Snapdeal-FINO

Online marketplace Snapdeal has partnered alternate delivery channel provider FINO PayTech to launch assisted e-commerce centres in semi-urban, rural and low-income residential areas across India.

Snapdeal plans to set up such FINO PayTech-operated assisted e-commerce outlets or kiosks across 70,000 rural areas in 65 cities by end of the current financial year. The first set of assisted e-commerce outlets will come up at Dharavi in Mumbai, Varanasi, Valsad in Gujarat, and urban villages in Noida, Gurgaon, Hyderabad and Jaipur.

Interestingly, an The Economic Times report mentions that Snapdeal will be setting up 5000 such kiosks by the end of next year. The report also mentions that during pilot runs of these kiosks Snapdeal witnessed average purchase ticket size of Rs 1400, as compared to Rs 2000 in urban areas.

How it works

Snapdeal has created a curated list of over 1000 products, including speakers, juicers, solar lanterns, diner sets, camera and mobile phones among others, which only the FINO agents can log into. Customers can browse through products on offer and the FINO agents can place orders on their behalf. Once the order is confirmed the FINO agent will collect the payment. Snapdeal will deliver the product(s) to the outlets and FINO PayTech will then deliver it to the customers.

Our take

This initiative is likely to address two key problems faced by e-commerce platforms in India – accessibility & customer reluctance towards online payments. While most e-commerce marketplaces have tie-ups with third-party logistics service providers and have set up in-house logistics handling arms, like SafeShip in case of Snapdeal, many tier-II and tier-III towns and majority of rural India isn’t covered. To this end, Snapdeal had also signed a MoU with India Post last month to ensure wider reach for products on its platform, after testing India Post’s delivery service for e-retailers last year.

Wider reach also ensures that the cash-on-delivery (CoD) service can extended to larger number of customers. This brings us to the second problem. A large number of Indians are still wary of making online payments, which dissuades them from online shopping portals. These assisted-shopping outlets would allow Snapdeal to reach customers who aren’t comfortable shopping online.

SahajShopping: Srei Infrastructure subsidiary Sahaj e-Village had partnered Infibeam to launch an online shopping portal called SahajShopping.com, in May last year. This store was exclusively for rural consumers and the shopping was facilitated through Sahaj-operated broadband enabled Common Service Centres.

Snapdeal-Softbank: Last month, Softbank Group confirmed investing $627 million in Snapdeal. Following the investment, SoftBank Internet and Media Inc (SIMI) CEO Nikesh Arora joined the Snapdeal board.

Snapdeal claims to currently have over 25 million registered users and more than 50,000 merchants on its marketplace. It also claims to offer over 5 million products across 500+ categories.