Have you chosen the right products to sell online? [Part 1]

Customers today have a Mind map of different e-commerce sites for different categories or different objectives. For example, books and electronics from FLIPKART and Amazon, fashion from Myntra, discounted products from Snapdeal and so forth. Only about 19 percent of a given audience would leverage good old Google to discover the best site for a particular product or category.

Given the standardized nature of products and well-defined warranties, a YourStory survey indicated that electronics have turned out to be the most frequently purchased category (32 percent) followed closely by clothing and books. Also, nearly 37 percent were willing to spend between INR 2000 to INR 10,000 in one transaction while most surprisingly, 34 percent were willing to go up to INR 10,000 to INR 50,000! When asked about the most expensive product purchased online, electronics came up on top by a huge margin (78 percent). Jewellery and home décor are yet to catch up in terms of ticket size of transaction.

What do the Sellers have to say?

So every online seller will have a story to tell and why they chose to stay in the business they are in, be it those who have decided to appease the masses, those chasing niche segments or even those who purely followed their passion, the reasoning of an online seller that decides the category of ecommerce business is an interesting perspective.

Calvin from Caratlane says “Aspects to look into while selecting the domain to play in would be 1) To be passionate about the category along with deep understanding. 2) A solution to a personal problem that could be extrapolated to many others as well. 3) A new way of delivering value to a vast majority”

Even Krsna Mehta, Design Director, from India Circus agrees that a person’s passion towards something is a good reason to INVEST in a business idea. Looks like he also found a solution for a personal problem that drove him to set up his business. He says, “Being a person who is highly interested in good Home Décor, I often found that there wasn’t ANY OPTION to be able to buy well designed things at affordable prices, especially things with Indian designs. The idea and concept was born out of the lack of great Indian designs at great prices! I wanted to make and promote Contemporary Indian design and culture. A larger section of middle income Indians couldn’t afford to have well designed products. Thus an idea was born and from a simple concept it grew and has become what it is.”

A fascinating trend that has been catching up is when online sellers try to get into the unorganised sectors of the market and bring in brand value and uniqueness to typical products of daily use. Customers are fining value in making such purchases rather than finding a local vendor and having doubts on trusting their products. From Bartanwale to sellers like FabFurnish, this is exactly what has clicked for them in their businesses.

Shilpi Shukla, the Communications head at Fabfurnish.com says “While the largest organized player is only $200-300 million, Indian home furniture & furnishing market in itself is worth more than $18 billion! So there’s a huge potential to build a scale business in this segment. Besides, shopping for home in local Indian markets, even in metros, is quite a painful process owing to its largely unorganized setup. This is where the idea of by helping people beautify their homes, by venturing into this untapped segment, clicked to us.”

What about the Competitive Landscape?

Competition is what one cannot ignore at all when deciding the category and products to INVEST in. Unless you’re selling something revolutionary, there will be other websites that sell very similar, if not the same, products. This means that you need to have a firm understanding of your competition, that way you can stand out from the crowd while ensuring you’re on par with the rest of the industry.

It is important to make a competitor analysis in the market. You could try these approaches:

Make a list of competitors

The first step is identifying who your competitors actually are. You can do so by performing a basic web search for the products you intend to sell. From there, you can see what other businesses exist in your space.

Categorize your competitors

Once you have your list together, break it into logical categories. For example, you’ll have direct competitors that offer the same products as you, and larger competitors, such as big retail sites.

Visit their websites

By visiting your competitors’ ecommerce sites, you’ll get a quick glimpse into the products that they prominently feature, along with information on their price points, branding, customer reviews, etc.

Sign up for their emails

If your competitor has a place to subscribe to their emails, go ahead and do so. This allows you to see what promotions they’re running, and on which products. If they don’t have an email signup, try referencing their social media channels instead.

Source: Volusion

We also spoke to some sellers regarding how they perceive competition and what would be the tips to fight the battle. Some talk about adding value while others talk about how their own advantages helped them in the market.

Sneha says “Our major competition right now is offline furniture and décor markets. Also, any e-commerce player dealing in home furniture or furnishings is our competitor. We prefer healthy competition as more competitors would help us in developing this nascent online market faster. We differentiate ourselves with our niche and carefully curated collection, our product imagery, multitude of payment options offered, and superior customer service. Moreover, we are very innovative when it comes to marketing, and that has given us an edge over our online competition.”

Calvin says “Competition is inevitable. If it’s a lucrative Blue Ocean you are creating, you could expect competition building up immediately. However you would have the benefit of being the 1st mover.”

Looks like the best way to beat the competition is to venture into niche segments where the competition is fairly lesser. Many online sellers are chasing these segments so that they can make a strong foothold before more players enter the market. They are also finding unique value propositions to sustain in the competitive market.

So should you go niche? What strategies can you use to find the right products to sell online?

Check out this space tomorrow!