FIRST MILLION SELLERS ONLINEe-Retail

Evolution of Retail Formats

Historic /

Rural

Reach

Source of Entertainment

•Weekly Market

•Village Fairs

•Melas

Traditional /

Pervasive

Reach

Neighbourhood

•Convenience

Stores

•Mom & PoP

•Kiranas

Government

Supported

•Availability •Low costs•Distribution

•PDS Outlets

•Khadi Stores

•Cooperatives

Modern

Formats

• Total Shopping•Experience•Efficiency

•Super Markets

•Departmental

Stores

•Shopping Malls

E-Retail

•Convenience•Discounts•Many categories

•Marketplace

Entertainment Convenience

Single Brand Multi- Brand

Burgeoning Retail Growth

Total Retail market to double in next 5-7 years.

Organized retail growing at a much faster rate

despite downturns and infrastructure challenges.

E-Retail industry growing exponentially and

expected to reach $60bn in next 5 years.

FDI, one of the key growth enablers.

Demand driven by Tier – 1 cities primarily.

Improving supply chain & infrastructure in

Tier-2 cities to boost supply.

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Source: India in Business website

Largely unorganized• Strong potential exists to systematize the Unorganized Retail in $630 Bn. Market.

• Top 3 Prominent categories almost same in both.

• Urban population and hence Tier 1 cities are the largest consumer (40%

approx.) of the total retail market.

• Top 24 cities contribute to 56% of total retail market & 30% of the overall

market

92%

8%

RISING CONSUMERISM

DEMAND

Growth

Increase in discretionary

income &

Consumercredit

Increasing convenience

in shopping pattern

Changing consumer

preferences&

urbanization

Rising youthpopulation &

workingwomen

Emergence of ICT & social

media

Heightened brand

consciousness

For e-Retail Company, it means…

Customer’s want …

Tie-ups with very large number of sellers necessary.

Backend seamless integration with all sellers so that

appropriate discounts can be offered.

Partnerships on logistics and supply chain side to

ensure quicker delivery.

Innovative model to cater to the Rural population such

as ITC e-Choupal.

Coopetition with organized as well as unorganized sector.

A huge growth potential in the Indian context.

Tier - 2 & Tier - 3 cities largely untapped from organized retail perspective.

Company’s readiness

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

• Continuous Innovation

• Good branding• Good service &

convenient processes

• Wide product categories & deals

• Good funding & recognition

• Services not available in all cities.

• Heavy dependency on internet or telecom connectivity.

• Markets devoid of internet

• Persuade Customers reluctant in shopping online

• Strategic partnerships for bulk sales

• Can be subjected to frauds

• Shipping by sellers to customers without merchandize verification.

Way forward - Cities FocusTier 1, 2, & 3 cities having

specialized o/p

Leverage on economies of

scale

Include Personalization in

products, whenever required.

Most populated cities

Many merchants grew in

proximity because of the

demand traditionally.

Infrastructure and hence

logistics management will be

simpler.

Overlap with areas of

consumer demand & hence

Faster delivery

“Rurban” cities

Can leverage on good

infrastructure in the adjoining

city

Way forward - Categories to onboardon the basis of potential consumer segments

Demographicdividend

Opportunity size Seller Categories

Growing number of

millionaires0.15 mn.

Working Population 600 mn.

Youth 500 mn.

Middle Income Households 75 mn.

“Rurban” Consumers 336 mn. •Personal care•Food & Beverages

•Packaged Food & Beverages•Luxury products & Consumer electronics•Personal care, beauty & wellness

•Packaged Food & Beverages•Apparels & Mobiles•Personal care, beauty & wellness

•Packaged Food & Beverages•Apparels & Mobiles•Personal care & Home care

•Luxury products•Luxury consumer electronics•Home furnishings

Route to Market for on-boarding sellersCall center – outbound & inbound

Mass media campaigns & Digital marketing

Email blasts

SMS blasts

Print & TV campaigns

Direct Sales team (FoS)

Build more Strategic Partnerships and upsell/cross-sell at

every touch point

Run Member-get-Member / Affiliate schemes and Loyalty

Management programs to have more “live” sellers.

Increase number of categories from each seller.

Promote convenience of Seller On-boarding app on various

mobile app stores

Call Center Business Model

1. Cost & Time savings in hiring and training of staff

2. No need to invest in high end infrastructure and technology

3. Well trained workforce to handle customers

4. Easy to scale up and down

1. Risking the brand identity2. Gaps and challenges in passing along

new technical and product information

1. Proper communication of brand2. Vital insights from the customer

conversations3. Integration of call centre with

organisation’s resources

1. Lots of investments in terms of money and time for setup, technology, hiring and training of workforce

2. Managing attrition and morale boosting will be resource intensive.

3. Not easy to upscale & downscale.

Advantages Disadvantages

Outsourced

Inhouse

Considering the scale of operations, Blended outsourced call center model is chosen for lead generation & first time connect with sellers.

Outsourced partner will be chosen basis the following criteria -

Years of experience

Quality of workforce

Billing Procedure

Clients Handled

Key Metrics to be tracked

Service Measures

Accessibility

•Blockage; hours of operation; abandons; self-service availability

Speed of Service

•Service level; average speed of answer; longest delay in queue

Quality Measures

Resolution Metrics

•First call resolution rate; transfer rate

Call Handling Metrics

•Etiquette; knowledge and competency; error and rework rate; adherence to procedures

Efficiency Measures

Resource Utilization

•Agent occupancy; shrinkage; schedule efficiency and adherence; availability

Contact Handling

•Average handle time; after call work time; on-hold time

Profitability Measures

Sales

•Conversion rate

Use of financial resource

•Cost per call

Build Strategic Partnerships

Tie ups with Banks & NBFCs to provide loans and

credit to needy sellers.

• Can be offered as a premium service to the

sellers

Collaboration with National Retail Giants such as

Croma to ensure better logistics management and low

cost to serve.

Partner with MSME and Retail Associations of

target cities to build quick momentum.

Agreement with Justdial / Getit / ZatSe for cross-selling memberships.

More tie ups on logistics management such as India Post.

Keep an Eye on…

Competitive advantage being eroded by Low Entry

Barriers

Regulatory Policy induced barriers

Enabling infrastructure on the telecoms and

logistics front

Skilled manpower

Do’s & Dont’s• Make it easy for seller to onboard.

• Provide Good service, on-time payment

clearance to them.

• Maintain information transparency.

• Good integration with the seller’s online

systems for seamless order pass-

through.

• Membership incentives and loyalty

campaigns for sellers.

• Embrace speed and innovation.

• Ignore seller’s view.

• Make a cumbersome lifecycle process.

• No DR site for any of the functionality.

• Onboard sellers without proper verification.

In Summary… Retail sector moving from unorganized to organized to online.

Onboard sellers in Tier – 2 & 3 cities for next big leap.

Treat sellers as partners and focus on Food, Apparel, Consumer electronics &

durables, personal care & footwear sectors in unorganized sector.

Focus on visually appealing products in categories with no/little personalization.

Tight coupling to seller’s systems for offering best pricing and faster delivery.

Increase the lifecycle of sellers through information transparency and constant

engagement. Once on-boarded, mine the sellers for more categories.

Build a strong multi-pronged strategy through Outcalling, Digital marketing, Media

Campaigns and Strategic partnerships for on-boarding 30K sellers/month.

Continue with thin and flat organization structure for flexibility and innovation. But,

don’t outsource the key processes and IP.

Keep high vigil on performance of the outsourced call center and make sure

essential software such as WFM, Predictive Dialers are implemented for higher

productivity.