Rapidly growing e-commerce giants like Amazon and Walmart-owned Flipkart might be the new kings on the retail block, but as they ramp up efforts to penetrate India’s hinterlands, these firms are increasingly looking for alliances with small businesses — both vendors and manufacturers. All three market leaders —Flipkart, Amazon and SnapDeal — in the Indian e-commerce space have launched various initiatives and incentives to woo small businesses over recent months, including helping them file tax returns and offering them access to credit.
Earlier this month, Flipkart, locked into a tough battle with Amazon, announced a collaboration with online tax services platform Cleartax where it would connect its sellers (most of whom are small businesses) to chartered accountants (CAs) on the Cleartax platform to help them be compliant with the Good and Services Tax (GST) regime.
Just weeks earlier, the e-commerce major had also launched an offering called Growth Capital for its sellers, which would let them access finance through bank loans. The e-tailer partnered with 10 commercial banks and non-banking financial institutions, promising businesses loan approvals within 24 hours for small sellers and money in the bank accounts within another 48 hours. The company had also reduced its seller’s commission at the same time in an effort to attract more seller associations.
“Small businesses in the e-commerce space find it challenging to understand and implement GST changes and adapt to them quickly. Instead of letting that be a barrier to their business, we are coming together with Flipkart to help entrepreneurs,” Aprit Gupta, Founder and CEO of Cleartax had stated. “We are helping thousands of small sellers in non-metro markets overcome a significant hurdle, so they can so they can concentrate on scaling their businesses,” Nishant Gupta, Head of Marketplace at Flipkart added. Flipkart has also stationed 13 regional teams across MSME clusters in India to meet and discuss the onboarding process with prospective sellers.
“The future of e-commerce lies in bringing more MSMEs and smaller businesses online, which in turn will generate employment and investment,” Gupta noted. Analysts say close associations with small partners, either vendors or manufacturers, is critical for e-commerce players, especially since growth areas are shifting to smaller towns and cities. “It is essential that they onboard as many small, local partners as possible, not only to expand reach, but to gain insight into hyperlocal markets. We expect to roll out more incentive and benefit schemes for partners going forward,” said a senior marketing executive.
Flipkart’s rivals Amazon and SnapDeal are also cranking up efforts to onboard more small partners in hyperlocal sectors. Amazon, for instance, announced earlier this week that its sales festival — Amazon Prime Day — will see over 500 new products on offer from small and medium businesses, women entrepreneurs, weavers, and startups under its initiatives: Kala Haat, Amazon Saheli, Amazon Launchpad and Amazon Business.
Prime Day will see participation from Amazon Saheli and Kala Haat entrepreneurs including hand-woven clothing, stationery, grocery and feminine hygiene products by Saheli entrepreneurs across the country, the company said, while merging brands under Amazon Launchpad will have 70 new launches across 25 brands in 12 categories.
SnapDeal, for its part, has also tried to increase the number of small businesses on its platform, with senior vice-president (Corporate Affairs and Communications) Rajnish Wahi noting earlier that the company had added around 50,000 sellers over the last fiscal year. “We are putting together merchandise that is relevant for those consumers (in tier II and III). Those customers were looking at certain price range. If customers find what they want and if they find ample choice they will from tier-I I and III and beyond. So we are expanding the relevant selection for them by getting a lot more sellers who understand that,” he had said.
500 new products on Amazon
Amazon has announced that its sales festival — Amazon Prime Day — will see over 500 new products on offer from small and medium businesses, women entrepreneurs, weavers, etc.