How E-commerce is Helping Local Manufacturers Accelerate Growth

Entrepreneur

Today, for many manufacturers finding the right sales channels is a problem. While their expertise lay in production, their access to consumers was through a layered and often opaque distribution channel. In the physical world, the manufacturers had to run from pillar to post to convince retailers to sell in their store.

Of late, many manufacturers are able to launch and build their own brands and boost their sales from online orders. Not just an additional sales channel, but online is the only channel for many manufacturers who want to build their own brand and not sell through other retail stores.

In fact, when tapping online channels, they often used intermediaries as well, since many parts of the ecommerce were not well-understood. However, as online channels have made the use of their platform easier, many manufacturers have dispensed with intermediaries for online sale and now sell directly on ecommerce platforms. The result – manufacturers sell faster/have greater margins and a better understanding of consumer needs which helps them get direct feedback/ability to respond much faster.

The upside is also that online channels take care of most support functions for manufacturers, who decide to sell online. These include marketing, customer support, logistics and packaging. Lastly, ecommerce players have been able to provide access to larger markets way beyond erstwhile geographical limitations.

Getting Feedback and keeping Track Of Sales

Mammon, Delhi-based handbag seller, with turnover 5.4 Crore, clocked mostly after and and a half year of online business, is a joint partnership between Manish Kumarand Lalan Ram.

The duo feels that online orders provided an easy to handle method for the sale and since they started selling through e-commerce they hardly faced any difficulty,” shared Kumar.

Initially, it took a little time to understand the process but gradually it became quite convenient for Kumar and Ram to run the business online, as products get online in no time and is easy to track the record of sales.

“Unlike offline channels, we are having direct hold on sales. There is no mediator which in turn helps us sale more efficiently and at reasonable price,” informed Ram

The best part of selling online, maintained the duo, is that one gets feedback from customers. “It helps a lot to understand the need of the consumer and also it helps to keep track of the performance of the product in the market. We kept improving according to the consumers need, removing least selling products and improving on other products as per customer’s feedback,” divulged the duo.

Insights about Updating Inventory

Dinesh Khatri, founder, Royal SON, a sunglass manufacturer, with turnover 4 Crore after five year of online business, realised that setting an offline store is a huge challenge especially in metro cities where real estate costs are too high. In order to give a great customer experience and provide a large variety of selection, he opted to sell through online marketplaces.

According to Khatir online channels not just provide a wider market but also help in understanding the products that sell well. “These patterns also help us with insights when we update our inventory,” he shared.

Online is the only channel for Khatri, and he doesn’t plan to sell offline in the immediate future as online sale has helped his brand sell nationally without having huge overheads. “It’s better to sell online because we simply need to update the inventory, manage the order process, and ship products on time. It gives us the opportunity to focus on the core – manufacturing right products,” explained the Jaipur based manufacturer.

Adding Impetus in Sales

“A lot of brands, though well-known in their particular region, may not be that popular beyond their cities. This is where reputed e-commerce brands come in. So whether these sellers are forging their own e-identity or showcasing their products on an online platform, they are gathering a whole new customer base with little to no efforts or expenses to speak of. In addition to business from retail and distributorship, they are now adding to their overall sales on a rapidly expanding platform as well,” added Singh.

Initiating New Online Business and Enabling Growth

According to the spokesperson from Snapdeal, Entrepreneur India got in touch with, as an e-commerce platform, they strive to connect high-quality sellers with buyers looking to discover and consume products.

“In terms of network effect, good sellers attract genuine, willing buyers, who in turn lead to more sellers wanting to list on such marketplaces. The presence of active buyers and sellers adds depth and span leading to more transactions, satisfied users and higher revenue for the platforms from repeat use and higher traffic,” he shared.

Snapdeal will continue to provide easy access to small enterprises to sell across the country and help them grow by discovering new markets and products. “Our goal is to help millions take their first step in starting their online business and enable the smaller ones to grow bigger. We will continue to expand the market by connecting more buyers, increase efficiencies, which benefit all stakeholders and provide analytics, which help sellers make better production / pricing decisions,” he concluded.

Accessing Global Market

Sumit Bedi, VP, Marketing, IndiaMART.com, maintained that Indian manufacturers are using e-commerce as a tool to promote themselves in the global market.

“Until a few years back, these manufacturers were competing only at a local level in a largely traditional setup. With e-commerce, the opportunities have got democratized and every business, irrespective of its scale and size, can now operate on a level playing field. For instance, the manufacturers listed on IndiaMART can now directly access the global market. They use the analytics offered by the platform to create new market, manage buyers’ requirements better and use state of the art business tools like a payment gateway or a lead management system. E-commerce is changing the way business is being done,” he emphasized.