Â (This post was triggered by Alok’ s recent post about Â new capital efficient, profitable models of ecommerce)
The current crop of poster boys of ecommerce ventures in India – FK, Snapdeal, FnY etc are all horizontal – sell everything to everybody.
They have built a business which has scaled – they have served millions of transactions.
They have generated scale with VC money, but profits have to be generated with customers’ money. How will they do that?
What is the new model of business that Alok is talking about?
Could it be the newer ecomm ventures will be –
- Vertical sites – meansÂ focusingÂ on a one or a set of product categories or customer segments. Vertical means that more information on site about how to use the product, etc. Vertical also means that they will offer more products per category compared to the general ecomm store.
- horizontal sites based on made to order/just in time purchasing instead of made to stock/buy to stock models
- focused on building targeted relationships with customers using technology which ensure repeat purchase.
These also require eco system in place including logistics, payment systems, analytics and reliable partners who will supply merchandise just in time.
What do you think?