in E-commerce

So you have an e-commerce website

Recently I stumbled on a specialised e-commerce website that focuses on a niche product. The website sells tea leaves and have established good direct relationship with multiple suppliers.It provides real value to a myriad of small tea producers whom do not have access to international distribution network to export. Hence playing a role of 21st century digital middleman between the producers and international consumers.

The website becomes a sort of ‘direct to consumer’ (DtC) channel and international wholesaler/reseller for these producers with a fee; In return they probably do the fulfilment, online promotion to drive traffic, conversion, repeat purchase and higher average order values; While giving international consumers access to large choices of tea leaves. Hence a real win-win-win scenario for the company, producers and consumers.

Understandably the company’s immediate focus is to scale the current business.

In today’s competitive world and converging of on-line/off-line consumer buying habits, getting the fundamental right is important to:

  • Grow the supplier side by signing up more tea producers to provide more choices.
  • Grow online revenue by having more buyers through engagement, grow the community, grow visitors traffic, improve conversion, improve average order value, introduce subscription model, more repeat buy, more offering, promotions, upsell, cross-sell, gifting, etc.
  • Get customer services right the first time, have the right metric in place and craft a meaningful customer journey.
  • Cost enhancement by getting better rates or/economy of scale from suppliers, logistic and fulfilment providers, packaging cost, efficient operations, etc.
  • Extend the range of product offering (ie. offering other products ie. handicraft, etc).
  • Track and have plan for coopetition potential such as Amazon, Alibaba’s owned platforms and others.
  • ….

Other activities such as maintaining and developing e-commerce platform, extending payment method, integration, analytics, localisation, and many more – is as important to grow an e-commerce business.

However, all above is crucial for an online business, but is it sufficient?

How could one grow beyond online? Assuming it is relevant for the product type and make economic sense. In the case of the tea leaves e-commerce website, some of the growth path that need to be validated could include:

  • Growing from selling products to selling experience by opening a ‘physical’ store front that augment online capability with offline benefits such as touch, smell, personal experience, offline convenience, etc. This could be concept store, teahouse, pop-up stores or others.
  • International expansion: Extend the reach by franchising the tested model to enable faster expansion and to share the success with franchisees.
  • Develop the online and offline distribution network into an omni-commerce platform service for other brands or products to develop their direct to consumer channel.

Such growth could be funded by external money through venture capital, crowdsource, et or internally via organic growth, with both pros and cons. This was captured by the recent rapid rise and fall of Fab. Some interesting analysis here and here. More thoughts on e-commerce trends by Jeff Jordan (investor blog) here.

It is clear that building ‘just another’ e-commerce business in today’s world is not sufficient.

UPDATE (5 March) : Fab bought by PCH.

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