The ever-elusive mass marketing paradox

My kid has grown up to be a Dinosaur fan, as I used to be, years ago. I often ensure that I get him dinosaur printed T-Shirts, whenever I visit a shopping mall, or make an online purchase. From last few days, he was constantly asking for figurines of Dinosaurs. He is unable to spell it, hence he calls them as “Dakasurs”.Online marketplace price for a 12 set dinosaur set was almost same as that of selling price at nearby gift store. I took him along to nearby retail store and got him a set of 12 Dinosaurs. Toys were elegant in finish, made of high quality and environment friendly PVC Material. This was an instant source of gratification for both of us. Had I ordered it online, it would have taken 3-4 days for arrival. Moreover, I am always skeptical about quality of purchase when ordering online. One of the major reasons why RTOs are becoming pain point for online sellers, has been the mismatch between product description/image and the perceived(actual) product. In my case, sales price for this 12 set toy was Rs. 350. This is what we call a mass market, wherein order value for product varies in range of Rs. 500-600.It constitutes more of daily household,fashion and lifestyle items. Most of these consumables are generic (unbranded) in nature. It has become a large segment nowadays with big online players like Meesho, Shopsy (By Flipkart),and recent announcement of Amazon entering the foray(Amazon Bazaar).

Amazon’s announcement to launch “Bazaar”, comes to me as more of a strategic decision, than a business decision, to increase revenue. The reason being that, they have decided not to launch a separate app, for catering to the mass market in Tier 2, 3 and 4 cities. Bazaar would be in-built in existing Amazon app. This is same strategy as that of inbuilt Amazon mini TV. Through Bazaar, they would be looking at increasing customer stickiness, and reduce churn. This will help Amazon, ensure that there is gradual increase in average time, customer spends, looking for products on their app. Moreover Products with low AOV, are likely to have a lower RTO probability, which would be a win-win situation, both for sellers and marketplace. They would also be looking to tap into a large pool of online sellers, who are associated with Meesho, due to a zero-commission model. These sellers have always been dreaded, by large share of profit, that goes into paying to Amazon Seller services, trimming their margins.

Let’s see how the game unfolds as Meesho, Shopsy (By Flipkart) and Bazaar( By Amazon) would be competing with each other to have a market share for this ever eluding mass market from small town and cities. RTOs, Quality of products, and building alternative sustainable revenue stream, will always be a challenge for this evolving retail landscape.

So, welcome to the new Jurassic Park.