Target small cities for growth, Jabong’s latest strategy

Gone are the days when internet was a luxury that was available only in the metros. Today, not only has internet become a necessity, it has also become available in most parts of India. With even mobile internet being offered by service providers to subscribers in most regions, internet has penetrated into almost all sections of society.

With increase in internet penetration in the smaller cities as well, the number of online buyers from these cities have also increased. In five years, Jabong expects the sale from these tier 2 and 3 cities to take over the sales from metros and other urban cities.

Buyers from tier 2 and 3 cities turn to online shopping options due to the following reasons:

• Most tier 2 and 3 cities still do not have as many branded stores or variety of shopping options as in the case of cities. Hence, buyers, especially the younger ones, turn to online stores and marketplaces for the variety of shopping options available.
• Nowadays, brick and mortar stores most often do not give as much discount or promo offers as the online stores. More buyers turn to online shopping for cheaper shopping resulting in more savings. 
• Brick and mortar shops do not offer payment options like EMI. Almost all online marketplaces now offer EMI payment options on a number of credit cards which makes it more convenient for the limited income people.

With a double-digit growth already, Jabong is confident of further growth especially in the apparel segment due to the mismatch in demand and supply. The number of brands offered has increased from 700 last year to 1000 this year. It has also introduced collections from leading designers across the country.

Sellers should target smaller cities

With limited access to variety in shopping options, more buyers will definitely turn to online options for their purchases. A number of internet access options are available to the tier 2 and 3 cities also today, leading to more access and exposure to the options available to them.

Market penetration will be easier now than five years later. They may not yet have explored too many options. New options would increase their curiosity and interest, leading to higher conversion rates.