Delivery: “Where the rubber meets the road in online retail”

Heather McIlvaine

30th May 2017

Apurva Chiranewala has worked for some of the biggest names in e-commerce, including India’s Snapdeal. Since moving to Australia three-and-a-half years ago, he has gone from Catch Group to Ebay and is now head of growth at Sendle.

Chiranewala recently spoke with Internet Retailing editor Heather McIlvaine about the one challenge all marketplaces face, Amazon’s arrival in Australia and the booming e-commerce market in India.

Here are some key takeaways from that interview.

The challenge all marketplaces face

“Not being able to have your own infrastructure is the biggest challenge for marketplaces. As long as sellers are able to manage expectations around shipping and delivery from a buyer’s standpoint, they can grow their business. That’s where the rubber meets the road in online retail.”

The need for a democratic approach

“As a marketplace, you have to be democratic in the way you manage the ecosystem as well as the way you pick partners. You can’t have heavy preferences towards some partners. You’re working with everyone and trying to nurture and develop the ecosystem.”

“At Ebay, we were always trying to communicate the things we were learning with the seller community, but you’re talking about hundreds of thousands if not millions of sellers you need to influence. It can be time-consuming and frustrating. Like with any large number, you’ll always have a certain percentage that are more progressive, agile and alert to messaging. Part of it comes down to seller maturity.”

The impact of Amazon in Australia

“I’m personally of the opinion that online retail as share of retail will expand dramatically in the next few years. That will mean there are more consumers buying online in categories that were not previously under consideration. At the same time it will challenge the logistics and shipping industry.”

“Australia is a very different market when it comes population density, so it will be interesting to see how Amazon approaches Australia from a pricing and economic standpoint. But I think in general Amazon’s arrival will signal a different consumer expectation of the new normal moving forward. That’s probably something that’s going to happen relatively quickly.”

“One of the things we’ve seen is Amazon is very logistics-centric. They use shipping as a key differentiator in the market. We expect Amazon to come into Australia and launch with services that are not as prevalent now, like same-day deliveries, pick-up in small time windows, the ability to ship internationally at lower prices, free returns and Prime-style services. Amazon has tried a lot of this in different parts of the world. Some things have succeeded, some have not.”

“If you look at markets that have a deep Amazon penetration, the overall seller expectation is increased. But some sellers are not going to be stocking large quantities of product in a warehouse, they are still going to be shipping out of homes outside the FBA ecosystem. Who do they turn to?”

The e-commerce opportunity in India

“One of the things I can say about the Indian market – and this is based on conversations with former colleagues, since I haven’t worked in that space in a few years – is that it’s very different from the Australian market. Indian people have very different values. This manifests in different behaviour when they go online shopping and the platforms they use to consume products.”

“India is also a labour intensive market and companies have a tendency to throw people at problems. In Australia, we rely heavily on technology and infrastructure to solve logistics-related problems. In India, the delivery system is more fragmented. The same person trying to make a delivery multiple times can still economically work, whereas in Australia that cost is too high.”

“This is just my hunch, but I can see branded sporting goods from Australia doing well in India because of the affinity for cricket and the perception that Australia punches above its weight in certain sports. There’s a positive branding around Australian sports and outdoor equipment, but companies have a lot to learn about the right price point, entry strategy and submarkets within India.”