eCommerce is about much more than the sale of expensive gadgets and luxury goods like fashion, décor accessories and jewellery.
At the heart of the matter, eCommerce is a tool to bring producers of goods and services into direct contact with a huge potential buyer base, local, national and even global. Thereby, it is a means to eliminate the middleman who has traditionally acted as a gatekeeper and made a profit by buying cheap in bulk from producers and selling smaller quantities at a lower rate to buyers.
In India, a multi-layered system of middlemen has dominated the agricultural produce sector, thanks to a law enacted in the 1960’s which prohibits farmers from selling directly to the buyer and instead requires them to sell to middleman-dominated agricultural produce committees. According to analysts, a crop goes through as many as four intermediaries before reaching the local vegetable market in an urban or semi-urban area. This practice has been blamed for the ever-growing inflation in fruit and vegetable prices.
The government is trying to slowly dismantle the system, large retail chains like Reliance Fresh have faced retailer wrath in the past for trying to bypass it. eCommerce represents a natural approach shaped by market forces, to painlessly neutralise it.
US Startup Wholeshare offers an example of how the model could work in India. Wholeshare is based on an interesting proposition that combines a farmers market with an online buying club and a grocery store. At the back end, it allows vendors (both individual farmers and wholesalers) to edit product catalogues, manage, track and fulfil orders. On the front end, buyers form online clubs or groups according to location and requirement. Once the total of a group’s order reaches a wholesaler’s minimum, the order is sent off and each member is charged individually. Once the order is fulfilled, it goes to a central location where the entire buying club comes to pick up the items. The big appeal for shoppers is a 30 to 50% discount on retail prices.
The buying club model helped to convince sellers as it created new markets for them, which would have otherwise not been cost effective or feasible to service.
It was a complex process to bring it all together, but finally it appears to have worked. So far, about 200 buying groups have signed on and Wholeshare has been processing 1,000 orders a week. The company works with second tier markets, addressing the ‘last-mile’ in the grocery chain.
Closer to home, an eCommerce start up called Dharavimarket.com is working with artisans and craftsmen in Mumbai’s largest slum, allowing them direct access to local and international clientele. The vendors mostly connect to the internet through smartphones, so Dharavimarket has created a mobile application through which they can upload pictures of their products that they click on their phones. Snapdeal has tied up with the startup to create an exclusive Dharavi Market Snapdeal Store. Snapdeal will not only provide complete assistance with regards to online cataloguing of products but also help refine the product offerings through its analytics based market insights. The initiative is in line with Snapdeal’s vision to create 1 million successful entrepreneurs over the next three years.
I believe that this is the way of the future. For eCommerce to truly be a revolution, it has to offer more than the ‘cheapest ever’ prices on latest gadgets. It has to be an engine of entrepreneurship, and facilitate the producer to get his best price from the market. That is when we will see digital inclusion, in the true sense of the word!
Phani Bhushan is the founder of Anant Computing. Anant Computing helps companies to create native apps in every Indian language, that run on any feature phone or smartphone. Team Anant firmly believes that true digital inclusion will happen if every citizen of our country has the power of internet and computing at their finger tips. Our vision when we designed Anant was a more digitally inclusive India, where everyone with a mobile phone can both create and access high quality apps ,sans language barriers.