Updated below with notes from an interaction with Hanif Sama, COO, Dhamaal.com
If Flipkart can launch a payment gateway that competes with Avenues, why can’t Avenues (which owns the payment gateway CC Avenues), launch a marketplace? Also worth noting that Dhamaal is to Avenues what Tradus is to its competitor PayU.
The pitch that Dhamaal is making to merchants is that marketplaces tend to list their own products, and compete with their merchants; this is an obvious dig at the Amazon (global) and Flipkart+WS Retail approach. It is also positioning Dhamaal as a marketing platform, rather than a marketplace.
Not a marketplace?
Dhamaal.com does not have it own inventory, stocking, fulfillment or logistics, and inventory and logistics management are the merchant’s responsibility. Dhamaal is being positioned by Avenues as a marketing platform instead of a marketplace: this is something one would expect it to say, since its payment gateway product CC Avenues is being used by merchants, and it would like to avoid an indication that it a group company is competing with clients. Avenues says that its intention is to provide marketing opportunities to merchants, but the platform offers direct sales through its website.
SnapDeal also does not take a warehousing approach to its marketplace, and Dhamaal doesn’t appear to be too different in that context.
Tie-ups with Banks
As a big catch, Dhamaal is also offering to merchants the option of marketing to customers of banks that have e-shopping initiatives. This is something that Avenues will be able to do easily, because of its long association with banks in India, being probably the largest payment gateway solution in the country.
Merchant sign-up and fee: Presently the website only offers a sign-up form for merchants and does not specify any details on the charges that merchants need to pay for listing on the website. This could be a crucial factor in getting merchants to sign up with them. It is worth noting that Amazon that recently launched in India offers free listings to merchants for the first year. Dhamaal might require a competitive pricing to get merchants to sign up with them. But it is worth noting that since Avenues provides the payment solutions to this website, the merchant payment for sales seems like a huge incentive for Avenues to jointly initiate this venture.
The website gives the following shipping time to different regions in the country.
Categories & terms offered: The website currently offers buyers with categories such as apparel, books, mobiles, online recharge, computers, home & lifestyle, home entertainment, gifts & flowers, kids and cameras. The website offers 30 days replacement guarantee for all products sold on Dhamaal.com provided that the company is intimated within 72 hours from the date of receipt of delivery of the products. This is does not apply to certain products such as flowers, cakes, gifts etc.
In conversation with MediaNama, Hanif Sama, COO for Dhamaal said that the monetization for the marketplace will be from two sources”We will getting commissions from a payment gateway, and there will be a listing fee model for merchants, and we will probably give an introductory offer of Rs 6 months off.”
Sama says that since they have set up a team which will look after customer support and seller support: they have systems which will inform them which seller is shipping, and there will be a team also looking into dispute resolutions.
Avenues has around 15,000 merchants, and for them, the KYC has already been done; for them this is another marketplace to sell their products to buyers. In addition, Avenues will have a team for bringing more merchants on board on the platform. “We will target merchants in tier-2 cities, which are not in this e-commerce game so far,” he said. In that sense, this is more like the B2C version of Indiamart, positioning itself as a marketing platform for SME’s.
Marketing will be a key part of the Dhamaal plan: merchants do not have the wherewithal to market, and this is where marketplaces come in: “You’d be surprised how many merchants are there, who people have not heard of, don’t have the money or the ability to market their products. They lose out because they cannot use Adwords,” Sama added.
Avenues has going to launch a marketing campaign to promote Dhamaal: “Right now, we will market within our budgets, which are not anyway close to what a Flipkart has done. We will focus on Digital media, print and hoardings. We are not VC funded company, so we will spend money smartly, and only use it when we need to.”
But what is the need for another marketplace? “We’re not the first and we’re not the last. There are hardly any marketplaces in India, compared to China and other countries. The market has not been fully tapped,” Sama responded.
He did reiterate that they will not be competing with other marketplaces, but on the face of it, our take is that they will be competing: Dhamaal is targeting the same end consumer that other marketplaces are, for their merchants.
Note: disclosures apply