Mar, 2015     

E-tailing – A seller Perspective

Led by the boom in the e-tailing industry, the number of sellers registered with leading marketplaces is expected to grow multifold

Number of sellers on board e-tailing marketplaces

Estimates of number of sellers updated till Dec 2014
Seller Count

Key Insights

Rapid growth in number of sellers planned

Most online marketplace players are looking at 200%- 400% growth in number of sellers in 2015, as they strive to expand categories and selection

Incentives being offered for seller onboarding

Players are looking to offer financial assistance, training and operational assistance to entice sellers on board their platform

Selling online has led to increased customer reach and rapid growth in turnover for sellers of various sizes across product categories…

Increase in seller reach from selling online

Seller Verbatims

Q. How has selling online impacted your customer reach?

Small Apparel Seller

“From selling to customers in barely 3-4 cities to now being able to sell Pan-India, we have been able to increase reach and sales of our ethnic wear in a big way”

Large electronics Seller

“Our geographic reach has seen a growth of nearly 300- 500% after we started selling online in partnership with a leading e-tailer”

Small Mobiles and Accessories Seller

“E-Commerce has helped us come a long way from being limited to selling within Mumbai only to now shipping our mobile products including designer accessories and chargers to more than 500 cities across India. Online retail has helped us double our turnover in a very short span of time”

…It has also led to a significant reduction in the marketing, warehousing and manpower costs for sellers

Areas of reduction in seller operational costs

Averages across N=110 Sellers

Marketing Expenses

Marketing Expenses

25-50% reduction in expenses from when only offline sales were being made

  • With e-tailers providing significant customer reach and high seller visibility at nominal prices, marketing expenses have significantly reduced for online sellers across categories

Warehouse Rentals

Warehouse Rentals

5-20% reduction in expenses from when only offline sales were being made

  • Warehousing costs have reduced as sellers increasingly store goods in warehouses managed by e-tailers
  • The drop has been especially steep for categories like laptops

Manpower Expenses

Manpower Expenses

5-10% reduction in expenses from when only offline sales were being made

  • Online sellers feel a lower need for warehousing and sales manpower, which has helped them trim expenses on salaries/wages

Average and spread of seller commissions is nearly double in apparel category vs. in electronics; highest commissions are charged by Snapdeal

Seller commissions across categories and player ranking

Key points

Range of seller commissions charged by leading horizontal players

seller commissions

A strong focus on meeting certain key needs of sellers can help e-tailers ensure a high degree of seller satisfaction

Key seller needs/wishlist

Key points

  1. Strong support should be present across warehousing and logistics processes from the e-tailer
  2. Returns policy should be simplified and clearly laid down
  3. The payment processing cycle should be shortened and the invoice should be clear and detailed
  4. The user interface on the seller portal/app should have high clarity and be fast responding
  5. The seller support team should provide comprehensive training in online selling and should quickly respond to issues

Ths document covers the perspective of sellers towards the key e-tailing players in India. It includes the impact of selling online on sellers, the commissions charged by the players and a view on the seller strategy implemented by the players.