Niche e-commerce sites add edge to humdrum of 'click & shop; is customer clicking?

In 2004, Chris Anderson debuted the idea in a Wired article. He called it the Long Tail. The official website says: “The theory of the long tail is that our culture and economy is increasingly shifting away from a focus on a relatively small number of “hits” (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail.” This is about the long tail. Okay, loosely.

Anderson makes a case for a “mass of niches”, as the costs of production and distribution fall, especially online. “There is now less need to lump products and consumers into one-size-fits-all containers. In an era without the constraints of physical shelf space and other bottlenecks of distribution, narrowly targeted goods and services can be as economically attractive as mainstream fare,” is what he says. Maybe this explains the rise of the niche ecommerce sites. While bestylish.com offers only shoes, heavenandhome.com caters to your home furnishing needs and jewelsnext.com offers jewellery, to name a few.

But when it comes to niches, the “tail” is only getting longer. So you have Bangalore-based Seema Seth and Pooja Mehta peddling socks online through Footsy, Sanwari Alagh Nair giving you premium home decor items through House Proud and Harshad Daswani selling beachwear and holiday clothes with The Beach Company. Then there are online lingerie portals like Zivame, My Lace and Straps Strings and e-stores for stationery and paper craft. Each of them is answering a need that they found missing.

According to Internet Mobile Association of India reports, the Indian e-commerce market was set to cross the Rs 46,000-crore mark in 2011, at a 47 % growth. E-tailing is second after online travel with an 8% market share.

Ankur Bisen, associate vice-president, retail, Technopak Advisors, says even though the niche e-tailing is in very early stages, categories such as jewellery, footwear and baby care have seen some traction. “Few such as Carrat Lane and Big Shoe Bazaar have managed to see some success and build visibility. These sites have managed to move away from price and offer sustainable product and service differentiation,” he says.

Bisen also notes that the user interface is differentiated from the mass sites or they offer some service that address consumer’s value template either in the form of convenience or experience. So while Lulupu.com (selling paper craft) runs a craft class for building a community of crafters, House Proud has created spaces within the site to make it into a personal shopping space. According to estimates, there are around 360 e-commerce sites operational in the country, and in the past two-three months 20-30 niche ventures have come up.

But the key challenge, Bisen says, is distribution cost. “Niche sites don’t offer the advantage of spreading cost across many SKUs [stock-keeping units] and categories. This becomes a stumbling block to build scale,” he adds. A reason probably why many sites that started with a niche tend to diversify into general category to scale up. “There are many opportunities and ways to scale up within your chosen niche. You just have to explore it,” says Daswani of TheBeachCompany.in, who’s looking at tie-ups with beach resorts to manage offline stores.

Anderson says in his blog: “People gravitate towards niches because they satisfy narrow interests better, and in one aspect of our life or another we all have some narrow interest whether we think of it that way or not.” That’s what these click clique is hoping for.

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