2. Evolution of Retail Formats
Historic /
Rural
Reach
Source of
Entertainment
•Weekly Market
•Village Fairs
•Melas
Traditional /
Pervasive
Reach
Neighbourhood
•Convenience
Stores
•Mom & PoP
•Kiranas
Government
Supported
•Availability
•Low costs
•Distribution
•PDS Outlets
•Khadi Stores
•Cooperatives
Modern
Formats
• Total Shopping
•Experience
•Efficiency
•Super Markets
•Departmental
Stores
•Shopping Malls
E-Retail
•Convenience
•Discounts
•Many categories
•Marketplace
Entertainment Convenience
Single Brand Multi- Brand
3. Burgeoning Retail Growth
Total Retail market to double in next 5-7 years.
Organized retail growing at a much faster rate
despite downturns and infrastructure challenges.
E-Retail industry growing exponentially and
expected to reach $60bn in next 5 years.
FDI, one of the key growth enablers.
Demand driven by Tier – 1 cities primarily.
Improving supply chain & infrastructure in
Tier-2 cities to boost supply.
408
445
486
530
578
630
796
2009 2010 2011 2012 2013 2014 2018
IndiaRetailMarket
GrowthTrend(USDbn)
Penetration
oforganized
Retailing
5-6% 7-8% 10-12%
Source: India in Business website
4. Largely unorganized
• Strong potential exists to systematize the Unorganized Retail in $630 Bn. Market.
• Top 3 Prominent categories almost same in both.
• Urban population and hence Tier 1 cities are the largest consumer (40%
approx.) of the total retail market.
• Top 24 cities contribute to 56% of total retail market & 30% of the overall
market
92%
8%
6. For e-Retail Company, it means…
Customer’s
want …
Tie-ups with very large number of sellers necessary.
Backend seamless integration with all sellers so that
appropriate discounts can be offered.
Partnerships on logistics and supply chain side to
ensure quicker delivery.
Innovative model to cater to the Rural population such
as ITC e-Choupal.
Coopetition with organized as well as unorganized sector.
A huge growth potential in the Indian context.
Tier - 2 & Tier - 3 cities largely untapped from organized retail perspective.
7. Company’s readiness
S
TRENGTHS
W
EAKNESSES
O
PPORTUNITIES
T
HREATS
• Continuous
Innovation
• Good branding
• Good service &
convenient
processes
• Wide product
categories & deals
• Good funding &
recognition
• Services not available
in all cities.
• Heavy dependency on
internet or telecom
connectivity.
• Markets devoid of
internet
• Persuade Customers
reluctant in shopping
online
• Strategic
partnerships for bulk
sales
• Can be subjected to
frauds
• Shipping by sellers to
customers without
merchandize
verification.
8. Way forward - Cities Focus
Tier 1, 2, & 3 cities having
specialized o/p
Leverage on economies of
scale
Include Personalization in
products, whenever required.
Most populated cities
Many merchants grew in
proximity because of the
demand traditionally.
Infrastructure and hence
logistics management will be
simpler.
Overlap with areas of
consumer demand & hence
Faster delivery
“Rurban” cities
Can leverage on good
infrastructure in the adjoining
city
9. Way forward - Categories to onboard
on the basis of potential consumer segments
Demographic
dividend
Opportunity size Seller Categories
Growing number of
millionaires
0.15 mn.
Working Population 600 mn.
Youth 500 mn.
Middle Income Households 75 mn.
“Rurban” Consumers 336 mn. •Personal care
•Food & Beverages
•Packaged Food & Beverages
•Luxury products & Consumer
electronics
•Personal care, beauty & wellness
•Packaged Food & Beverages
•Apparels & Mobiles
•Personal care, beauty & wellness
•Packaged Food & Beverages
•Apparels & Mobiles
•Personal care & Home care
•Luxury products
•Luxury consumer electronics
•Home furnishings
10. Route to Market for on-boarding sellers
Call center – outbound & inbound
Mass media campaigns & Digital marketing
Email blasts
SMS blasts
Print & TV campaigns
Direct Sales team (FoS)
Build more Strategic Partnerships and upsell/cross-sell at
every touch point
Run Member-get-Member / Affiliate schemes and Loyalty
Management programs to have more “live” sellers.
Increase number of categories from each seller.
Promote convenience of Seller On-boarding app on various
mobile app stores
11. Call Center Business Model
1. Cost & Time savings in hiring and
training of staff
2. No need to invest in high end
infrastructure and technology
3. Well trained workforce to handle
customers
4. Easy to scale up and down
1. Risking the brand identity
2. Gaps and challenges in passing along
new technical and product information
1. Proper communication of brand
2. Vital insights from the customer
conversations
3. Integration of call centre with
organisation’s resources
1. Lots of investments in terms of money
and time for setup, technology, hiring
and training of workforce
2. Managing attrition and morale
boosting will be resource intensive.
3. Not easy to upscale & downscale.
Advantages Disadvantages
Outsourced
Inhouse
Considering the scale of operations, Blended outsourced call center
model is chosen for lead generation & first time connect with sellers.
Outsourced partner will be chosen basis the following criteria -
Years of experience
Quality of workforce
Billing Procedure
Clients Handled
12. Key Metrics to be tracked
Service
Measures
Accessibility
•Blockage; hours of
operation; abandons;
self-service availability
Speed of Service
•Service level; average
speed of answer;
longest delay in queue
Quality
Measures
Resolution
Metrics
•First call resolution
rate; transfer rate
Call Handling
Metrics
•Etiquette; knowledge
and competency;
error and rework rate;
adherence to
procedures
Efficiency
Measures
Resource
Utilization
•Agent occupancy;
shrinkage; schedule
efficiency and
adherence; availability
Contact Handling
•Average handle time;
after call work time;
on-hold time
Profitability
Measures
Sales
•Conversion rate
Use of financial
resource
•Cost per call
13. Build Strategic Partnerships
Tie ups with Banks & NBFCs to provide loans and
credit to needy sellers.
• Can be offered as a premium service to the
sellers
Collaboration with National Retail Giants such as
Croma to ensure better logistics management and low
cost to serve.
Partner with MSME and Retail Associations of
target cities to build quick momentum.
Agreement with Justdial / Getit / ZatSe for cross-selling memberships.
More tie ups on logistics management such as India Post.
14. Keep an Eye on…
Competitive advantage being eroded by Low Entry
Barriers
Regulatory Policy induced barriers
Enabling infrastructure on the telecoms and
logistics front
Skilled manpower
15. Do’s & Dont’s
• Make it easy for seller to onboard.
• Provide Good service, on-time payment
clearance to them.
• Maintain information transparency.
• Good integration with the seller’s online
systems for seamless order pass-
through.
• Membership incentives and loyalty
campaigns for sellers.
• Embrace speed and innovation.
• Ignore seller’s view.
• Make a cumbersome lifecycle process.
• No DR site for any of the functionality.
• Onboard sellers without proper verification.
16. In Summary…
Retail sector moving from unorganized to organized to online.
Onboard sellers in Tier – 2 & 3 cities for next big leap.
Treat sellers as partners and focus on Food, Apparel, Consumer electronics &
durables, personal care & footwear sectors in unorganized sector.
Focus on visually appealing products in categories with no/little personalization.
Tight coupling to seller’s systems for offering best pricing and faster delivery.
Increase the lifecycle of sellers through information transparency and constant
engagement. Once on-boarded, mine the sellers for more categories.
Build a strong multi-pronged strategy through Outcalling, Digital marketing, Media
Campaigns and Strategic partnerships for on-boarding 30K sellers/month.
Continue with thin and flat organization structure for flexibility and innovation. But,
don’t outsource the key processes and IP.
Keep high vigil on performance of the outsourced call center and make sure
essential software such as WFM, Predictive Dialers are implemented for higher
productivity.
