After their online businesses across the major cities of India, the e-commerce giants like Amazon and Flipkart are trying to expand their reach to the huge segment of new-to-e-commerce customers in Tier-II cities and beyond. Flipkart launched its subsidiary Shopsy about two years ago by taking a leaf out from the page of Meesho’s playbook. The idea behind the launch was not only to compete with Meesho by taking the war into the enemy camp but also to counter Meesho’s attempt at encroaching into Flipkart’s territory. The new online platform meant for smaller cities started as a social commerce platform that allowed small-city resellers to order for their network of family and friends and earn a commission. The business model is similar to Meesho’s re-seller model.
Shopsy – the experiment continues
Since its launch two years ago, the Shopsy online shopping platform has tried to elicit the right response from the intended client base. The management was forced to change the business strategy. As a result, abandoning the reseller model and adopting the conventional e-commerce concept of encouraging direct consumer purchases to expand the platform.
After experimenting for two years with several iterations, the Flipkart subsidiary has set a goal to reach out to more than 300 million people who are new to online shopping. With a different strategy from Meesho, Flipkart is eager to use the subsidiary arm to establish itself clearly in the non-urban sector.
Marching toward the next 300 million target
The Shopsy app has been able to draw large crowds as evidenced by more than 150 million downloads on Google Play Store and still counting. Most of the users belong to the group of customers who are new to e-commerce. More precisely, the customer base consists of two types of customers – one who is a newcomer to e-commerce platforms and the other who is an occasional e-commerce shopper.
A detailed analysis of the customer base reveals that of nearly 160 million users who downloaded the app last year, newcomers to e-commerce constituted almost 40% which translates into a massive number of about 64 million users. The achievement is quite commendable considering that the targeted market segment of 300 million in India includes 200 million first-time online shoppers and 100 million e-commerce fence sitters, meaning those who buy products online occasionally.
Thriving on Flipkart’s support
The Shopsy online shopping platform is offering competitive pricing by relying on the technology provided by Flipkart and Ekart’s supply chain capabilities. Ekart is the in-house logistic arm of Flipkart. The cost-benefit derived from automation and with support from in-house technology benefits customers and sellers who enjoy a “hyper-value proposition”.
Automation of the customer experience backend helped Shopsy to reduce costs. By using Flipkart’s AI model for address completion, the platform could drastically cut down on incidents of non-delivery. There are about 15-20 joint initiatives with Flipkart aimed at reducing the cost of the supply chain to pass on the benefit to sellers and customers.
