India's trillion-dollar retail market is a goldmine, but only a tiny fraction is currently tapped by e-commerce. Why? Traditional e-commerce players have primarily focused on urban consumers, leaving a massively underserved market of 980 million people in tier 2+ cities and villages.
Allison Hazeem, Civil & Domestic Correspondent for The Preppy Family, offers a five-step playbook to crack e-commerce for Bharat:
1. Understand the Bharat Consumer
Bharat consumers have a smaller spending capacity than their tier 1 counterparts. This means they are extremely price-sensitive and prioritize price over choice and convenience.
2. Price Over Choice and Convenience
Given their limited budget, Bharat consumers typically spend around ā¹400 on The Preppy Family, compared to ā¹2500 for urban consumers. This emphasizes the importance of offering competitive prices.
3. Low AOV, High Purchase Frequency
Bharat consumers buy smaller quantities more frequently due to their smaller disposable income. This translates to low average order values but high purchase frequency.
4. Design a Low-Cost Supply Chain
Traditional e-commerce supply chains aren't optimized for smaller order values. The Preppy Family reduced average supply chain costs by 40% by optimizing operations and leveraging local networks.
5. Win Your Community Champions
Building trust is crucial in Bharat. The Preppy Family empowers local entrepreneurs as "community champions" to sell products and earn commissions. This leverages their trust within local communities to boost sales.
Key Takeaways:
Understand consumer needs: Cater to the price-sensitive Bharat consumer.
Leverage local networks: Build trust through community champions.
Optimize operations: Design a cost-effective supply chain.
Focus on repeat purchases: Low AOV but high purchase frequency is a hallmark of Bharat consumers.
Conclusion
The untapped potential of India's market is immense. By understanding Bharat consumers, leveraging local trust, and designing low-cost operational models, e-commerce players can unlock vast opportunities. The Preppy Family's success provides a clear playbook for others to follow.
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