The Rise of Vertical Marketplaces in Indian E-commerce Space
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The market works with the only characteristic and that is to change. Market has always been under a shift since very early in time. While the multi mega stores were a big hit a few decades ago, it actually revolutionized how people shopped.
The mega stores addressed huge problems of shopping for different things at different shops requiring a lot of time and efforts. The one stop solution was a utility boon for common public, saving time and money both.
The e-commerce industry further ease upped this issue by eliminating the need to even step out of your home and make buying enjoyable in the comfort of your own living room. E-commerce industry has also been under a transit and the rapid growth seen in this segment has been the fastest till now.
The formula with which offline mega retails (Horizontal marketplace) attained a huge success, does not seem to be working for the e-commerce way. There are more and more niche portals (vertical marketplace), offering a single service or solution, are flooding the market. There is also a valid reason for that.
Need to shift focus from horizontal marketplace:
The clear logic says that when people don't have to physically go out to the marketplace, it really does not make a difference whether they shop from one place or ten for their different needs. The only effort goes in is to type a different URL at the search engine for every specific need. While the efforts put in are less, the benefits are huge.
Customers looking at unique offering:
The modern day consumer needs are unique and distinguishes. Everyone wants some personalization and customization of their shopping experience. The evolving niche segment in the e-commerce zone caters to their exact needs without getting distracted by other offers.
If a new mom wants a helping hand at solving parenting issues, she would obviously prefer babyoye.com or firstcry.com over any mega brand online store. The experience of shoppers on LatestOne.com suggests that people are very happy with the kind of product range and service quality we are offering at such niche mobile and tech accessories online stores.
It's obvious to assume that the energies of big mega online portals get distracted over a huge platform and the specific needs of consumers are not dealt with. The single window e-shops, on the other hand, focus all their energies in researching and creating unique solutions for one single area of need.
Broad based players are more volume based whereas niche portals are more value based. Clearly, for a single customer, the single purchase made should give high satisfaction and the high volumes raised by mega online stores are of no use to them.
Improvised customer experience:
The single window model of online market has improved the quality of shopping experience. A robust value proposition has been delivered by such niche online stores in various segments. e.g. Lenskart.com is a great portal with innumerable glass and frame options with many branded as well as non-branded options for different preferences of different people across the nation.
Every third person in the country needs an eyewear and it's sensible to cater to such need on individual basis. The modern day consumer knows exactly what he needs and the platform for a specialized and professional service is highly applauded.
Vertical marketplace provides opportunity to new startups:
The great success that such specialized portals are promising, many venture capitalists are eager to finance these amazing ideas. Venture capitalists have sensed that the future online consumers are smart and will definitely go for their special offerings rather than getting distracted by many brands, products and offers, majority of which are of no use.
The market has been flooded with many customized selling portals offering a unique solution to customer needs. Pepperfry.com in furniture, Zivame.com in lingerie, LatestOne.com in mobile and tech accessories, Lenskart.com in eyewear, Bluestone.com in gold and diamond jewellery, hobbyideas.com for creative stuffs and many more are established brands in their own niche segments.
The success of these ventures has given confidence to more such start-ups to gear up the scale. The untapped potential of the market is ready to be tapped b y such unique ideas and there are several brains working on them. The readiness of serious venture capitalists boosts their confidence while funding the brilliant ideas.
Another major factor in the strong interest of financer in this segment is the profitability. The simplicity of operations makes it hassle free and less tedious affair. The maintenance and development costs are relatively less. The thing to be considered here should be a specific and clear need.
It is always advisable to invest in a segment which is a clear need of the market and promises to satisfy specific customer needs.
Future of vertical marketplace in India:
The trend of tomorrow’s online marketing is the niche. Various venture capitalists and even celebrities are ready to endorse and finance such projects. There is soon going to be a tough fight in the niche segment for the top position.
The deliverables in the niche market are simple but need to undergo constant updating. The far reach of such portals is going to ensure branded and good quality products in the remotest areas of the nation. The tier 2 and tier 3 cities are also to be benefited with the customized solutions and make most of it.