It is a great time to be an e-commerce start-up. With the mobile era that doesn’t seem to be going anywhere soon (which works perfectly in this case), brands are shifting towards moving their merchandise online.
In fact, a Gartner report had predicted that by 2018, 50% of consumers in mature markets (like North America, Japan, Western Europe) will be making transactions through their smartphones and other wearables.
Well, we are in 2018 now and it does seem like a strong possibility, encouraging hundreds of new start-ups in the e-commerce segment. The low investment and infrastructure cost, easy access to customer data and more, make it an attractive venture for entrepreneurs.
While I am certain you are weighing (or have already weighed) the pros and cons of this segment, here are 5 things that I believe you can learn from existing e-commerce start-ups.
- Find an underserved market
Take a moment to think about your product. Are there others out there who are selling it? If yes, what makes you so different and why should a consumer choose you instead.
Now I am not saying that to discourage you, rather to encourage you to think differently. Think of the gaps in the market and what people might need but don’t have the right channel to get it.
That is exactly what Richa Kar did when she founded Zivame and in her words during an interview with YourStory.com, this is why, “We don’t think of lingerie as a category. It’s one of the most neglected parts of the wardrobe of the Indian woman and that’s where my interest spiked and I started doing a lot of consumer research.”
Another example is Jessica Alba, globally acclaimed actor and founder of The Honest Company. When she was pregnant, Jessica learnt that most products are toxic, even baby products. She realised that most parents, like her, want a healthy environment for their child to grow up in and the idea for a company that sold organic, non-toxic baby products came to her.
That is how she found her niche and the company catered to an underserved market. Today, The Honest Company is valued at $1.7 billion.
- Personalization is key
You have access to your consumer’s profiles, have an idea of their preferences and what they are looking for – use it.
A great example to prove data-driven success is Amazon with nearly 35% of their revenue (no small number) attributed to recommendations.
Their recommendation system is based on multiple aspects – the customer’s purchase history, what they have placed (and maybe then removed) from the shopping cart, what they have viewed during browsing etc.
So, get yourselves similar algorithms which will increase the rate of purchase and repeat purchase from your customers. What’s more, they even help in customer delight!
- Get noticed
On the internet, among hundreds of e-commerce site, even if your product is different, how do you stand out?
Getting noticed is an integral part of generating user interest and consequently revenue.
Take the Dollar Shave Club, for instance. Remember that video where their founder Michael Dubin said, “Our blades our f*****g great”? They shot that video in their own warehouse on a bit of a budget and it came out great. They went from that viral video to $1 Billion acquisition by Unilever and not to mention the great product that caught the attention of nearly every American male who shaves.
When they launched in 2012, Gillette dominated the razor market and had a market share of over 70%. By 2016, the dominant was Dollar Shave Club with a market share of over 50% and Gillette at about 21%.
They definitely had an amazing product – for a dollar a month, they deliver blades to your home, helping you ‘Shave Time, Shave Money’! But the trick is in getting the attention of your potential consumer.
- The right opportunity always presents itself
You have an idea that is slightly ahead of your time? That’s fine. Ten years ago, probably no one would have said that to you. They would have said that the market is not ready for this and you would be discouraged about how your idea flopped before even taking off.
I say, not anymore.
The finest example in this case is Paytm. They introduced a digital wallet in a country which is so obsessed with cash.
Remember when you would go to a shop and they would charge you an extra 2% for using a card? Remember when stores wouldn’t accept cards at all and firmly insist on cash only?
You probably also have a family member who will withdraw heaps of cash from the bank each month and still don’t know how to operate an ATM card.
How does a market like this accept a digital wallet whose aim was to transform India into a cashless economy?
In today’s rapidly changing environment, the right opportunity is always lurking around the corner. And for Paytm, the opportunity as came Demonetisation, three years later after its debut.
Today, nearly every kirana store, paanwala, chaiwala and others proudly display a poster that says ‘Paytm accepted here’.
So, in the dynamic world that we live in, no idea is too ahead of its time.
- Pick yourself up, dust yourself up
One of the most famous success stories that are floating around social media sites, is Jack Ma’s, the founder of Alibaba, China’s answer to Amazon.
Literally a rag-to-riches story, from being rejected from universities (including Harvard) and jobs, Jack is one of the richest men in China and helped create thousands of jobs for his countrymen.
The important lesson here is to keep fighting, keeping moving and of course, to never give up.
As Binny & Sachin Bansal of FlipKart said, “We were not thinking about numbers then, but we knew something big can be built out of ecommerce.”
With that in perspective, remember, all you need to do is believe!