In recent years, e-commerce has taken the world by storm, changing the way we shopped, forever. Its newer avatar, m-commerce, has further accelerated the pace of growth in this segment, considering smartphone penetration itself is at an all time high.
The situation is no different in India where out of a total population of roughly 1.2 billion, 900 million already have a mobile subscription. However, only 110-120 million of them own a smartphone. But herein lies the potential of m-commerce because smartphone penetration in India has witnessed exponential growth in the last couple of years and the trend is only getting better with time.
With e-commerce and m-commerce, the world suddenly opened up for both – buyers and sellers. Geographical boundaries ceased to exist and we had access to the best of products and brands from across the world, that too from the convenience of our homes.
Similarly, sellers who started leveraging these platforms saw their fortunes change as business went up multifold; more than they would have ever imagined otherwise. They couldn’t ask for anything better, but this is just one part of the story.
Now look at the other side of the coin, while the e-commerce and m-commerce revolution was in full force, the local markets in the neighborhood had to bear the brunt because they were losing business rapidly to online markets. They felt helpless and were left wondering how to sustain themselves in this situation.
While market players like PepperTap, Grofers and Localbanya have already identified and set foot into this market space, albeit only in the grocery segment, they have generated enough traction to draw the interest of investors, with all three having received substantial investment to consolidate the businesses further. That is proof enough of the potential that n-commerce offers. It essentially plans to tap into the offline retail market in India, currently estimated at roughly $340 billion.
Localbanya, a Mumbai based online grocery store, raised an undisclosed amount in its third round of funding from Shrem Strategies in March 2015. Its biggest competitor in MumbaiBigbasket, which raised $10 million from Ascent Capital way back in 2012, managed to raise another round of funds earlier this year from Singapore based LionRock capital. Moreover, in 2015 itself, PepperTap, a Gurgaon based mobile platform for grocery delivery received an undisclosed amount of seed funding from Sequoia Capital.
This is a good business model.
BUT, here is my question – why not bring in the concept of frugal innovation here? (Of which, I am a huge believer). Why depend on human intervention aka middlemen when technology can deliver? Why have a business model that is capex heavy? Why can’t technology empower ALL the stakeholders in the system?
So, while e-commerce and m-commerce were all about having the world at your feet, they failed to tap the small and sundry players in the local neighborhoods, such as grocery stores, dry cleaners, electricians, tailors, vegetable and fruit vendors, chemists, photocopiers, watch repair shops, car mechanics…the list is endless.
How convenient would it be if other than ordering our favorite gadgets and dresses online, we could tap technology, smartphones in particular (simply due to their easy access), to do these small, yet inconvenient and time consuming chores, and make our lives easier. These chores can feel like a complete waste of time and often we end up procrastinating these menial, but important chores simply because we feel “too lazy’ to step out of the comfort of our homes. And what about the carbon footprint we leave, if for every little chore a member of the family will take the car out!! Every single day. Do the math here.
Come to think of it, it’s not an impossible task, now that the basic platform is already available in the form of e-commerce and m-commerce. It’s all about tapping this space and taking it to the other end of the spectrum; think “neighborhood’, not “hyper-local’.
It would simply require integrating all possible service providers in the local neighborhoods onto the available platforms and enabling customers to get instant access to the ones in their vicinity, when the need arises. So whether you want to order milk, vegetables, grocery, stationery, or get your laptop repaired, laundry dry cleaned, suit altered or microwave repaired, you can accomplish it all with a simple tap on your phone. I guess we can call it “n-commerce’ (Neighborhood Commerce). Just apt.
Not only will it make lives easy for customers, it will offer a host of benefits to the local service providers. The obvious gain would be in terms of business volumes seeing a huge surge owing to regular orders from the vicinity, making these businesses a sustainable source of income for the sellers.
Another significant benefit would be that n-commerce would compel these otherwise ignorant players to start keeping stock of things and organise themselves better. Inventory tracking and management will improve, which will help them reduce costs by minimising any dead stock.
Moreover, data analytics would help analyse the trends – customer-wise, product-wise, and season-wise – and then stocking goods accordingly. There’ll be lesser chances of turning away and eventually losing a customer because everytime he/she orders, the seller “Doesn’t have the “Pepsi’ or “Ponds moisturiser’ in stock.” Above all, they will no longer feel left out of the online race.
The focus will shift to managing costs and improving services with n-commerce driving up competition in the local markets. It’ll be a win-win situation for both, customers as well as sellers.
Going by these recent developments, n-commerce is likely to be the “next big thing’ that will disrupt not just the e-commerce and m-commerce market, but also the franchise model in India, and set the cash registers ringing.
Published on Entrepreneur