12-31 2019   09:13:40
   

E-commerce going overseas | What about the Indian market?

According to China's experience, social e-commerce is a highly competitive product of the e-commerce industry, but not India. India is a relatively healthy business ecosystem that has suffered a huge loss in the existing B2C business. Meesho's founder team has a rational understanding of the real constraints of B2C business in India today, and insurmountable factors in the short term. These insurmountable factors mainly include: very backward basic industrial production capacity, supply chain, infrastructure and immature e-commerce consumer habits. The core is the supply chain and infrastructure.

2) The supply chain determines the product, and the infrastructure determines the logistics. The premise of the rapid development of the e-commerce industry must be a strong supply chain that provides abundant and cheap products, and the improvement of infrastructure to minimize logistics costs.


1.2 What is the core of Indian social e-commerce?



1) Social e-commerce is still vertical e-commerce. Domestic social e-commerce is a positive but not comprehensive e-commerce. It takes a subdivided vertical field and establishes a profitable closed loop through customer groups and sales channels.


Pinduoduo is not a social e-commerce, it is just a community that depends on traffic in the early stages of development. Yunji is the shell of social e-commerce and the core of micro-commerce (MLM). The categories cut into social e-commerce are mostly mother and baby, cosmetics and health products. The distributor group is based on Baoma, the traditional female micro-business group.


2) Indian social e-commerce has now launched a Meesho. Meesho's rise just after the end of the B2C war in India, the three major camps (Amazon, Walmart, Alibaba) battled the Indian e-commerce market through cashback, and ended dismally.


3) Meesho's current strength is that the traffic is very good, and India's large number of housewives are effectively incorporated into its commercial links to become its micro-distributors. The shortcomings are, like other e-commerce platforms, the supply chain. Because the current platform that the Indian market can play, the goods are all in India, whether it is domestic production or customs clearance through general trade. But most of FMCG in India relies on imports from China.


4) The general logic of China-India trade is that Indian importers take goods from Chinese wholesale markets (brands place orders directly from factories), and then container shipping to India. After customs clearance, the goods are concentrated into the wholesale markets of several first-tier cities, and then passed Wholesalers at all levels distribute at every level, and finally to retail terminals. Therefore, compared with the general cost of taking goods in China, the retail price in India usually doubles by three to five times. Whoever can reduce the cost of this traditional trade can succeed.


Finally, to summarize the problem, the core of social e-commerce in the Indian market is still playing traffic. How to drive a single quantity through selection. This gameplay is based on the fact that all the goods are in India and that they are very familiar with the marketing professionals of Indian social media.


Indian e-commerce apocalypse


The past few years have been when B2C e-commerce platforms fought in the Indian market. After the war, some people were happy and worried, and there may be some lessons and enlightenments from the success or failure of them.


2.1 failure of paytmmall and success of clubfactory


From a purely business perspective, why did paytmmall fail? Why did clubfactory succeed?


 To be precise, paytmmall is the same business as clubfactory. When paytmmall subsidized the last year, the publicity was only 140,000 daily orders, and the bulk of it was still in India. The cross-border part was less than 20,000 daily orders. Clubfactory's daily list is approaching 100,000.


 After the retrospective analysis, the summary factors are as follows:


1. Clubfactory started inventory ERP with inventory data of a large number of factories in China. In addition, clubfactory is still a big buyer of 1688. 1688 has almost collected all factory data of FMCG products in previous years. These goods have a common feature-very cost-effective.


2. Clubfactory is the same as jollchic. It is a supply model. After all suppliers put the sku on the shelf, the product pricing is determined by the platform. The supplier only needs to give the platform a supply price, and the order is generated in India. China ’s unified collection And then ship.


3. Paytmmall has a natural disadvantage in addition to the selection (after taking over the business, the cross-border dedicated supply team has made a special analysis tool for selection) after taking over the business. The other is that the logistics strategy is very failed, almost selling one loss and one loss. , Recruit a seller to die. Paytmmall sellers sign agreements with logistics providers individually, and each order must calculate the first weight. Clubfactory is very clever to use the platform name to collect all the small packages into a large package. A large package only records the first weight (the first cost is very high) high).


4. In terms of selection and logistics strategy, clubfactory is worthy of reference for those who later enter the Indian e-commerce market. Of course, clubfactory is also in trouble now. Such policies and compliance risks can be imported into India through general trade through data analysis. Because it recruits more local Indian sellers, their goods still come from China. This kind of operation mechanism and cost control has increased a lot.


2.2 How to solve the status quo and difficulties of India's e-commerce supply chain?



1) Current status of the supply chain


The full picture of India's supply chain needs to be researched, but 3C digital is basically Chinese goods, fashion accessories, and India has a very mature supply chain, but the production process is a few steps behind China and Bangladesh. The advantage of the footwear supply chain lies in leather shoes. All other footwear rely on imports from China. Indian sports shoes and casual shoes brands all place orders from Quanzhou, Wenzhou and Guangzhou. Among them, almost no production of board shoes, all rely on imports from Wenzhou. Commodities are almost dependent on Yiwu, which exported 26 billion US dollars to India the year before (data from Chouzhou Commercial Bank)


2) Cognition of field research


The following survey is based on a few months of special visits to wholesale markets in Bangalore, Delhi, and Chennai. India currently has a complete link for offline wholesale, from importers, first-tier city wholesalers, to second-tier, third-tier, etc. It has a complete link, and each industry and category has a circle. This circle is relatively stable, but there are many pain points. The core breach of the pain point lies in the retailer, in the terminal. They are at the last link of the entire commodity value chain, their profit margins are squeezed to the limit, and they have to bear turnover risks. Of course, they can also be supported by higher-level wholesalers or accounts, but they are very vulnerable.


3) countermeasures


Finally, to sum up my personal views, B2C has been falsified. Social e-commerce is not B2C, but B2B, but all are online. Personally, I prefer to play offline, do supply chain, and supply to offline retail stores. If you play, you must first expand enough retail stores so that the cost of collecting goods from China can be controlled. In addition to China's supply chain, Southeast Asia also has a large number of Chinese factories. Another advantage of Southeast Asia is that the tariff rate is much lower than that of China. The disadvantage is that China has stock, and Southeast Asia is generally a foundry and order-based production.




Development perspective of Indian e-commerce model


3.1 How to look at the development of S2B2C and B2B models in India?


1) S2B2C is a very advanced business model with various restrictions. Personally, I don't think it's necessary to go hard.


2) If it is cut into the supply chain and B2B, I think we must focus on vertical industries, single categories, and deepen. 2B must account for costs and strictly control costs. 2B must make money for every order.


3) Cut the supply chain. If it is to supply the e-commerce platform, the risk of being replaced is too great. I think it can be done offline. The offline problem is to push the ground. The labor and time costs are relatively high, but the barriers high.


4) What kind of domestic model can B2B be copied? I don't think there is any copy right now. If doing cross-border 2B platforms, the seller model is not recommended. Cross-border from China to India, no matter 2B or 2C, the biggest problem is the problem of return rate. Last year, Paytmmall's average return rate was more than 30%, and it was impossible to sell again. Now, the cross-border 2C for the Indian market is basically closed. Still very huge. Last year, we had a surplus of nearly US $ 60 billion in India. The proportion of e-commerce in this total is almost negligible, mainly for general trade. If you use the 2B e-commerce model to cut the cake of general trade and break the relatively stable offline distribution links in India, you still need to try.