Currently, the Indian e-commerce market is primarily a two-horse race between Flipkart and Amazon, especially in the larger cities. As Internet penetration is getting better across the country, they have started expanding to small towns, which has been the niche of Billion Dollar Unicorn ShopClues.
ShopClues’ Journey
Gurgaon, India-based ShopClues was founded in 2011 in the Silicon Valley by Washington University alumnus Sandeep Aggarwal, eBay’s former Global Product Head Sanjay Sethi, and IIT alumnus Radhika Agarwal. At that time, eBay was the only online marketplace in India. However, eBay was an open marketplace while ShopClues allows only merchants and not individuals to sell through its site. It also offers merchants business management and marketing tools along with analytics.
ShopClues charges a selling fee, which depending on the category ranges from 4% for Pendrives & Memory Cards to 20% for Home Décor and Garden. The selling fee is charged only after a successful sale. It also offers a fulfillment service.
ShopClues is more of an online flea market that focuses on the fragmented and unstructured retail in the smaller Tier II and Tier III cities. It focuses on high-margin unbranded products rather than branded goods. Its niche is the Indian middle-class, small town consumer. It has over 600,000 sellers on its platform and over 100 million visitors per month.
Two of its strongest categories are refurbished phones and unbranded fashion. The company estimates that it has about 40% of the refurbished phone market and is the fourth-largest player in the lifestyle and fashion market in India.
Amazon and Flipkart are now encroaching on ShopClues’ niche of small towns. For the recent festival sale, Flipkart extended its services to over 250 new towns and villages in India and claims that about 40% of its customers are from tier-2,3, and 4 towns and villages. For Amazon India, about 86% of its new customers come from small towns.
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