Another story today:
If I can buy clothes from Amazon/Flipkart, why should I use Myntra?
If I can buy medicines from Amazon/Flipkart, why should I use PharmEasy?
If I can buy groceries from Amazon/Flipkart, why should I use BigBasket?
If I can buy furniture from Amazon/Flipkart, why should I use Pepperfry?
If I can buy sports stuff from Amazon/Flipkart, why should I use Decathlon?
If someone can buy cosmetics from Amazon/Flipkart, why should they use Nykaa?
You get the point, right? All these small companies sell stuff that is already available on Amazon and Flipkart. Which means they are directly competing with 2 giants- Amazon and Flipkart.
Conclusion: These small companies should have died a long time ago.
But they are still alive and thriving. Lots of customers are buying from them, and investors are funding them.
Why?
Because Amazon has a quality problem. There are lakhs of sellers on Amazon who sell a wide variety of products. This is an example of the horizontal model of e-commerce.
Obviously, Amazon can't control so many sellers. Many of them sell below-standard products to people. In products like medicines and groceries, this is a big problem.
This is a big weakness of Amazon's horizontal model, and these small companies are taking advantage of that.
Instead of selling a huge quantity of products, these companies focus on one specific category like furniture or groceries. This allows them to improve the quality of products listed on their website.
For example, Amazon sells a lot of crappy t-shirts from crappy brands. But Myntra only sells t-shirts of recognized brands.
This, my friends, is the concept behind "vertical e-commerce".
If I can buy clothes from Amazon/Flipkart, why should I use Myntra?
If I can buy medicines from Amazon/Flipkart, why should I use PharmEasy?
If I can buy groceries from Amazon/Flipkart, why should I use BigBasket?
If I can buy furniture from Amazon/Flipkart, why should I use Pepperfry?
If I can buy sports stuff from Amazon/Flipkart, why should I use Decathlon?
If someone can buy cosmetics from Amazon/Flipkart, why should they use Nykaa?
You get the point, right? All these small companies sell stuff that is already available on Amazon and Flipkart. Which means they are directly competing with 2 giants- Amazon and Flipkart.
Conclusion: These small companies should have died a long time ago.
But they are still alive and thriving. Lots of customers are buying from them, and investors are funding them.
Why?
Because Amazon has a quality problem. There are lakhs of sellers on Amazon who sell a wide variety of products. This is an example of the horizontal model of e-commerce.
Obviously, Amazon can't control so many sellers. Many of them sell below-standard products to people. In products like medicines and groceries, this is a big problem.
This is a big weakness of Amazon's horizontal model, and these small companies are taking advantage of that.
Instead of selling a huge quantity of products, these companies focus on one specific category like furniture or groceries. This allows them to improve the quality of products listed on their website.
For example, Amazon sells a lot of crappy t-shirts from crappy brands. But Myntra only sells t-shirts of recognized brands.
This, my friends, is the concept behind "vertical e-commerce".
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