Niche marketplaces – 5 Advantages over other marketplaces

To Niche or not to Niche, that is the question.

It is common knowledge that marketplaces online are the next big thing of retail across the globe. It cannot be truer for a market like India where even cars and realty sites are being sold on marketplaces (Snapdeal’s Mahindra Xylo launch for example).

Conventional wisdom and a cursory look at the Indian online market place shows up the biggies in this market- Flipkart, Snapdeal, and their “videshi”cousin Amazon- umbrella stores that sell everything from a safety pin to luxury goods at prices no one can imagine. Yet, look closely and it is not difficult to dig out more focused single product type marketplaces that cater to specific needs of the consumer. Which one works better for you, the seller?

Big Marketplaces need Big Money

Have you noticed the number of ads one sees in an hour about sales, offers, discounts on Flipkart, Snapdeal or Amazon? Wonder why these already popular sites invest heavily on advertising? Well, that is the curse that comes with the territory. Being a large marketplace with a plethora of products on offer, these companies need to spend heavily on customer retention and engagement.

A Flipkart needs to make the extra effort every single time to remind its consumers that they sell everything, not just mobiles or books. To ensure a recall each time the consumer thinks of a purchase, Flipkart and its ilk spend billions of customer acquisition and retention.

On the other hand, a niche marketplace just has to spend enough to be recalled everytime the user thinks of purchasing what it sells- in other words, it just looks to be synonymous with the product it sells. Take for example, buying jewelry online.

When you think of buying jewelry online, which site comes to your mind first? CaratLane or Jewel Cart? Do you even associate Flipkart with Jewelry? Yet, Flipkart does sell shiny metal and stones. So then what is the difference?

Buying a piece of jewelry from Flipkart would mean the following- limited range in terms of prices, designs, craftsmanship. Limited offers, limited customizability, limited inventory. A niche site like Carat Lane on the other hand, is dedicated to give you the best value for your money when it comes to jewelry and goes all out to make sure you find what you wanted. See the difference?

The Niche advantage

The online marketplace is an ever changing monster that is difficult to tame; and given the current scenario, niche marketplaces clearly have an edge for retailers over the bigger sell-all marketplaces. the There are many things that niche maretplaces are doing just right to ensure that despite lower spending on enticing the customers, they are growing and growing fast.

Economies of scale

For small businesses forced to compete against the scale economies of larger players like Snapdeal and Flipkart, a niche marketplace offers an opportunity to target the core set of customers and make an impact.  The choice to pursue a niche market ensures success since it entails optimal usage of resources both financial and otherwise. It entails you to employ new and untapped resources to generate newer revenue streams, a flexibility that bigger competitors do not offer mainly owing to their large sizes.

Distinction and relevance

Niche marketplaces clearly identify and understand their consumer segment. They have a clear understanding of what problems the consumer faces with regards to the product and its purchasing process and gear up to solve these very issues. Zivame, the popular inner wear store for women for example, understands the importance of finding the right size and fit for a woman. Also important is the idea of finding these in the comfort of privacy. Addressing these issues in the way the site is built and in their communication messaging, Zivame has built its brand easily as the go to place for inner wear as opposed to a Myntra or Flipkart who also stock the same product.

Personalization

Niche marketplaces are all about providing high quality with personalized attention. Take Lenskart for example, where the site offers free at home eye checkups before you order with them. Or Jewel Kart that lets you touch and feel the jewelry at home before making the purchase. Dedicated customer service that knows and understands concerns related to the product and not offer the standard reply “ we are looking into it” goes a long way in assuaging fears and retaining loyal customers.

Consumer connect

Big retailers are forced to create a neutral sleek experience for consumers. Niche sites on the other hand create an experience suited and tailored for the product they are selling- their narratives; personalities ape the target segment perfectly and address their needs and wants. Thus they create a stronger recall value in the minds of the consumer as opposed to the big marketplaces.

Product Layout

Giant online retailers typically have literally millions of SKUs, but niche sites often have stronger product layouts within their specialties. In the same space on the screen, a niche site is able to provide better and more information and experience as opposed to a big retail site. The number of options on flipkart for home décor, as opposed to urban ladder or bedbath and more is proof enough.