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Differentiation key for specialised e-tailers to grow: Panellists at VCCircle Summit
(L to R) Nykaa's Adwaita, Seniority's Ayush Agrawal, RainCan's Abhijeet Kumar, JSW Ventures' Gaurav Sachdeva and VCCircle's Beena Parmar (moderator)

A key factor that sets apart specialised e-tailing players from bigwigs such as Amazon and Flipkart is product and service differentiation, said panellists at the VCCircle Consumer and E-Commerce Investment Summit 2019 on Thursday.

According to Gaurav Sachdeva, managing partner at JSW Ventures, while old-school retailers such as Croma, for electronics, and Hamley’s, for toys, had specialised offerings, new and smaller players have to take into account merchandising, branding and content to catch the consumers’ attention.

Another segment that offers immense potential for differentiation is beauty, and e-tailer Nykaa has a clear strategy to make itself stand out from the competition.

For Adwaita Nayar, chief executive and part of the founding team of beauty e-tailer Nykaa’s retail operations, having unique merchandise and curation is core to differentiation. “You will get 80% of (beauty) products on Amazon and Myntra. We have a dedicated team that finds that remaining 20% of (unique) brands,” she explained.

Besides uniqueness, Nykaa ensures that its products are clean and authentic, which larger players many not be able to offer. Lastly, the beauty e-tailer has focused on providing its consumers content in order to boost product discoverability. “About 50% of beauty products are those you can replenish. Consumers look for inspiration from others, asking ‘How can I use this product to look like xyz’. Content is a team we have invested since day 1,” said Nayar.

For Ayush Agrawal, founder of Seniority Pvt. Ltd, an e-commerce venture aimed at senior citizens, differentiation means enabling a smooth order processing journey for consumers, building relationships with customers, and partnering with the large e-tailers.

Agrawal claims that his startup has built a community of senior citizens by organising events such as yoga and zumba classes.

Another key element in the differentiation process is whether technology can help specialised e-tailers onboard customers and engage with them for longer periods of time, said JSW Ventures’ Sachdeva.

He further added that tracing the customer journey after a product or service has been rendered is another aspect that such e-tailers must focus on.

Besides differentiation, panellists also spoke about scaling such specialised ventures. For Nykaa’s Nayar, being clear about the business model and being in business for the long haul is what will help one grow. Hiring the right talent well in advance will also ensure sustainable growth. “Don’t skimp on hiring,” she advised.

For Abhijeet Kumar, co-founder of subscription-based e-grocery startup RainCan, scaling has to be done right. In his experience, scaling meant taking on more customers than the startup could handle. The startup, which got acquired by grocer e-tailer BigBasket in December 2018, began operating in one city but then later expanded to 10 after the acquisition.

JSW Ventures’ Sachdeva said that demand and search volumes determine whether specialised e-tailers will scale or not. He further empahsised the role of technology in scaling a business. “Technology brings in product changes as well as hiring talent,” he said.

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