Business model online marketplace
Shelley Singh, ET Bureau
(Such moves by e-commerce…)
For nearly 25 years, Dinesh Chopra lived with a locational handicap. Chopra sells computer parts, electronic gadgets and accessories from his outlet in Nehru Place — an assembly of several four-storey buildings. Although Asia's largest computer market registers thousands of footfalls every day, only a fraction brave the filth and dilapidation to climb up. "I'm on the first floor and that's my weakness, " says Chopra, director, Softek Surya. "I don't get regular walkin customers."
But Chopra does not mind anymore. "Now, they land on my shop via online marketplaces, " he smiles. Softek is a registered seller on five online marketplaces, including eBay and Flipkart. "About 35 per cent of my marketplace buyers are from South India, who have never seen my shop, " he says. His annual sales have rocketed from Rs 14 crore in 2010-11 to Rs 60 crore now; and 70 per cent of it is from online marketplaces, which are adding "muscle to business".
Chopra is a prime example of online marketplaces — branded e-tailers who host sellers, and connect them to buyers for a commission — empowering a small business to scale up.
An example of another kind of empowerment they are enabling is India Trend, which is in business only because of online marketplaces. Seven years ago, Parul Arora Mittal and her mother "tried their luck" by putting 20 pieces of jewellery on eBay. All were sold in a week. Today, Mittal's small operation exports handmade, alloy-metal jewellery, via eBay. "We never had the resources to set up a physical store, " says the 30-year-old. Now, she has no reason to. "Since then, I have never even thought of a physical store. The online marketplace is my business place." And their numbers are increasing.
Billy Pidgeon, an analyst with Game Changer Research, says the move is huge for both Sony and the industry, making publishers less dependent on retailer shelf space and helping to cut down on the growing secondary market of used game sales, something publishers don't earn any money from.
"Using a digital download only business model brings Sony in direct competition with Apple, and the Playstation Network is already in competition with Microsoft's Xbox LIVE marketplace," Pidgeon said. "The PSPgo's download only design will help SCE transition its customers and its media delivery to online distribution
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