Tag: finance

India’s e-commerce market is growing at an exponential rate, expected to reach $350 billion by 2030. Last year alone, India Inc recorded 2,007 deals worth $127 billion, 11 multi-billion-dollar deals amounting to $82.5 billion and 97 deals valued between $100 and $999 million, amounting to $26.2 billion. A crucial part of this enormous growth is a relatively-new e-commerce player that was launched only in July 2021. Walmart-owned Flipkart launched Shopsy as a way to provide opportunities to enterprising Indians to start their own online business with no upfront investment.

What is Shopsy?

Shopsy by Flipkart is a 0% commission platform for sellers. The platform enables them to enhance their reach to millions of budget-friendly customers. Shopsy creates a layer of distribution between e-commerce sellers and consumers through Resellers. By leveraging a platform to create an earning, Shopsy permits sellers to target the right audience who would look out for affordable products.

From getting more than 100 million users in record time to boosting local entrepreneurship and e-commerce adoption across India, Shopsy is paving its own path of success. International Business Times had an exclusive interaction with Adarsh Menon, senior VP & Head of New Businesses (Shopsy), Flipkart, to understand Shopsy’s vision, growth secrets and association with Flipkart.

IBT: Tell us about Shopsy and its vision?

Adarsh: Shopsy is our hyper-value e-commerce platform started somewhere towards the middle of 2021, specifically designed to bring new-to-e-commerce customers onto e-commerce. The vision of the platform is to democratize e-commerce for all of India and to give access to low ASP (average selling price) hyper-value e-commerce offerings to millions of Indians who want such an offering.

IBT: What makes Shopsy the go-to platform for online shoppers?

Adarsh: I think what’s worked for Shopsy in the last 12 months is a very targeted, very sharp approach toward customers who want hyper-value e-commerce offerings. These are typically customers who are internet savvy but are not e-commerce savvy. These are people who either haven’t shopped on e-commerce at all or have been sort of fence-sitters of fringe towards e-commerce. They have come on to Shopsy in a very good way.

Shopsy has been designed, conceptualized, and executed, starting from the way we onboard them to the entire journey that we give them, specifically keeping their needs in mind. Hence, we’ve seen that product market fit is very high. The customer value proposition is certainly hitting a sweet spot. And that is making all of these customers come to Shopsy and shop multiple times.

IBT: Launched only in July last year, Shopsy already has over 100 million users. How has Shopsy defied the odds to register such rapid adoption?

I think it comes to the customer value proposition. When products or platforms are able to deliver a customer value proposition that customers like and accept, then the platform scales very quickly. And that’s what has happened in the case of Shopsy. As I said, it’s specifically designed for hyper-value e-commerce, for a specific kind of customer. And everything around the platform is built only to deliver that, starting with the cost structure that we incur, which leads all the way up to the selection that we offer that is typically low ASP anywhere between Rs 200 to Rs 250 merchandise. And because the platform is so sharply positioned towards customers of a certain type, and everything gets built around that, customers in several hundreds of millions adopt it and use it and give us the love that we want from them.

I would say that the 100 million mark was a milestone that we set out to achieve towards the end of 2023. And we actually hit that mark somewhere toward the middle of 2022. And for us, it’s basically on to the next 100 million and then on to the next 100 million from your own.

IBT: Can you tell us about Shopsy’s role in creating employment opportunities across India?

Right now Shopsy works with about 11 lakh sellers across the length and breadth of the country. Now, these are combinations of manufacturers, traders, small-scale MSMEs and so on. We want to keep taking this number up. We don’t have a specific target in mind, but this number of 11 lakh has grown by over 8x in the last 12 odd months. As we keep going deeper and deeper into the country, we will generate more and more employment in terms of our service.

IBT: Tell us about Shopsy’s role in boosting local entrepreneurship and e-commerce adoption for consumers across tier 2+ regions.

Imagine if you’re a seller in Panipat, or maybe a manufacturer of bedsheets in Panipat to give you a precise example. Prior to Shopsy, your customer base would largely be restricted to neighboring cities and probably sell to a trader in Delhi, and part margins when you do that. Today, you could be that same manufacturer in Panipat and you could have a customer who’s coming in from Guwahati via Shopsy and the seller ships directly to him.

So what’s happened because of Shopsy is we’ve opened up several hundreds of millions of customers to all of the seller base across the country who are now starting to sell online and seeing exponential growth in their business.

In addition to this growth, one thing that we are very conscious about building in Shopsy for our seller base is three things:

Shopsy will always be a zero-commission marketplace for sellers.

Shopsy is committed to having the lowest cost of doing business for all our sellers.

Shopsy is committed to having the highest ease of doing business for all our sellers.

A combination of new zero commission, lowest cost of doing business, and highest ease of doing business is bringing lots of e-commerce sellers onto the marketplace as well as suppliers.

Shopsy is also working on demand engine tracks to bring new-to-ecommerce customers onto the platform, enabling lakhs of new-to-ecommerce sellers to become the suppliers and millions of new-to-ecommerce customers to become buyers while Shopsy is the platform in the middle.

IBT: How has Shopsy’s growth been so far?

Shopsy has grown by about 6x in 2022 over 2021. Going forward next year, the growth numbers will continue to be as robust as they are right now. About 40% of the Shopsy customer base is new to e-commerce, hence that validates the thesis or the very reason why Shopsy was born, which is to bring new-to-e-commerce customers onto e-commerce.

About 40% of the Shopsy customer base is new to e-commerce.

In the month of July vs December, the platform has doubled in size and customer count. The seller numbers have also grown very encouragingly. So overall, the growth trajectory for the business is very, very sound. The metric that gives us a lot of confidence to say that we are on the right track is that almost half the customers that come in are new to e-commerce customers. I think that is a validation of the platform actually doing what it was set out to do.

IBT: How does Shopsy stay ahead of the competition and remain relevant in the ever-changing trends?

Shopsy is very focused on the customer. India today has about 180 million customers who are on e-commerce and we think that there are another 200-odd million customers who are on the fence about e-commerce. And that is the base that Shopsy will go after with a very clear single-minded focus. Of the 180 million that shop on e-commerce, we believe there are many there who are also sort of on the fence. They’re not frequent shoppers in e-commerce. So that base also becomes very relevant for Shopsy. So if I look at these two numbers together, you’re talking close to 250 million customers that Shopsy can go after.

Now when the customer base is that large, 100% of the company’s bandwidth, time, and focus is actually just going into the building for that customer, right from understanding her well, understanding her digital habits, understanding how she wants to browse, understanding some of the barriers she has towards shopping on e-commerce and breaking some of those barriers. To be honest, we are focused completely on just understanding that customer and building and solving for her and not looking at how we can stay ahead of the competition.

IBT: How does being a part of Flipkart help Shopsy?

Shopsy benefits immensely by being part of Flipkart. The first benefit we get is that we have access to EKart, which is India’s largest supply chain organization. Through EKart, Shopsy is able to get access to close to 20,000 PIN codes, which is practically every PIN code in the country. And that full base is available for Shopsy to ship products from.

Shopsy takes advantage of all the strong technology stacks that Flipkart has built over the years and it builds on top of it by customizing for the Shopsy customer, who is slightly different from the conventional e-commerce customer. Shopsy didn’t have to build all of this from ground zero. We could just take the stack and build on top of it.

And the third is, when Shopsy started, it had access to all of the existing Flipkart selections. Over the years, what Shopsy has also done is built its own exclusive selection on top of that Flipkart exclusive selection.

A combination of the supply chain, technology stacks and selection are the three big benefits that Shopsy has by being part of Flipkart. In addition to that, we are also able to use all of the learning that Flipkart has gathered over the last 15 years as a very successful e-commerce marketplace in India to keep sharpening our offerings and our propositions going forward.

IBT: Does Shopsy replicate Flipkart’s decarbonizing efforts?

Yes, we do. So Shopsy has the great advantage of being able to pick everything that is best in class in Flipkart, and then customize on top of that. So packaging, for example, for Shopsy is exactly the same as what it is for Flipkart, which has already achieved a gold class in that particular department and Shopsy doesn’t reinvent the wheel. We just take that and start running with it from day one and get that benefit as well.