring in more revenue, it is the local retailers and artisans who are the backbone of our businesses. Their products are what make an online marketplace interesting, diverse and, delivering unique experiences to consumers in the long run.
The author is VP and Country Head India, Etsy.
