Penetration reaps benefits

Shoppers in non-urban areas adopt well to e-retail.
Penetration reaps benefits

 

E-retail too is reaping benefits from tier II and tier III cities. In a conversation with Ishita Swarup CEO & Co -founder of 99 labels, Gunjani Piplani gets insigths of the business from these cities of India. 

Gunjan Piplani (GP): How has the market for e-retail evolved in terms of penetration into cities beyond urban in past one year?

Ishita Swarup (IS): Our target audience, while being largely in metros, also comprises audiences in tier II and tier III cities who are willing and able to buy brands like DKNY, Calvin Klein, Guess, Michael Kors.etc but are not able to buy due to non-availability of the merchandise in their cities. We are seeing more ease with online transactions, increased brand awareness as well as better purchase power combined with more net accessibility. It’s clear to say that the time is right for e-retail to penetrate tier II and tier III cities with success. The fact that we are an online shop and can deliver pan India makes us a viable shopping destination for tier II and III cities.   Loyal customers actively want to connect with their favorite brands online and we facilitate the process for them.

We have gone from just being known and present in top Metros to receiving orders from smaller towns like Ranchi, Asansol, Dibrugarh, Hapur, Haldia, Kharagpur, Vishakapatnam and Munnar. Despite the small size of the Indian e-commerce market, we have been growing at the rate of 20 per cent MOM.  With India poised to have the third largest net users by 2103, a booming economy and worsening traffic conditions; we can certainly look forward to more online purchasers in smaller cities as well as the metro urbanscape.

GP: What are the reasons behind this kind of change in the buying patterns?

IS: Our target is largely women, in the age bracket of 23 and 34 years, most of whom are juggling multiple responsibilities of home and work. When we started out, 80 per cent of the online consumers present in India were male and most online businesses were catering to them. We were the first to focus on women as our target group and focus on selling fashion merchandise online.

Members of this segment usually love shopping and discounts, but have many demands on their time and find it hard to find the time to browse and shop. People in general have started being more expressive of their personality and style, and the well-curated merchandise on our site gives them a wide array of choices to do so. Many of these women are more brand-conscious now with exposure to many more international brands through Television, magazines etc. and they have also found the facility of COD payment very convenient. Initially, buyers preferred to order accessories but they are increasingly buying apparel which is now our largest selling category.  They are willing and able to buy these brands, and 99labels addresses their needs, beautifully and completely.

GP: Have the Indian consumers in these regions become more aware about brands or its still of a trial buy that they do? Which brand and product they buy the most?

IS: There are some segments of consumers in tier II and tier III cities that have travelled abroad and/or have lived in the metros for some time. They are aware of the brands and have the purchasing power to buy them. We overcome the problem of lack of availability as our site caters to orders from all of India.

We often see a cautious foray into e-shopping especially with tier II and tier III audiences with regard to their online shopping behaviour. Once a comfort zone is achieved in terms of satisfaction with merchandise and ease of payment, we see a lot of repeat traffic to the site. In the event that they are less than completely delighted with the product that they buy, we have a very easy return policy in place. This makes it much easier to decide on a purchase even if the customer is unsure of the fit or suitability, because they know that they can return or exchange the product with no trouble or expense.

People shop largely for apparel and we see both Indian as well as western apparel moving very well. Categories like handbags, belts, accessories and footwear do very well too.

GP: Which cities for you have emerged as an unexpected region and how?

IS: There have been many tier II cities, tier III cities like Cochin, Thiruvananthapuram, Jaipur, Agra etc as well as towns in North East India which have unexpectedly emerged as receptive markets for us, the response has been remarkable as well as steady. In the first six months of being in operation, we had a buyer from Agra who ordered a D&G watch worth Rs 10, 000. That was an unexpected order for us and since then we have had more orders from smaller towns for high end brand products.

GP: What changes in terms of numbers have you seen in the number of visitors from cities beyond urban? What was is it last year and numbers now?

IS: Close to 57 per cent of our buyer base come from smaller cities and towns, excluding metros and mini metros like Delhi, Mumbai, Bangalore, Chennai, Kolkata, Pune, Hyderabad. Last year we had approximately 40 per cent  buyer base from smaller towns and those numbers have definitely increased over the year. While we can’t divulge exact numbers, we can definitely say that the number of people visiting, buying and returning to the site has gone up considerably.

GP: How are you marketing and promoting your portal in these regions?

IS: The target audience is exposed to most of our marketing and promotions online across India and even in our emerging markets, we have stayed with maintaining an online presence. We work on the premise that most of our potential customers are regular net users, and this is the medium through which we communicate and market to them. We attempt to effectively use online advertising on networks and social media like facebook ads, the 99labels group on facebook and twitter to market our site. We also have a referral program which is a strong tool for us to use existing members’ social circle to reach out to other potential customers.

 GP:  How much do the non urban regions contribute in terms of revenues?

IS: Close to about 40 per cent of our buyer base is based in smaller towns and cities, with numbers increasing each month. However it’s clear that non-urban regions are fast catching on to the trend and are becoming areas to reckon with in the business of e-tail.

 

Ishita Swarup
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