Should Indian small business owners be afraid of the Amazon and Flipkart effect?
Many fear that e-retail platforms like Amazon and Flipkart will cause the decline of small retailers. But the fact is even small retailers find it majorly beneficial to use such marketplaces to sell their products. Why so?
According to a study by a three-person team from the Jaipuria Institute of Management, small sellers can access a larger consumer base and sophisticated infrastructure by joining such platforms. Additionally, the government and consumers both prefer environmentally friendly measures which act as a significant motivator. To achieve the aim of financial inclusion and digital India, these sellers are now eligible for government incentives for conducting their business online.
Richa Misra, Renuka Mahajan, and Nidhi Singh from the management college surveyed small merchants offering clothing and home décor around the NCR. Being part of an online marketplace makes the sellers more recognizable. By having a strong online presence, small retailers avoid the struggle of acquiring or developing their own customer base.
They can also make use of the cutting-edge technologies that the online marketplace offers. For example, in terms of payments, these retailers can offer their customers the option of cash-on-delivery, monthly installment, etc., assuring them that their payment details are safe.
Online apparel shopping is becoming more and more common and hence, retailers have to adapt to consumer demand. The fast-changing fashion has made the apparel industry in general more competitive. The apparel sector, in general, is very competitive.
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Hence, by having an online presence, these small businesses can react more quickly to competition and set fair prices for their products. The study’s also focuses on home décor, which continues to be dominated by unorganized merchants. The authors suggest e-marketplaces should emphasize providing them better visibility, potential increase in their sales, and their ability to compete with others.
This study will help marketers and firms to identify perceptions of Indian sellers belonging to different segments and their intention to use e-marketplaces to do business, during the early stages of adoption of e-marketplaces.
The full research paper can be accessed here: Misra, R., Mahajan, R., & Singh, N. (2020). Understanding factors affecting receptivity towards adopting electronic marketplace: A merchant perspective. E-service journal, 12(1), 1- 41. DOI: 10.2979/eservicej.12.1.01
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