Mcom­merce Cos Feel their Num­ber has Ar­rived Fi­nally

Co says new guide­lines have cre­ated a level-play­ing field for young play­ers who see them­selves as an en­abler for brick-and-mor­tar mer­chants

The Economic Times - - Diruption: - Vishal.Dutta@ times­group.com

Ahmed­abad: The new ecom­merce guide­lines have boosted the growth prospect of up­com­ing mo­bile ecom­merce play­ers that con­nect brick-and-mor­tar mer­chants di­rectly to cus­tomers.

Play­ers like Or­derr, m1-Or­der, Good­box and SnapBizz say that the new ecom­merce guide­lines have cre­ated a level play­ing field for young mo­bile ecom­merce play­ers who see them­selves as an en­abler for brick-and-mor­tar mer­chants. It has also opened the gate­way for more mer­chant ac­qui­si­tions, faster scal­ing and fund­ing.

While last week’s gov­ern­ment an­nounce­ment has left some large ecom­merce play­ers flum­moxed, up­com­ing mo­bile ecom­merce play­ers are in a cel­e­bra­tory mood. “I was very thrilled af­ter the govern- ment came out with the clar­i­fi­ca­tion,” said Abey Zachariah, CEO, Good­box adding that while ecom­merce giants would find repli­cat­ing its model dif­fi­cult, younger play­ers will grow faster now. “The new guide­lines seems to be in our favour. Scal­ing up would be faster,” says Nipun Arora, founder, Or­derr. Ac­cord­ing to Arora, the en­abler busi­ness model does the same thing what the large ecom- merce play­ers does, but with less staff, less cap­i­tal, no cash-burns and no dis­counts, which will al­low en­ablers to scale faster.

The new rules have not only barred ecom­merce play­ers from giv­ing dis­counts di­rectly but they may also not be able to of­fer cash­back of­fers to draw cus­tomers. More­over, the guide­lines re­strict ecom­merce play­ers to get only 25% of sales from one ven­dor.

“Dis­counts go­ing away is a ma­jor relief for small mer­chants as this gives them a level-play­ing field,” says Te­jin­der Oberoi, founder di­rec­tor, m1-Or­der, an Ahmed­abad-based startup. Oberoi ex­pects more mer­chants to join his plat­form as fear of dis­counts and cash­back of­fers by big­gies will fade away soon.

SnapBizz, which fo­cuses on gro­cery re­tail­ers, be­lieves that now lar- ger ecom­merce play­ers will have to em­brace hy­per­local (mer­chant) play­ers in or­der to scale up. They will need the mer­chant to be dig­i­talised and for that, they will need to join hands with en­ablers.

“We were al­ready run­ning pi­lot projects with large ecom­merce play­ers, but with this new devel­op­ment we now ex­pect to see ac­cel­er­ated moves from them,” says Prem Ku­mar, CEO, Snapbizz.

These star­tups are also hope­ful of us­ing the FDI route to quickly raise funds. “There was a fund­ing crunch in the mar­ket. This won’t be the is­sue any­more with FDI al­lowed in mar­ket­place ecom­merce play­ers and we are the one (mo­bile ecom­merce) who are com­pletely com­pli­ant with the new ecom­merce norms” said Abey Zachariah of Good­box.

Last year, Good­Box raised funds from Nexus Ven­ture Part­ners and in its pre-Se­ries-A round it had raised funds from Ma­ni­pal Group, with par­tic­i­pa­tion from Tax­iForSure co­founder Aprameya Rad­hakr­ishna and redBus co­founder Cha­ran Pad­maraiu.

Sim­i­larly, SnapBizz in re­cent years has raised funds from Jun­gle Ven­tures, Tau­rus, Konly Ven­ture, Blume Ven­ture, Qual­comm and oth­ers. In Fe­bru­ary, Ratan Tata in­vested in SnapBizz.

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