Indian ecommerce marketplace giant Snapdeal has taken a massive pioneering step towards expanding its business in the unexplored rural areas by resorting to assisted ecommerce business model and also offering sufficient financial support to all its sellers to aid them in dealing with the supply constraint problem.
Since one of the main obstacles in expanding business in the rural areas is access, i.e. the acquisition of order and its subsequent delivery to rural people, Snapdeal has taken the initiative to follow an assisted ecommerce business strategy in collaboration with several logistics agencies. The concept of assisted ecommerce is nothing but a kiosk counter where people can come in person to place an order and receive the same from there, instead of delivering the orders to customers’ homes directly as is the usual practice in urban areas.
According to The Financial Express, one of the ongoing pilot programme involves the tying up between Snapdeal and the financial inclusion solutions company Fino PayTech to set up approximately 5,000 e-commerce kiosks all across 70000 target rural areas and 65 cities in India within a timeline of 2015 end. In addition, to that the marketplace giant also picked up minority stake in logistics firm GoJavas to further strengthen the last-mile delivery operations, according to a report published in dnaIndia.
In order to meet the expected increased demand of genuine and cost worthy products and to bridge the gap between demand and supply, Snapdeal is aggressively looking for even more logistics and sales partnerships. In fact, according to the co-founder and CEO of Snapdeal Mr. Kunal Bahl, the company is looking forward to take over 1 million sellers onboard over the next three years time to meet its aggressive sales targets.
The spokesperson also mentioned that they have pointed out working capital requirement as the major obstacle regarding supply constraint through a research carried out by the firm where they have lent approximately INR 100 crore to its sellers through capital assist programme and found out that it led to 2-3 times sales increase in a 60 day period after the loan sanction. In order to address this problem in meeting the demand and keeping a smooth supply, they have approached Small Industries Development Bank of India (SIDBI) for hassle free and cost efficient financing options for its registered sellers.
The marketplace authority also silenced all the criticism from some of the critics including the big shots like Kumar Mangalam Birla who pointed out and critisized this move and also questioned the core sustainability of the ecommerce platform as a whole. Mr.Bahl simply shrugged off the skepticism by siting out the example of mobile telecom expansion and also challenged to witness the sharp growth of this booming industry in the decade to come
Although regarded as one of the most quickly developing countries in the world, according to a report published this year a staggering 72.20% of the total population still lives in the rural areas and is still withdrawn from various economic and technological advancement benefits. As the initiative of financial inclusion by RBI and Government of India was able to explore the massive potential of the rural areas, Snapdeal is also looking at the same direction to cash in on its business and sales front by untapping this massive market.