How an Indian
startup is
taking eCommerce to the villages
India lives in its villages, and with more than 600,000
villages, it is a market that every vendor wants to cater to. However, despite
the size of the market, it is an extremely fragmented market and difficult to
reach. Inthree Access Services, which owns Boonbox, an eCommerce portal, has
taken this challenge head on and is now reaping the benefits of being a player
with huge focus on rural India. To get more details on the strategy adopted by
the firm, Dataquest spoke to R Ramanathan, the Founder & CEO of Inthree
Access Services
Some edited excerpts:
Please tell us about Boonbox.com?
Boonbox.com is essentially a rural eCommerce portal. From many
years we have been in the rural distribution space and have distributed large
number of durables products particularly solar lamps.
Rural market is typically one of those dark spaces of India
where factors like issues of the last mile reach, poor connectivity, etc,
forces marketers to keep working in the urban and metro areas. So for us it was
the white space as it gives you the opportunity to develop the business model
that’s unique and you don’t face much competition. Otherwise you need to do
what everyone else is doing.
So we chose this space and our whole strategy was to work with
organizations who are already present in rural markets and have a good
influence over customers. So we worked with NGO’s, micro finance institutions,
agri post, department of post. These are all organizations that have a captive
customer base, enjoy high credibility with the customers and also have a fair
amount of influence over the customers. So that’s the way we have been working
over time.
The typical challenges related to the rural marketing are
customer acquisition. To acquire customers at a low cost is a big challenge as
this market is fragmented. Today there are over 600,000 villages in
India and most of them have population less than 2000. So it’s a very
fragmented market and difficult to reach, so we learnt how to access customers. We
manage cash collection and lastly we were able to hold last mile reach and the
delivery of products and then servicing of products.
What are the products that rural customers are
buying from your eCommerce portal?
Typically, while we were giving them solar lamps and water
purifiers, they were telling us to give mobile phones and television. It was
very difficult for us to relate to that in the beginning but then it occurred
to us that in our model we were pushing products which we thought they need and
they definitely need these products and solar lamps have large amount of
customer pull because the situation in the southern states has not been great
in the last few years. But then we thought you know it is good to move to a
model which is dictated by customer preferences.
We have been funded by Indian Angel Network last year in August.
We decided that we will work on an assistance sale model, because the rural
customer is unlikely to go to the internet and click. You would need somebody
to click on their behalf and take the order.
Some of the products we have in Boonbox.com are consumer
durables like television, refrigerator, electronics like mobile phone, cameras,
cookware like nonstick Tawas and induction stoves. Induction stoves is a great
example of how aspirational the rural customers are.
How many products have you approximately
delivered in these areas?
We moved into an eCommerce mode in March. From selling 100s and
1000s of solar lamps we moved to selling products like 700 refrigerators so
far. We have also sold some television, canon cameras, induction stove,
nonstick Tawas, sarees and artificial jewelry.
Are you facing any competition in this space?
It’s really a white space market. There isn’t much competition
in the market. Competitor helps expand the market and develop the market but
right now it’s really white space market. But we do expect that as we pioneer
this space, there are more people coming in because that makes lives easier for
the rest.
How mobility is helping your business to
expand?
In fact, app is probably the single biggest selling tool for us.
The app works as an e-catalogue. So we have assistance sales agents all over
the place starting with our partner organizations like NGO’s and India Post.
They are customer facing and they show the e-catalogue through the mobile app.
This becomes an essential feature as a selling tool. Through the apps, we can
also take the orders and the data connectivity is very poor in India. With
regards to this we have developed the app in such a way that we can actually
take order even without data connectivity.
Today the eCommerce market is expanding by
leaps and bounds. So what do you think will be the future of this space?
Very clearly, the way the market has grown so far, it’s not
really sustainable because huge money is spend into customer acquisition.
Customer acquisition is critical only if you are able to retain the customer.
It makes enormous sense to acquire customers whatever the price provided you
are able to extract the lifetime value of the customer.
So in our business, we don’t want to mess up the market, as it’s
a virgin market. It’s not been spoilt by other players so why would we go and
risk our game. The problem we are solving is the problem of access as they
don’t have access. It’s important to acquire customers and retain them. It’s also
important to avoid the discount game. It’s important to be a niche player for
example the rural space is massive. You need to be different and not work in
the same space as it’s not a level playing field. It depends on how specialized
you are as an eCommerce player.
http://www.dqindia.com/rural-market-is-the-next-hub-for-ecommerce-players/
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