 "Consolidation will help e-commerce players scale up their businesses: H S Bhatia")
The desire to own branded products and the availability of attractive discounts are fuelling the growth of surplus products, H S Bhatia tells Sangeeta Tanwar
After a series of buy-outs - the latest being Flipkart's buy-out of Jabong, the e-commerce industry seems to be headed for consolidation. How do you see the industry evolving over the next 12 months?
Consolidation had to happen in the e-commerce industry which witnessed the entry of several new players in the last few years. In marketing terms competition between multiple players in a crowded market is referred to as "land grabbing". Like any other industry, the e-commerce industry too has been witness to land grabbing where due to intense competition and heavy discounting a few players have been left gasping for resources. Given the growth potential that the industry has to offer, players will be fighting it out to gain a foothold in the industry, however, only those with deep pockets, a sound business model and a differentiated offering will be able to sustain and thrive in the long-term. And this is exactly what has happened in the e-commerce space. From a large number of stakeholders, we have Amazon, Flipkart and Snapdeal emerging as the big three players.
Consolidation will help existing players scale-up their businesses, bring in a lot of productivity and help strengthen their inventory buying capabilities. It will also encourage players to stop worrying about wooing customers with mindless discounts and instead concentrate on improving the quality of the business and delivering a far superior consumer experience.
There's a strong momentum in the refurbished and unboxed goods category. What is driving this growth and what does this say about changing consumer preferences?
Our customer feedback and market analytics point out that rising income in the hands of the middle class and their growing aspiration to further enhance the quality of their lives is driving the growth for refurbished and unboxed goods. Today's aspirational consumer is looking forward to having a great lifestyle, she aspires for good things but does not always have the money to support it. So as long as the product is functional and comes with a warranty, the aspirational consumer will go for a new, refurbished or unboxed product. This way the consumer gets to own the brand she desires but at a discount.
All in all, the consumers' lack of purchasing power, the desire to own branded products and the availability of attractive discounts are fuelling the growth for surplus products.
In terms of category break-up, which are the most in-demand segments in the refurbished and unboxed goods market? Any reason why these categories are doing better than the others?
Electronics is the leading category in the refurbished and unboxed goods market. Within this mobile, tablets and LED TVs witness highest sales. Mobile continues to lead this segment due to two or three reasons. The pace of technological advancements are more frequent in the mobile industry as compared to any other product category. With fast-evolving technological advancements people want to own and flaunt the latest gadgets in town. In comparison, in the case of refrigerators and washing machines, the pace of technology change is slower and therefore a buyer does not feel the need to change these products as quickly and as frequently as she changes a mobile.
Similarly, in the case of lifestyle products people do not go in for a used product; instead they prefer to go for a new product. Also, in terms of business, per unit value for apparel products ranges from Rs 300 to Rs 800, but in mobiles, the average unit value stands at Rs 5,000 to Rs 7,000. So in terms of value contribution, mobiles and electronics account for 90 per cent of my business.
People continue to be wary about product quality and reliability, especially in the case of unboxed products. How can brands go about reassuring consumers on these two parameters?
Insecurity and apprehension regarding online purchases among buyers is an issue that the entire industry is grappling with. Each of us is trying to dispel consumer concern around quality and reliability of products sold online on our own strength, either through sustained marketing efforts or by delivering a seamless user experience.
At Surpluss.in, we focus on promoting faith and trust among our consumers from the time they land on our website. For us transparency is important and this is why we have marked our catalogue, that is stock keeping units, with specific tags classifying them as new, refurbished, or open box product. This practice ensures the customer knows exactly what she is buying. Also, like many other e-commerce players, we have a fair return policy. So even if a buyer is purchasing a discounted product she feels safe and secure in the knowledge that in case the product bought fails to meet her expectation, she can return it within 14 days. Such safeguards ensure that the customer does not feel short-changed.
More than 37 per cent our customers are repeat customers. This goes on to testify that our buyers' previous experience with us has been excellent. In fact, we get a lot of buyers simply through word of mouth.
After a series of buy-outs - the latest being Flipkart's buy-out of Jabong, the e-commerce industry seems to be headed for consolidation. How do you see the industry evolving over the next 12 months?
Consolidation had to happen in the e-commerce industry which witnessed the entry of several new players in the last few years. In marketing terms competition between multiple players in a crowded market is referred to as "land grabbing". Like any other industry, the e-commerce industry too has been witness to land grabbing where due to intense competition and heavy discounting a few players have been left gasping for resources. Given the growth potential that the industry has to offer, players will be fighting it out to gain a foothold in the industry, however, only those with deep pockets, a sound business model and a differentiated offering will be able to sustain and thrive in the long-term. And this is exactly what has happened in the e-commerce space. From a large number of stakeholders, we have Amazon, Flipkart and Snapdeal emerging as the big three players.
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There's a strong momentum in the refurbished and unboxed goods category. What is driving this growth and what does this say about changing consumer preferences?
Our customer feedback and market analytics point out that rising income in the hands of the middle class and their growing aspiration to further enhance the quality of their lives is driving the growth for refurbished and unboxed goods. Today's aspirational consumer is looking forward to having a great lifestyle, she aspires for good things but does not always have the money to support it. So as long as the product is functional and comes with a warranty, the aspirational consumer will go for a new, refurbished or unboxed product. This way the consumer gets to own the brand she desires but at a discount.
All in all, the consumers' lack of purchasing power, the desire to own branded products and the availability of attractive discounts are fuelling the growth for surplus products.
In terms of category break-up, which are the most in-demand segments in the refurbished and unboxed goods market? Any reason why these categories are doing better than the others?
Electronics is the leading category in the refurbished and unboxed goods market. Within this mobile, tablets and LED TVs witness highest sales. Mobile continues to lead this segment due to two or three reasons. The pace of technological advancements are more frequent in the mobile industry as compared to any other product category. With fast-evolving technological advancements people want to own and flaunt the latest gadgets in town. In comparison, in the case of refrigerators and washing machines, the pace of technology change is slower and therefore a buyer does not feel the need to change these products as quickly and as frequently as she changes a mobile.
Similarly, in the case of lifestyle products people do not go in for a used product; instead they prefer to go for a new product. Also, in terms of business, per unit value for apparel products ranges from Rs 300 to Rs 800, but in mobiles, the average unit value stands at Rs 5,000 to Rs 7,000. So in terms of value contribution, mobiles and electronics account for 90 per cent of my business.
People continue to be wary about product quality and reliability, especially in the case of unboxed products. How can brands go about reassuring consumers on these two parameters?
Insecurity and apprehension regarding online purchases among buyers is an issue that the entire industry is grappling with. Each of us is trying to dispel consumer concern around quality and reliability of products sold online on our own strength, either through sustained marketing efforts or by delivering a seamless user experience.
At Surpluss.in, we focus on promoting faith and trust among our consumers from the time they land on our website. For us transparency is important and this is why we have marked our catalogue, that is stock keeping units, with specific tags classifying them as new, refurbished, or open box product. This practice ensures the customer knows exactly what she is buying. Also, like many other e-commerce players, we have a fair return policy. So even if a buyer is purchasing a discounted product she feels safe and secure in the knowledge that in case the product bought fails to meet her expectation, she can return it within 14 days. Such safeguards ensure that the customer does not feel short-changed.
More than 37 per cent our customers are repeat customers. This goes on to testify that our buyers' previous experience with us has been excellent. In fact, we get a lot of buyers simply through word of mouth.