E-commerce companies broaden product horizon

With the launch of DNA-testing services, Snapdeal joins the bandwagon of Indian e-commerce players venturing into new areas

E-commerce companies are venturing into new areas, selling houses, adult products and even preventive health care online. The latest to jump on the bandwagon is Snapdeal, which launched DNA-testing services on Wednesday.

Experts say the diversification reflects the euphoria surrounding e-commerce. “Globally, marketplace giants such as Alibaba sell almost everything online. At Amazon, too, you could almost find everything,” says Rehan Yar Khan, managing partner at Orios Venture Partners, which has invested in companies such as Druva and Olacabs.

Snapdeal has been innovative in introducing categories such as scooters, homes and now, DNA-testing services. The website sells 8,000-10,000 scooters a month and claims to have recorded about 1,000 registrations for new apartments on the day of the launch. In the first week, it sold apartments worth Rs 40 crore.

Kunal Bahl, co-founder and chief executive of Snapdeal, says venturing into new categories is a strategy to cater to the huge demand for off-beat products. “All new category and product additions on snapdeal.com are in response to fresh and innovative ideas in the market, which will provide solutions to unanswered consumer needs,” he says.

Recently, Flipkart entered the adult products category. It had also launched its third private label in the home appliances category, following similar labels in the apparel and electronics segments. Sachin Bansal, co-founder and chief executive of Flipkart, had earlier said “Everything, other than automobile and grocery, is fair play.”

Experts, however, caution against hasty category expansion, which might dilute the brand value of these companies. “While experimentation with new categories must be encouraged, one needs to ensure quality and the right consumer experience for all products sold. Hasty launches, done without much thought and research, could pose reliability issues for e-commerce companies,” said Arvind Singhal, chairman and managing director, Technopak India.

Though e-tailing is still a small contributor India’s retail segment, accounting for only 0.4 per cent of the overall market, it is growing rapidly. It is expected this segment will be worth $32 billion by 2020, against the current $2.3 billion.

NEW FRONTIERS FOR INDIAN E-COMMERCE

• Recently, Flipkart entered the adult products category
• E-commerce companies are venturing into new areas, selling houses, adult products and even preventive health care online
• Snapdeal launched DNA-testing services