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This new wave of ecommerce is targeting the next 100 million internet users

When small companies dream big
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When small companies dream big

Focused on the non-English speaking population and relying on videos and social platforms like Whatsapp, this breed of ecommerce startups is seen as being discovery-led, unlike search-led platforms such as Flipkart and Amazon. Amid a raft of deal-making, Sequoia Capital-backed BulBul.tv is in talks to raise $6-7 million from Chinese alternative asset management firm CDH Investments, while Sim-Sim is in discussions with Accel Partners and Shunwei Capital for a $5 million round, and Mall91 is looking to raise $8 million from Go Ventures, the investment arm of GoJek.

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Investors new bet
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Investors new bet

WMall, too, has raised $2 million from SAIF Partners and Venture Highway, and is in talks to close its next round of $8-10 million. Others like DealShare may mop up funds from Matrix Partners, Falcon Edge and Omidyaar Network, multiple people aware of the development said. What’s getting investors interested is the view that the next phase of ecommerce is going to be much more discovery-led as opposed to search-led like ecommerce 1.0. Transactions on these platforms are also growing rapidly, but with a lower average order value or AOV.

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How to make it work?
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How to make it work?

Unlike Rs 1,500 AOV on Flipkart and Amazon, these companies rack up around Rs 300-400 as AOV. The key challenge that needs to be solved is how to make delivery economics work. Bulbulshop Shopping Network collaborates with influencers who create videos and content to sell products across categories like kitchen appliances, accessories and lifestyle goods, among others. Sim-Sim and Mall91 bank on a horizontal marketplace business model, connecting the user by creating a local language shopping portal to make the experience more social.

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Banking on female shoppers
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Banking on female shoppers

WMall is a social community-based ecommerce platform where members create content around different products on the platform to enhance the buying experience for other members. “We’re excited to see very strong demand from our users in this segment, particularly women,” said Harmin Shah, founder, WMall. “None of the large horizontal ecommerce companies are currently positioned to become the go-to platform for these users,” he added.

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Focusing on the next gen
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Focusing on the next gen

As the next billion Indian internet users get accustomed to life with technology, commerce experiences will be different due to various factors such as language, community, price points and logistics, investors point out. “Existing models have a high cost of logistics, which makes it difficult to service low average transaction value in non-metros. This makes social or alternate commerce an interesting segment,” said Revante Bhate, a partner at Kalaari Capital’s Kstart.

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Managing the challenges
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Managing the challenges

Monetising the platform will not be easy, say industry experts. Small businesses that focus on user-based business models in India find it hard to raise money. Also, large social media platforms can be a threat, like Facebook introducing commerce front-end tools will pose a challenge. Managing supply at scale, handling customer service issues and adhering to quality standards too would require operational skills. (Text: Aditi Shrivastava & Bhavya Dilipkumar)

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