In today’s fast-paced world, staying trendy is essential, but in a country as vast as India, servicing Tier II and beyond can be challenging. While value fashion brands find a ready market in smaller towns and cities – where people have more disposable income and a growing appetite for consumption – most struggle to establish a physical presence here and thus work with the best option to reach their customers: value-commerce platforms.
As competition heats up in the value-commerce space, with fashion emerging as a hotly contested category, Snapdeal has emerged as a standout. The Indian e-commerce giant has a plan – to grow thoughtfully yet steadily.
CyberMedia Research
- A 2023 CyberMedia Research study has shed light on the changing dynamics of the Indian retail market, highlighting the preferences and habits of online shoppers.
- The study states that India’s e-commerce landscape is witnessing a significant surge in online shopping, with consumers from Tier II cities and beyond leading the trend.
- It further states that clothing and accessories top the list of products purchased online.
“Snapdeal caters to the value e-commerce segment. We are that rare breed that is actually focused on Tier 2 and Tier 3 Bharat from a value offering perspective. With over a decade of experience serving Bharat through lakhs of small and medium enterprises, Snapdeal has a unique and deep understanding of what it takes to serve India’s mass market. This pivot is something we are very serious about and which is converting well for us as a business,” says Shivanee Dutt, Senior Director, Branding & Merchandising, Snapdeal and Stellaro Brands.
Dutt explains that India is a hotbed of great development at a label level. While many of these labels gain visibility on platforms primarily catering to Metro and Tier 1 cities, the main challenge for the industry now is striking the right balance. They need to serve the diverse population of Bharat while still providing exceptional services in a financially sustainable manner. “This includes Snapdeal focusing on the often overlooked markets, such as the value segment and Tier-2, Tier-3 Bharat, where there is significant disposable income and a growing appetite for consumption,” she says.
Fashion constitutes a large percentage of the consumption pattern on Snapdeal. “When people shop in Tier 3 and Tier 4 markets, what are their cues for consumption? They are primarily occasions – family occasions and festivals. The entire year-long purchase cycle in the fashion value segment aligns here, as smaller towns equal culturally rooted family/joint family setups. On such occasions, they buy clothes, food, and Pooja essentials – and we are well-stocked on all these counts,” she says. “Snapdeal,” she further states, “works with affordable and value-focused labels because of the market it serves. However, popular brands like Bata and Khadims are also available in the footwear segment of the platform.”
“Our business team has just onboarded a large selection of brands – more than 500 – which include some new labels and also some D2C brands like Campus Sutra. So, it’s an interesting mix, but largely, we feature brands with a focus on value lifestyle and fashion on our platform,” she says.
Free Delivery Model
Dutt says that one of Snapdeal’s USPs is that it operates on a free delivery model. “The consumers we cater to are so focused on value that they don’t want to deal with paying additional delivery charges. Hence, we take the responsibility of delivering the products to the customers, and we bear this cost,” she explains, adding that on Snapdeal, over 95% of the products sold are priced below Rs. 1,000.
It is not easy to navigate the Tier II market and beyond. Snapdeal’s advantage lies in the ecosystem it has created over the years. “We’ve looked at some of the best players and partners on the logistics and shipping sides to work through the end delivery. We have a large CX team that is led by another set of functions, with a very consistent and focused play to ensure that customer and post-purchase satisfaction is well taken care of. So, it’s a very fast and intently tracked mechanism that we look at,” she states.
More Than Just One Play
In 2022, AceVector group launched Stellaro Brands that runs on a dynamic house of value brands model. These brands are listed across multiple e-commerce platforms, including Amazon, Snapdeal, Flipkart, AJIO, and Tata CLiQ. “Stellaro Brands was crafted for the needs of modern Indian shoppers, and this is where we create, build, and scale up brands that are again focused on the very specific Bharat Tier 2, Tier 3 value segments,” says Dutt.
The AceVector subsidiary has now forayed into the offline space with its flagship private label, Rangita. Rangita targets women in the 20-plus age group and offers an exquisite array of affordable ethnic wear. “While we have seven labels under Stellaro brands, Rangita has top-of-mind recall. The brand already sells on Amazon, Flipkart, and Ajio, and that’s where a large part of our business comes from. Such has been the popularity of this brand that we have already launched two test stores in coastal Andhra – in Gajuwaka and Kakinada. We are coming up with 10 more test stores within the next five months, and we have high expectations for them,” states Dutt.
She notes that the reason a southern state was chosen for the launch is the fact that, on a per capita basis, the value market in South India is 2-3 times higher than in other parts of India, and there is no winter slowdown here. “Stellaro brands are going with a citadel approach for Rangita, which is where a brand opens a test store in a specific state and then gets efficiencies of scale in testing. Once the results are out and if they are positive, then the brand replicates the move to another state with the same model,” she concludes.
