5 Reasons Online Selling Will Work In Small Towns – Sandeep Varaganti



Just five years ago, sellers of consumer goods in small Indian towns depended almost entirely on festivals and holidays. Local artisans, weavers, small and medium-sized businesses in India outside the metro awaited the return of migrant workers to their towns during the sowing and harvesting seasons. They were waiting for families to come home during holidays and festivals, and for people to come during tourist season, for sales to pick up. Ten years ago, with the advent of e-commerce, these challenges were quickly addressed, helping SMEs compensate for seasonality and ensure business continuity throughout the year.

Currently, the unprecedented impact of Covid-19 has once again disrupted the economy. The crisis has had a huge impact on small businesses, especially production-based ones, as they are unable to continue operating to deliver finished products and meet strong consumer demand. The sources or suppliers that SMEs rely on are in regions where the CoVid impact is higher and where transport barriers – by air, road or sea – further hamper these businesses. Dependence on larger players for services critical to the performance of SMEs also leads to disruption in corporate networks. This is where e-commerce comes to their rescue.

By bringing buyers and sellers together in a common online marketplace, e-commerce helps SMEs even in the smallest towns of India. Sellers can now make a sale to a buyer who lives on an island in the Andamans, or in the mountains of Ladakh, without worrying about the pandemic affecting business!

On a related note, here are five reasons that will make selling online in small towns work in the new normal.

Expanded customer reach

One of the biggest opportunities offered by online sales offerings is that merchants can expand their reach through the huge customer base or traffic established by ecommerce companies. For example, the typical catchment area of ​​an offline store would be approximately 5 km. Expanding it further would require additional investment in new stores, more staff, additional utility costs, etc. They should also be spending a fair amount of money on local marketing and advertising.

E-commerce, on the other hand, makes it easier for sellers to attract customers. Online marketplaces have taken many steps such as marketing efforts to educate customers, advertising support for products sold on the platform to attract customers and enable digital payments. SMEs can also ride the wave created by the advertising campaigns of large companies that drive traffic to e-commerce websites. Online marketplaces also help sellers in small towns with listing and other operational work.

Better working capital management

Selling online offers many advantages over selling offline to merchants in Level II and III cities. The most obvious being that salespeople do not need to depend on physical storefronts for business, which increases overhead costs. Instead, they can use more profitable warehousing solutions offered by e-commerce companies to hold inventory. Such an arrangement can also help them plan inventory, make timely payments to suppliers, and only keep petty cash when needed. Over the past decade, the cost of cataloging products for e-commerce marketplaces has also dropped significantly, making it a more viable alternative.

The first digital perspective of customers and their tendency to search for products and services online has spawned many start-ups that are propelling India’s e-commerce boom by enabling small town businesses to connect. They handle everything from sourcing products in domestic and overseas markets to last mile delivery. Such support helps SMEs scale faster and become more efficient.

Impact on revenues and profits

Engagement with digital technologies such as social commerce and e-commerce gives businesses greater market reach and accelerates revenue growth. According to a KPMG report, digitally engaged businesses are growing twice as fast as offline businesses. Not only does digital activation help businesses scale their operations, it also helps them invest in upgrading processes and improving communication, paving the way for increased efficiency.

The advent of digital payments

Digital technologies are transforming the landscape in which SMEs operate. This is driven by consumers moving online – a huge cluster that increasingly expects to discover and interact with businesses online.

The hassle-free online transactions conducted by UPI are one of the reasons that small town and village sellers are entering e-commerce. To put it in perspective, 1.25 billion UPI transactions worth 2.06 lakh crore INR were processed in March 2020. With widespread acceptance of digital payments, sellers are spared the long lines of payment. waiting banking or managing banknotes, especially in difficult times such as these. Leveraging e-wallets has also allowed them to manage their finances at their fingertips, ensuring that business is not affected.

Simplified supply chain management

With Covid-19 causing widespread exit concerns, e-commerce has helped small businesses meet customer needs. The large investments made by e-commerce companies in advertising and supply chain expansion make it much easier for sellers to take advantage of these initiatives without having to dip into their own pockets.

As the world witnesses a paradigm shift in business models, SMEs will now need to collaborate with established players, use a combination of offline and online customer touchpoints to support their business.

According to industry reports, thanks to internet penetration in non-metropolitan Indian cities, rapidly increasing technology and data consumption, improved logistics and new social distancing standards being made. needed by CoVid, online sales will show massive growth in the days to come. In addition to the efforts of government and the industry as a whole to support this sector, SMEs will also need to establish a strong digital foundation to become agile and be better placed to serve their customers as the world embraces the new standard of staying ahead. the House. Digitization will play a huge role in paving the way for a future led by empowered SMEs.

Disclaimer: The opinions expressed in the above article are those of the authors and do not necessarily represent or reflect the opinions of this publisher. Unless otherwise indicated, the author writes in his personal capacity. They are not intended and should not be taken to represent official ideas, attitudes or policies of any agency or institution.



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