Small and Medium Enterprises – Dutch Uncles

What are Political Factors that Affect Entrepreneurship?

Shalmoli Sarkar — Tue, 20 Apr 2021 11:35:03 +0000

Political factors for businesses and the startup ecosystem are beyond control, but businesses must respond to the change in policies brought in by the incumbent government. After elections, when a political party comes to power, it has certain missions and goals that have a huge role to play in the development of entrepreneurship in a given geographical area.

Political factors that influence the entrepreneurship ecosystem

Social stability

Social stability has a significant impact on the running of a business. Any unrest in the country or a hostile takeover over a government will lead to looting, riots, and chaos in the country. Such situations might lead to ‘bandhs’ which can disrupt the normal working of business operations.

Foreign trade relations

The government can exert control on businesses through taxation. Foreign companies that want to set up their businesses often face the brunt of high taxes since the government wants to protect the business interests of local, small and medium scale businesses. Imposing high taxes on foreign brands will eventually cause them to increase the price of their products thus preventing people to buy more from local businesses.

Taxes

Government can increase or decrease tax for some companies or business verticals and lower it for others. For example -the state government in India earns a third of its revenue from the liquor industry. Closure of pubs and bars in the pandemic led to no sales of alcohol due to which the state government went cash strapped. To compensate for the revenue the state government allowed the liquor shops to open by hiking taxes in the liquor industry.

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Political factors for businesses and the startup ecosystem are beyond control, but businesses must respond to the change in policies brought in by the incumbent government.

Cultural attitudes and buying decisions

Any political party when comes to power its primary job becomes to favour the demands of its interest groups to remain in power. For example- Nitish Kumar led Grand Secular Alliance government decision to prohibit the manufacturing and sales of alcohol led United Breweries Ltd (UBL) to discontinue its brewing operations at its manufacturing unit in Bihar.The influence of politics has the power to subtly reshape the demographics that can have a massive impact on businesses.

Political stability, economic policies and budget

Political instability has a negative impact on the continuity of business as it disturbs market activities and labour relations. For example- if a political party that is in power has been formed from a coalition, there might arise situations of instability where a party’s views might differ from the other causing the party to break. This will result in elections again. The elections might bring a government in power that can introduce less business-friendly policies, change in business taxation and regulations. Budget policies also impact business continuity, for example, the government rolling out easy loan availability for MSMEs and startups improves India’s ease of doing business. Introduction of pay commissions in the budget increases high purchasing power among citizens that catalyses consumers to spend more which is a positive sign for businesses.

For the startups

Which political party will be in power and what pace it will lay for the businesses is something that enterprises cannot control. Therefore, instead of businesses reacting to the changes made, it should pay attention to consumer spending and cultural attitudes to develop new products or new additions to fit into the jigsaw puzzle of policies and government decisions.

The post What are Political Factors that Affect Entrepreneurship? appeared first on Dutch Uncles.

How Can Businesses Reconcile Using Virtual Bank Accounts?

Shalmoli Sarkar — Tue, 20 Apr 2021 01:30:04 +0000

The apprehensions of going out are arising due to the rapid spread of the infection. Businesses are trying their best to reduce visits to banks, skipping the paperwork, and adapt to virtual banking. For years, businesses in India have been collecting large payments from bank transfers. The collection of payment is easy, but what seems to be cumbersome for the businesses is the reconciliation process since it is subjected to human error that increases administrative costs.

What are Virtual Bank Accounts?

Virtual bank accounts that have no physical existence, are temporary where transactions happen on behalf of a real, physical account. Similar to creating an account on Facebook or Instagram, a virtual bank account can be created in seconds. Reconciling payments in a virtual bank account happens in real-time conserving time and money. The operating and maintenance costs of a virtual account are lower than a physical bank account. A business can open multiple virtual bank accounts that are difficult in a physical bank account.

Types of Virtual Account

Virtual accounts are of two types

Account created on top of a nodal or escrow account

An escrow account is an account where funds are held in trust whilst two or more parties complete a transaction. Virtual accounts created on nodal or escrow are temporary. Here the funds remain only for a short duration till transferred to its payee. In this when we make payment, the money goes to a nodal/escrow account through a payment gateway for ex-PayU, Razorpay. These payment gateways have various virtual accounts. Let us understand this with an example- Suppose a business owner purchases goods from a wholesaler using transaction medium NEFT/RTGS or IMPS, the funds are transferred in a virtual account given by the payment gateway that stays there temporarily until it reaches the wholesaler in a settlement.

Account created on top of a business or current account

In this, the virtual accounts are made based on a business or current account where a banking institution is involved in setting up virtual accounts. When a customer transacts through the virtual account, the business owner will identify the payer’s details through the virtual account number. Businesses can deduce customer information and reconcile payments with ease, also it can get an overview of transactions happening across departments. Virtual accounts are beneficial for educational institutions to easily manage student fees. With every student being assigned a virtual account number that can be created based on roll number and batch year, the institute can e-collect fees via bank accounts and use the account number to track where the payment has come from.

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Virtual bank accounts that have no physical existence, are temporary where transactions happen on behalf of a real, physical account.

Benefits to a Business for using a Virtual Bank account

Automated Payment reconciliation

For businesses that involve thousands of transactions on a day-to-day basis, payment reconciliation can be a daunting task. For instance, let us take an e-commerce business that receives payments from various sources such as payment gateways, direct bank transfers, wallet payments, and transactions funded by loans. In such cases, where a virtual bank account is absent, the company would have deployed a finance executive for the task of reconciling with the actual funds received in the bank accounts, which is a tedious task.

Reduced Expenditure

Small businesses spend approximately 2-3 percent per transaction on payment gateways. Considering the volume of the transaction the business receives per day the collective amount of spending becomes an expensive affair. Instead of spending a small percentage of the transaction amount, businesses can pay a fixed cost for each payment processed. This benefit while dealing with high ticket transactions.

Improved Customer Experience

Customers for digital transactions want the process to be smooth and hassle-free. They expect a confirmation from the payee side. Customer experience can be enhanced by organising the cash flow and financial management. We should not be giving the customers doubt about the successful payment transaction.

How Razorpay’s Smart Collect Can Help Create Virtual Bank Account

Razorpay’s Smart Collect, one can generate virtual bank accounts and virtual payment addresses (UPI IDs) on-demand and share the details with customers to accept payments through NEFT, RTGS, IMPS, and UPI. The virtual bank accounts and UPI IDs are linked with the bank account that the business owner has registered with Razorpay.

Since a new virtual bank account or UPI ID can be created for each customer, businesses easily track payments made by payers. Razorpay sends notifications of the payments made to any of the accounts or UPI IDs and also handles the complexity of reconciling these payments on the owners’ behalf.

Reasons to choose Razorpay Smart Collect

Below are the reasons why businesses should implement Smart Collect over other e-collect options:

Instantly create virtual bank account: We can generate virtual bank accounts and virtual UPI IDs in no-time assigned to individual customers in real-time via Razorpay Dashboard and APIs (Application Programme Interface)
Zero Costs: There is zero cost involved to create customised virtual bank accounts and UPI IDs bearing your company or brand’s name as a prefix.
Multi-Bank Support: We can create customised account numbers on multiple banks within a single integration.
Auto-Refund: It can instantly refund any payment made to wrong and deactivated accounts.
Payment from Multiple payment modes: Virtual bank accounts created from Razopay’s smart collect can accept payments through NEFT, RTGS, IMPS, and UPI.
Third-Party Validation: It accepts payment-only accounts that are KYC (Know Your Customer) verified.
Real-time notifications: Receive real-time notifications on payments with Webhooks.
Personalisation: Create custom UPI IDs to match your business needs and branding.

How Smart Collect enables accepting payments.

Single, large one-time payments

Smart Collect enables the customer to collect a single, large one-time payment from a customer (preferably via NEFT, RTGS, IMPS or UPI. We can create a virtual bank account or UPI ID and share the generated account details (account number and IFSC) or UPI ID with the customer. When the customer makes the payment to this account or UPI ID, Razorpay sends notifications so that the account can be closed.

Regular payments of large volume

For payments of large volume where we need to send customers regular invoices, a virtual bank account or UPI ID for them can be created to share the details where the customer can add the bank account as a beneficiary on their preferred netbanking portal and transfer the money using NEFT, RTGS or IMPS. The customer can add a UPI ID on their UPI payment service provider app such as Google Pay and transfer the money using UPI. Razorpay notifies you every time a payment is made towards the account, thus simplifying the reconciliation process.

Campaign or event-based payment

Accepting payments from multiple sources for a multitude of campaigns or events is possible through Smart Collect to create a virtual bank account or UPI ID for each event or campaign and share details accordingly. The payment is made for each event through any of these accounts or UPI ID, Razorpay sends alerts of the account or UPI ID used to do the payment, thus eliminating the need to identify which campaign or event payment was made for.

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Razorpay’s Smart Collect, one can generate virtual bank accounts and virtual payment addresses (UPI IDs) on-demand and share the details with customers to accept payments through NEFT, RTGS, IMPS, and UPI.

How Does Smart Collect Work?

Sign up for a Razorpay Account.
Create virtual bank accounts or virtual UPI IDs tagged to the customer.
Share account details (such as account number, IFSC, and Name) or UPI ID with the customer.
Customers add essential details like adding the bank account as a beneficiary on their preferred net banking portal and transferring the money using NEFT, RTGS, or IMPS. If using UPI apps then the customer adds the UPI ID on their UPI payment service provider app, such as Google Pay, and transfers the money using UPI.
Payment deposited in these virtual accounts or UPI ID is settled into the business’s bank account linked with Razorpay.

What is in it for the businesses?

Thus, creating a virtual bank offers a seamless payment to the customers and gives businesses the flexibility to businesses. With lockdowns and the effects of pandemic persisting, the future of payments will be dominated by digital mode, thus businesses must pivot to virtual bank accounts for convenient reconciliation. So, without much wait, start using smart collect to create virtual bank accounts now.

The post How Can Businesses Reconcile Using Virtual Bank Accounts? appeared first on Dutch Uncles.

What are the steps a start-up must traverse in the IPO process?

Bhuvana Rajaram — Fri, 16 Apr 2021 10:35:03 +0000

While the coworking unicorn start up WeWork Initial Public Offering (IPO) debacle of August 2019 is fresh in the minds of start -up founders, it has also made them watchful and wary now. In a dramatic turn of events, WeWork brought down its valuation from a whopping $47 billion to a paltry $10 billion and removed its maverick CEO, Adam Neumann.

The global start up economy contributing to a behemoth $3 trillion in value has been tossed about during the pandemic crisis with a severe drop in VC funding and consumer appetite, leading to several closures and layoffs. It is common knowledge that start-ups in the Travel and Tourism and Automotive industries have taken a severe beating while Technology start-ups have manged to keep their heads above water.

The flip side is that the start-up sector is still eyeing the IPO as a coming-of-age sign in their growth trajectory. Many are making a beeline to the Wall Street, very recently Airbnb made waves with raising $3.7 billion after it priced at $68 per share. Digital transformation has been the game changer catapulting many start-ups focusing on cloud computing, analytics an artificial intelligence to float for IPO.

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The flip side is that the start-up sector is still eyeing the IPO as a coming-of-age sign in their growth trajectory.

Why should start-ups go in for an IPO?

Apart from raising the obvious ‘capital’ for the enterprise, seeking an IPO establishes fairly and squarely its merit worthiness. If you are a start-up operating with a long-term vision, it affords you cash flow, liquidity, employee shares, investors to exit and overall stature increases manifold. And one of the other key elements here, is the market exposure, because once public, the chances of expansion is more likely with people from across the globe finding and investing in you. And this is a fillip for the start-up brand. The rigour involved in getting listed can be enormous making the start-ups not just be satisfied in projecting numbers but also be rooted in firm – market and business fundamentals along with differentiated business models with high margins. Not to say that once publicly listed, there will be a loss of autonomy, perennial pressure for performance, mandatory compliance requirements, nevertheless, it is a dream moment for every start-up to cement their position in the world of business.

What are the 3 keys that tell you that your business is ready for an IPO?

The Core of Your Business

The very fact that you have a dependable product/service, you have the best team to continually improve it, you have the customer problem in the central, and you go all out to provide lasting solutions for this – is what will make you tick in the public eye. It can be tempting to put some quick runs on the board and resort to short term growth strategies, but public opinion resides on slow and steady, and in start-ups being a consistent performer with an enviable track record. As a start-up knowing this core, staying true to it, ensuring that this is driving every expansion tentacle is the first key that will demonstrate your readiness to go public.

The Agility of Your Business

Business decisions will play a humongous role, either it is playing pivot to change directions, or diversifying quickly into related areas, or entering new geographies to expand, or bringing in the requisite specialized talent, or deploying the necessary technologies to scale, a sharp business acumen to be on top of the game is crucial in your journey towards IPO. Start-ups will need to double or triple business volume in two to three years, so determine that goal and work towards it to make strategic moves that take you towards it. As a start-up your immense business knowhow and adaptability to market dynamics and customer demands will be the next key that will show you in unequivocal terms your readiness to go public.

The Reliability of Your Business

When you are in a pre – IPO state there are many things that you are expected to do. Simply because the public is not satisfied with one of your hallmarks, they want you to be hot, leading the race, gathering momentum, rolling out cool products, partnering with reputed names in the industry and so on. So, you must earn their trust, and through it all be original and genuine. It could be giving back to the society, or standing up for your employees, or connecting with employee families, little acts can do wonders to establish you as a trusted and reputed start-up in their mind. As a start-up your brand persona is being built every second and this the third key that puts you on the path to IPO.
The above keys are interrelated and act as cornerstones in providing you an honest report on your eligibility criteria to go public. And gives you a chance to insulate your start-up from the market dynamics that you cannot control.

What are the tenets that prepares you for an IPO?

The run up to the IPO can be laborious and long drawn process that can quash the groundswell of enthusiasm of any start-up, but if a plan is ready with the right team – then it becomes a largely a doable accomplishment. And what exactly makes this doable?

Financials form the fulcrum of this trek up, getting a trusted committee in place replete with specialists spanning risk, finance, audit, legal, taxation and regulatory body, banking, underwriting will be the first and foremost activity that a start-up should undertake. And this is a committee that has a significant exposure to IPO guidelines and must have experience in handling large scale IPO deals and clearly steer the start-up in the direction of going public.
Technology will be the next step that aid the reporting of financials. Large amounts of data, history, present and predictions will have to be dynamically generated. Manual reporting, Excel spreadsheets and simple data analysis is not only not scalable but is prone to error and drags the process. Smart use of technology that integrates quickly with other systems and can dynamically populate data dashboards for analysis will be the need of the hour.
Process rigour internally can be instrumental in assuring a clean house. Regular auditing, controls and checks must be implemented and conducted based on a set cadence. This will unearth financial irregularities and enable a quick course correction instead of a massive financial quagmire later.
Transparency is another pivotal piece in the IPO pie. Conducting frequent roadshows to meet investors, analysts, bankers and sharing start-up financials establishes credit worthiness. Honest and frank reporting on earnings, cash flows and outlook can turn out to make the start-up be seen favourably in the public eye. The start-up needs to be perceived as an entity in control of the affairs with access to large acquisitions that will open avenues for cash. And this will ensure that as a public company you can swim in deeper seas and not just in safe shallow waters.
Risk is another force that the start-up will have to mitigate. Insider trading, false representations, misrepresentation of financial data, employee speaking out of turn and fraud are some of the risks involved. Start-ups will need to address these litigation hurdles and be prepared to fix them and ensure quick corrective measures so that they don’t dent the start-up image. Also, as a public company it is more exposed to market volatility and the public will not hesitate to jump out and board another bus. So, preparedness to handle sudden and abrupt plunge in stock prices is paramount.
Timing can make or break a successful IPO. While start-ups may have all the above in perfect order, if they miss to market watch and roll out the IPO when the market is not bullish it will lead to aborted or unsuccessful IPOs. So, working with analysts and experts and assessing the market and launching when the demand is high with public in full support can make the journey seamless.

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As a start-up knowing this core, staying true to it, ensuring that this is driving every expansion tentacle is the first key that will demonstrate your readiness to go public.

What exactly steps should a start-up take to go public?

The below list comprises milestones that lead up to the IPO and once public.

Have you selected an investment bank associated with the regulatory body? They collaborate with the start-up to provide underwriting services in issuing the IPO. Careful selection based on reputation, network, expertise will be helpful in staring on the right note.
Have you methodically scoured through the due diligence paperwork that the underwriter draws up, ensuring the clauses and contracts are accurately documented?
Have you partnered with the underwriter to conduct roadshows to glean information on the demand to prepare number of shares to offer?
Are you ready to Go Live after ensuring the above aspects are ticked off along with the under writer to launch the shares in the market?
Have you monitored and used wisely the period following the listing where there are no rules determining the price?
Finally enter the market, after which it is only the market conditions and the start-up performance that ascertains the share price.

The IPO Floats from around the world

Global

Some of the recently concluded and much anticipated IPOs of 2021 globally are Compass, UiPath, AppLovin, Joann, Thoughtspot, Rivian, Coursera, Instacart, Robinhood, Databricks, Nextdoor and Ascencus.

Europe

While Silicon Valley has hogged the limelight in start-ups venturing ahead with IPO, in Europe start-ups looking to be listed are Moonpig, Deliveroo, Transferwise, WorldRemit, Draktrace, Music Magpie Trustly, Kahoot, Trustpilot, Truecaller, Epidemic Sound and Valuer.

China

In China, a large crop of start-ups went public in 2020, and the pace seems to be only growing with Megvii, Yitu Technology, CloudWalk Technology, and talks of ByteDance’s Douyin and Toutiao and Didi Chuxing making the foray as well.

Russia

Signs are encouraging with several companies filing for IPO and expecting to raise $10 billion. A gold mining organization GV Gold, recently announced plans for an IPO, while the Russian eCommerce firm Ozon was listed on Nasdaq in November 2020.

Middle East

As for Middle East, Saudi Arabia leaped ahead with a spate of IPOs such as Dr Sulaiman Al Habib’s $700m IPO, Amlak International, BinDawood Holding and the gargantuan Aramco. And UAE is likely to go public with MAG Development and Seafood Souq General Trading.

Done right, start-ups can make it to the big league with an IPO, however, that can be the start of another major journey. And here, the responsibility of conducting business operations as a public company is steep and start-up owners need to be cognizant of this expectation.

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Upskilling: The New Mantra for Small businesses

Shalmoli Sarkar — Wed, 31 Mar 2021 06:35:10 +0000

Series of lockdowns in the pandemic that stretched over three to four months brought tremendous losses to the MSME ( Micro, Small and Medium Enterprises ) sector. Though market restrictions have been lifted, the losses incurred during that period persist and are a huge blow for the MSMEs. With fresh new cases arising in 2021, the state government is looking forward to imposing lockdown again. Small and traditional businesses, to cope with the current pandemic, need to pivot their business operations to digital platforms or have a digital presence. Here, upskilling will play a major role.

As per the MSME Annual Report 2020-21, there are 63.4 million units of MSME businesses nationwide that contribute 30.27 percent to India’s GDP also employing 120 million people, hence making this sector the bedrock of India’s growth. The MSMEs lack the digital know-how to operate a business online, accept payments online, marketing businesses online which stood as a hindrance for continuity of business for the MSME sector. To keep businesses afloat in such harsh times entrepreneurs and small business merchants are stepping forward to upskill themselves with the new skillsets and unlearning outdated business practices to survive in this fast-evolving digital world.

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As per the MSME Annual Report 2020-21, there are 63.4 million units of MSME businesses nationwide that contribute 30.27 percent to India's GDP also employing 120 million people

How will upskilling be beneficial for the MSMEs?

The apprehensions of stepping out in the pandemic yet lingers at the back of people’s minds, due to which customers will continue online buying of groceries, non-essentials, appliances, etc. Here, small businesses should not fail to digitise their business operations.

India’s biggest conglomerate Reliance has launched JioBusiness that offers enterprise grade-level fibre connectivity, digital solutions and devices to empower the micro small, and medium businesses. It aims to bring together 50 million medium and small-scale businesses online.

Apart from conglomerates, B2B retail trade platform Udaan connects retailers and businesses to source merchandise from manufacturers, brands, white labels, importers, etc. on a single platform. It currently houses 30 lakh small and medium-scale businesses and retailers. Thus, small businesses need to upskill themselves to be able to run businesses online.

What Upskilling initiatives Companies are providing for MSMEs?

MojoVersity

Instamojo, India’s largest on-demand payments and e-commerce platform for startups and MSMEs has launched MojoVersity an online skilling platform for small business owners to provide them with the digital knowledge to start a business online. The MojoVersity platform has a total of 9 courses that consists of essential topics such as GST, email marketing, sales funnels, hosting webinars, business accounting, public speaking, MS Excel, etc. According to a recent Instamojo report titled ‘Indian e-commerce Outlook 2021’ its online skill learning programme received 40,000 new unique visitors, out of which 30% were female learners. The platform also witnessed learners from merchants belonging to Tier-II and III cities. 42% of the learners chose to learn skilling programs on their mobile devices.

Google for Small Business

Similarly, tech giant Google, under the ‘Make small strong’ initiative, has launched Google for Small Business to upskill the small business owners with knowledge of digital skills and tools for free. The skills training is in the form of quick help videos that will aid the MSMEs to do business online. The skill courses are divided into three segments namely :

Digital unlocked: Contains 90 self-paced video tutorials which offer quality training on a comprehensive set of topics right from building a web presence and driving online growth to reach customers over mobile to email marketing to social media marketing.
Primer App: It is a free educational mobile app that offers quick, bite-sized, jargon-free video lessons to help business owners and individuals learn new skills in digital marketing and business. The five-minute lessons cover topics like business planning, management, sales, customer satisfaction, online advertising, analytics, etc.
Skill shop: To develop digital marketing skills, Skillshop has e-learning video courses ranging from Google ads to analytics to ad manager, where the learner gets certifications of the course completed.

Areas of Upskilling in which MSMEs are focussing on

Instamojo’s report titled ‘Indian e-commerce Outlook 2021’ revealed MSMEs took interest in the below areas to upskill themselves

Financial stability was disrupted in 2020 for most small businesses. To insulate themselves from the cash crunch, MSMEs took interest in learning the aspects of financial discipline and fundraising.
Simplifying business processes and systems has attracted MSMEs, as they have realised that improvement of work processes and systems will gain a competitive advantage in cost and delivery.
Digitisation in businesses such as digital marketing, e-commerce adoption, automation in business processes are garnering attention from MSMEs. They are realising that if your business does not have a digital presence, then it cannot survive in the long run.
MSMEs are taking a keen interest in export and import business since the political tensions with China have strained.

For the MSMEs

Looking at the massive response of MSMEs willing to upskill themselves, these enterprises have showcased their willingness to learn new skillsets and ramp their business operations online. With a deluge of smartphones and cheaper internet plans penetrating deeper into rural India, there will be an increase in online shoppers. Thus, more and more MSMEs shall be interested in upskilling themselves with new skillsets to establish businesses online.

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How to Sell Online Without a Website

Shalmoli Sarkar — Tue, 30 Mar 2021 01:35:05 +0000

Sushilaben was distraught. With lockdowns announced, her famous Khakhra shop was forced to remain closed, which gave hiccups to her revenue. Sushilaben, initially a homemaker, began her business of selling homegrown Khakras at the age of 40. To insulate her business from further losses, she sought refuge in her new selling channels- Whatsapp groups and Facebook. Yet, her main hindrance remained in collecting online payments in a simplified manner. Sushilaben never thought of having a website, as her shop majorly operated locally. In India instances like Sushilaben are no unique, the small business owners who do not have a website and lack knowledge of online payments will prove to give massive headwinds to their business. Shifting business online which seemed earlier an additional expansion plan became a necessity in the pandemic for the MSME sector. Small businesses in India stared at losses that left them in a precarious position of closing their business permanently. In such testing times, MSMEs pivoting their business online quickly is a near-impossible task. Many MSMEs want to sell online but major investments for website development and less deep tech knowledge for integrating a payment gateway discourages them from doing so. Instead of investing in building a solid, functional website and taking pains to host it all the way to integrate the right payment gateway, MSMEs can accept payments online without having their business’s website or app using payment pages from Razorpay.

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Shifting business online which seemed earlier an additional expansion plan became a necessity in the pandemic for the MSME sector.

What are Razorpay’s Payment Pages

Whether your business has a website or not, the payment pages from Razorpay are designed to accept payments from your consumer. One can effortlessly create a payment page within less set-up time to go live and start accepting payments from your customers from all over the world. The payment pages can accept payments from 100 international currencies that require no coding experience or support. It helps your business with end-to-end payment collection by allowing you to create a payment page without the need of hosting it. We can also link the payment page to the social media page or can send the payment page links to customers.

Features of Razorpay’s payment Pages

List multiple products

Business owners can list any number of products or services that they wish to sell on the payment page, also including images and descriptions for each item that we list.

2. Setting limits on purchasing

To prevent underselling or overselling of inventory the business owners can set limits for the minimum or maximum number of products to be purchased by a customer. NGOs and charitable organizations can fix a minimum amount for the patrons to donate.

3. Rearranging the items

Items that have been purchased recently can be displayed high on the payment page by dragging the input items or fields upward or downward.

4. Collect customer data

From an array of input fields supported by payment pages, business owners can capture customer data. The input fields range from phone number to email to PAN number and PIN code. Business owners can select the appropriate input field to ensure proper validation.

5. Reporting

Small business owners can receive a comprehensive report on each item sold, basis on real-time transactions from Razorpay’s dashboard to help make informed business decisions.

6.Works on Mobile as well

The payment pages are mobile-friendly where customers can pay swiftly by just clicking the button with the freedom of choosing from many payment modes.

7. Can be embedded on the website

If the business owner has a website that is not integrated with any payment gateways, they can embed the payment pages CTA in the website where you prefer the call for action. On a single click, the customer will be taken to the respective payment page.

8. Redirect your customer

We have the autonomy to customize the text on the CTA ( Call to Action) and can also redirect customers to the merchant page. After every payment process, we can also show a custom message to show the payee that the payment was successful.

Use cases where payment pages work wonders

Below are the use cases where payment pages reduce time and cost :

Selling tickets for events: Let us say you are organising a one-day marathon event in your city. But your only hiccup is that you don’t have a website and any means to collect payments online. Creating a website and integrating a payment gateway seems economically unviable and time-consuming for a single-day event. Here, the Razorpay payment pages come to the rescue by giving you the functionality of a webpage that can be customized to suit your brand hosted by someone else but accepts online payments for your event with a custom URL. We can choose the input details in the payment page that we want to collect from the participants such as age, email id, past marathon participation, etc. The payment page can be shared across emails, SMS, and social media pages, etc. It helps you with end-to-end payment collection.
NGOs and charitable organisations: For NGOs and charitable organisations the pandemic was a rugged year for procuring essentials and raising funds for the cause. NGOs with no cost can create a payment page link as the landing page to accept donations from more than 100 international currencies. The payment pages allow contributors to donate through multiple channels such as credit cards, debit cards, wallets, netbanking, and UPI. There are no hidden charges or extra costs for creating a payment page. For NGOs that have a website, they can add a code to the website and start accepting payments, and then with the Razorpay payment button, we can add an integrated checkout with payment gateway on the website and accept donations without any integration or coding efforts.
Payment pages for social media businesses: Business owners who have been sharing their bank account details with the customers to date can create payment pages and share them across Facebook and Instagram. After creating the payment page we can just link the payment page to the social media profile where we can accept payments or send the payment link to your customer. Accepting payments through the payment pages are secured with 100 % PCI DSS compliant and certified solution.

Creating the payment pages on Razorpay

Creating payment pages from Razorpay is a no-brainer. But, before we create below, are some prerequisites.

Firstly, we need to sign up for a Razorpay account.
After logging into Razorpay’s dashboard, fill in the Know Your Customer requirements.
To test the payment pages, Razorpay’s dashboard has test and live modes. The test mode is a replication of Razorpay in a sandbox environment which becomes available as soon as we complete the sign-up process. It allows you to test all aspects of your integration before you go live. The payment page created in the test mode does not go live and after thorough testing of the payment page, we can switch to the live mode and start accepting payments from the customer. Sometimes, payment Buttons created in the test mode do not appear in the live environment, thus one must create a new Payment page on live mode.
Understanding the payment flow

Generic Steps to create payment page

After logging into the Razorpay dashboard, navigate to the payment pages present at the left bottom of the page.

2. On clicking the payment pages, we need to click on ‘create payment page’.

3. It will showcase five payment page template options.

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Accepting payments through the payment pages secured with 100 % PCI DSS compliant and certified solution.

4. After selection of the payment page template, we need to add page details that require both business and payment details section.

In Business details

For business details we need to add a page title which should not be exceeding 40 characters and a brief description for the page, to make the page more alive images and videos can also be added. To make the payment page shareable on social media, we need to click on the option, ‘ Add social media share icons. For extending any assistance add your contact information such as mobile number or email id. Click on add terms & conditions to add terms of business.

In Payment details

To fill in the payment details we need to configure the price fields. The price fields are the price tags of products or services that we intend to sell.

We can configure the price fields in three ways –

Item with Quantity : We should choose this when we want the customer to buy more than one unit of the item. We can also set upper and lower limits of units that a customer can buy.

Opt for this if you want the customer to buy more than one unit of the item. You can set additional parameters for minimum and maximum numbers of units a customer can buy.

Fixed Amount : We choose this amount when we want the customer to buy a single unit.

Customer Decides Amount: This mostly happens in the case of donations if we want the customer to enter the donation amount. We can set additional parameters for the minimum and maximum amount a customer can enter.

Customizing the pay button label

We can customise the pay button label by labelling it as book tickets, pay now, etc.

Configuring the payment receipt

By selecting the automated receipts we can ensure that the customers receive payment receipts via email once they complete the payment.

Configuring the page settings

Choose a custom URL for the page, this is available only when in live mode. Enhance the look of the payment page with a light or dark theme.

Publishing and sharing the payment page

After saving and publishing the payment page, a URL appears that we can copy and share. If we have a website, then we can embed the payment page button on the website, the customers can click on this button to open the payment page and complete the payment. In the pop-up that appears, customize the button text and select the button size and then copy the HTML code to be embedded on your website and select done.

Thus, with the above-mentioned steps get started to accept online payments through payment pages.

The post How to Sell Online Without a Website appeared first on Dutch Uncles.

Udaan: A Flight of Success

Naina Sood — Tue, 09 Mar 2021 04:35:03 +0000

For three years, Raju Sahu, a common man, travelled 20kms to buy products for his kirana shop (mom-and pop store). A simple smartphone changed the way he works today.

One fine day, Sahu was approached by a team of local techies, who informed him how he could use his smartphone to source his products for the Kirana shop instead of travelling all the way to the city. The team helped Sahu download an app, learn the application and its usage. Initially hesitant, Sahu’s entire sourcing is now done on his smartphone through that app. And why not? He gets his products on time, has a variety to choose from, returns easily, the price range is affordable, can avail credit and most importantly, has help and advice to grow. Sahu doesn’t have to move places or seek credit from local lenders or wholesalers at a high interest rate anymore. In short, a smooth sailing with just an app.

Now imagine 3 million Sahus (traders, manufacturers, wholesalers and retailers) on that single platform provided by Udaan. That’s an idea for disruption and something to take inspiration from.

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Within a short span of about 22 months of operations, Udaan had gained a significant foothold in the market. It had been able to onboard about 1,80,000 sellers and buyers on the platform.

The Inception of Udaan: ‘Let’s Build Together’

You are able to understand the problem better when you have first-hand experience of the same and hence come up with better solutions. The Udaan trio, Sujeet Kumar, Amod Malviya, and Vaibhav Gupta, grew up in small towns of Uttar Pradesh and Bihar where shopping was a hassle as they had to travel all the way to the nearby city. They understood the pain point of the customer, the local kirana uncle and the city retailer.

This was the trio’s first inspiration to come up with Udaan’s business model. This was built up during their respective stints in Flipkart where they noticed that the company provides logistics to over 500 cities but their small hometowns were not one of them.

Before the conception of the ‘idea’, the trio of IITs had one thing clear on their minds – to work together. Kumar, who worked as the President of Operation at Flipkart, and Malviya, as Chief Technology Officer, had quit the company in mid-2015. They had gone to visit Gupta – then on a sabbatical as Senior Vice President at Flipkart, Seattle in October 2015 when the brainstorming of creating something disruptive happened.

They had gained enough exposure on the retail market structure, the challenges and the gaps that need to be filled, especially with small business owners. The initial idea was simple – to streamline the B2B market by bringing small traders, retailers, manufacturers and wholesalers on one large single platform and discover the best-value for money and access to a wider selection of catalogue.

In 2015-16, the trio began with their market survey and analysis. They reached out to merchants, retailers, and manufacturers to understand, discuss terms and negotiate besides visiting several wholesale markets across the country to witness the ground action.

It was in February 2016 when the decision to venture into the B2B marketplace had been made. After all the research, the trio launched the beta version of Udaan in November and threw it open for public, announcing a Series A fund-raise of $10 million from Lightspeed Venture Partners at the same time.

A wider launch took place in June 2017 when the company had curated enough users. Udaan, which means ‘Flight’ (metaphorically equivalent to freedom to explore and live to the full potential), began operations as a logistic platform for buyers and sellers in staple, electronic and apparels. This helped the company understand the demand and supply in these categories, to begin with, and build a relationship in that space. They became more aware of ‘who is buying/selling what’, besides building a database of buyers and sellers.

Within a short span of about 22 months of operations, Udaan had gained a significant foothold in the market. It had been able to onboard about 1,80,000 sellers and buyers on the platform and had even set up a team in China for sourcing sellers in apparel, smartphones and electronics. In February 2018, the company had again raised around $3.2 billion from its existing investor Lightspeed Venture and Russian Billionaire Yuri Milner’s Apoletto Fund. Within 7 months, the company announced Series C fund-raise of $225 million from Lightspeed venture and DST Global and became the fastest Indian start-up to reach Unicorn status, soaring to the $1 billion valuation milestone in merely 26 months of registration. This was a record. It took almost four years for similar start-ups like Swiggy, Hike and InMobi to enter the billion dollar club.

The goal of ‘largest variety at the lowest cost’ was achieved. Now, all the manufacturers can present their product on the platform, and interested traders had the freedom to select and buy it. Retailers and wholesalers also had the same freedom to advertise and buy a product with secure payments and logistics.

Marketplace, Logistics, and Lending: A Perfect Marriage!

First came marketplace, then logistics and finally lending. Charging commission on transactions and for logistics was the core source of revenue for Udaan, but not the ultimate. The company was eyeing bigger opportunities through lending and hence becoming a full stack platform for SMEs (Small and Medium-sized Enterprises).

This made sense for the company as the majority of the lending companies in the B2B space focussed on mid sized sellers with credit history, neglecting the smaller merchants. Udaan was sitting on a golden opportunity here with an advantage, especially in comparison to other start ups in this space.

The company had built a pool of knowledge starting from the financial health of small sellers and buyers through their transaction history to understanding their capital requirement and recovery position. Thanks to technology and data, offering loans (working capital for retailers) without additional manpower, was the perfect proposition for Udaan.

In November 2018, Udaan had secured a Non-Banking Financial Company (NBFC) license, to be able to disburse loans to its retailers and sellers. It also provides accounting, order management, and payment management solutions to merchants on its platform.

They provide a credit limit to the only verified buyer that too if is eligible for the limit. At first, they will provide Rs 1,00,00 credit with no interest charges then the credit limit will be increased to a maximum of Rs 2,50,000.

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Rather than expecting traders to change their traditional ways of doing business and conform with a rigid set of rules, Udaan enabled users to trade the way they want to.

Making Money

As an asset-light company, Udaan’s major source of revenue comes from logistic service. Besides the delivery charges, it also charges fees for collecting any return of sales from the customers. Second is the revenue from storage and warehousing services. Sellers are charged a fee for such services. Third is the fees from receivable collection services which include fees for collecting payments from buyers in cash on behalf of the sellers or fees for accepting payments online on behalf of the seller.

Fourth is the advertisement services it provides to its sellers on its platform where their listings can be promoted with a fee. Fifth is the interest it earns from credit. Interest income from loans is an important source of revenue for the platform. Udaan also earns from other fee-based value-added services like packaging and printing of labels on products, printing of invoices and returns management service.

No CEO: The Power of Decentralisation

The founders did not find any sense in having a CEO for the company. Why? The foremost reason for this was the company’s structure.

The e-commerce platform is a pure-play horizontal marketplace which doesn’t focus on a particular product or a sector. A horizontal structure represents a belief that involving employees directly in the decision-making processes and minimising management supervision of employees increases productivity. For instance, if there is a problem, people do not go looking for an answer. They try to figure out something, and then they start scaling, keeping everybody in the loop.

Designation was never important for the founders. Gupta had once shared his co-founder’s card with a buyer who, quite puzzled, had asked him what a ‘co-founder’ meant. Gupta suddenly sensed a disconnect. So, the next time he went, he gave the buyers a sales executive card, and that worked with them. He was quick to realise that designations do not matter in his field of work.

Nothing Great Comes Easy

To make something successful, especially that big a stature, is no cakewalk. Building B2B e-commerce from the scratch is a challenge in itself, starting from complex logistics to technology integration.

Besides the technicalities, the founders had the biggest challenge of convincing businesses to come online. Weaning small retailers away from local relationships they have built over the years was a tough nut to crack. Targeting tier 1 and 2, the team went on the ground, spoke to retailers, suppliers, and tried to understand their roles before launching their product. Post the launch, the team worked towards building the massive network of 3 million users it has today.

Scaling was also a challenge, given the horizontal structure of the company, whether it was adding new products, building supply chain capabilities or offering credit. Besides challenges in product cataloguing and logistics, the company faced hurdles with respect to payments. In B2B, only two modes of payment work — cash or credit — unlike B2C e-commerce where options of credit cards, debit cards, cash and net banking are provided. Initially, the company failed to model and improvised later.

For Udaan, Timing is Everything

A lot of things played in Udaan’s favour, especially timing. Besides, having an early movers’ advantage against its large rivals, crunching off expensive data prices came as a huge advantage for the company.

Udaan’s major requirement was tech penetration and adoption. In 2016, Reliance had entered the Indian telecom industry with 4G network and smaller towns, especially remote areas, had started to undergo a major change with cheap data and advertisements. A lot of dealers on Udaan’s platform today are first time internet users while some were completely unaware of any other role of a smartphone besides WhatsApp. As soon as the data reached the villages, Udaan took a flight.

The founders also credit some of the success to the 2017 Goods-and-Services (GST) tax. After GST, moving goods across states became much easier and helped solve the logistics issues which were driven by multiple rates and high compliance costs. When Udaan had started out, majority of the players in the B2B segment were vertically focussed like Power2SME in industrial products and Bizongo on packaging materials while horizontal platforms like ShopX, Wydr had not gained enough momentum and were still figuring out the unorganised market.

Besides the idea, handwork and execution, Udaan had money. The start-up had managed to duck most of the challenges due to its massive war chest. With reach, scale, ambition and finance, Udaan was able to put things at place and became the leader of the pack.

What They Did Right

Initially, the company did not charge almost anything for the logistics. Doing logistics at subsidised rates gave the company gain sufficient exposure within the community besides the right market share.

Most of the start-up launch the app first and then go about validating the same. Udaan did the opposite. It first made its product relevant enough to be accepted and launched the beta version before the official launch. They spoke the language of their target audience, kept themselves abreast with the ground realities. Rather than expecting traders to change their traditional ways of doing business and conform with a rigid set of rules, Udaan enabled users to trade the way they want to.

Above all, a strong founding team was the company’s most valuable asset. The team members, majorly comprising ex-‘flipkartians’, were best at what they did — logistics, supply chain, product development, management, IT, etc. They had quit their jobs and extended support with the founders’ trio and implemented the best practices they had learnt over years at Flipkart, only with slight change in focus towards smaller towns.

Udaan has taken over 80% of the B2B e-commerce market, delivering goods it stocks in 200 warehouses to more than 1.7 million retail stores in 900 cities everyday. The company kickstarted the year 2021 with a fund-raise of $280 million from new and existing investors as the start-up builds a war-chest to accelerate its growth and fend off rivals. The company’s valuation stands at $ 3 million post investment.

There are often talks about Udaan taking on the likes of Amazon, Flipkart and Jio Mart. However, front-end retail is not even on the focus list of the company, which is eying a much bigger lucrative opportunity in B2B e-commerce. The per-unit profitability in B2B e commerce is five times that of B2C e-commerce and eight times the market size. Udaan is at the forefront of this ‘uniquely Indian’ e-commerce opportunity.

The post Udaan: A Flight of Success appeared first on Dutch Uncles.

How Razorpay and Mastercard will help MSMEs to build digital footprints?

Smruthi Krishnan — Sat, 20 Feb 2021 06:35:04 +0000

Razorpay and Mastercard have partnered up to help several micro, small and medium scale enterprises also known as MSMEs across India to transform their operations to the digital landscape as times change and the business paradigm shifts into a cashless market. Mastercard and Razorpay launched a partnership which puts together Razorpay’s payment processing capabilities along with Mastercard’s trusted and secure digital banking solutions and card services.

Criteria for MSMEs

Based on the criteria of Investment in Plant & Machinery/equipment and Annual Turnover, MSMEs were classified in July 2020 as follows:

Micro Enterprises: Not more than Rs 1 crore investment and Annual Turnover not more than Rs. 5 crores
Small Enterprises: Not more than Rs.10 crore investment and Annual Turnover not more than Rs. 50 crores
Medium Enterprises: Not more than Rs.50 crore investment and Annual Turnover not more than Rs. 250 crores

Shift in Retail Payments Scenario

The pandemic led to a lot of changes in the retail payments of India as more and more people shifted to cashless transactions. Prior to the pandemic, nearly 90 percent of retail payments in India were transacted via cash. However, post pandemic there has been a rapid shift towards digital technologies and a change in the way consumers shop and pay. The end result is a potential expansion of digital payments in India which has opened up the gates for merchants, acquirers and Fintech companies to invest in such directions.

As the future in the payments industry seems likely to become more digital, SMEs and start-ups need to establish a stronghold in digitalising their companies to increase consumer base and meet the demand for secure, convenient and touch-free transactions. As MSMEs often do not have the means to make such transformations, Mastercard and Razorpay’s partnership will work towards helping MSMEs make the necessary changes.

Partnership between Razorpay and Mastercard

The Fintech Revolution is bound to alter the payment and banking experience of consumers and businesses. The market is evolving to cater to different sets of consumers and businesses. Mastercard being the global payments and technology leader will further induce digitalisation and help small scale businesses in adopting industry-leading technologies that help ensure efficiency.

At the same time, recently turned Unicorn, Razorpay will help merchants across India become digitally and technologically equipped providing them safe, secure ways to make payments. The two companies will also work together on making recurring payments more accessible to businesses and consumers. They will create consistent onboarding solutions for bill payments, digital content platforms and other subscription services.

We hope that the partnership will be a successful one and will help create a positive transformation in the digital payments space whilst uplifting the small and medium businesses in reaching the level of digitalisation that the future economy requires.

The post How Razorpay and Mastercard will help MSMEs to build digital footprints? appeared first on Dutch Uncles.

How SaaS Can Help Your Small Business To Grow

Naina Sood — Sat, 20 Feb 2021 02:35:03 +0000

Streamlining both internal and external processes using technology has become an imperative for start-ups to survive in the market and cloud-based SaaS (Software-as-a-Service) services are taking good care of that. There has been a surge in state-of-the-art SaaS tools that are helping start-ups and small businesses to grow, starting from understanding user behaviour, managing sales, up and ready websites to accounting and social media.

What is SaaS?

SaaS is a cloud-based service where instead of downloading a software on your computer, you instead access an application over the internet on a subscription basis. A small business can leverage these SaaS solutions to grow in the following ways:

Reduce application cost

Every business needs less application cost and SaaS comes with this advantage. A start-up can significantly lower its cost by using SaaS solutions and invest the capital in other areas while having a secure and flexible business system.

Know your market

Gaining market insights is extremely important for a small business to understand the customer needs and deliver the product. Start-ups can, for instance, use Google Analytics, Heap, Chartbeat, Piwik and other SaaS applications to dig deeper into how customers engage with your site. With Google Analytics, you can measure traffic metrics for your website, categorise all visitors by traffic type and even group them on the basis of their country.

Customer support

Every start-up must have good customer support to survive in the market. Online cloud-based customer support softwares like ProProfs Help Desk and Freshdesk can help a start-up with a seamless support system. They provide a help desk ticketing system which can be easily set up in minutes and are available 24×7. These softwares also integrate well with Live Chat, Phone Support, and Game Mechanics, and offer a mobile app so you can take your help desk everywhere you go.

Free from accounting hassle

Time tracking and invoicing are a key element of the project management process for any business. Online accounting software solutions like Xero, Freshbooks can help small businesses to view their cash flow and manage their account transaction from anywhere in the world. They do not need any expertise in this area or hire a separate resource to manage the accounts.

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Online cloud-based customer support softwares like ProProfs Help Desk and Freshdesk can help a start-up with a seamless support system.

Marketing, social media management

There are a great number of sophisticated apps and SaaS solutions that a small business can use to take care of the marketing department, which otherwise can be expensive. HubSpot, Buffer, Infusionsoft are some of the platforms which are budget-friendly and work on end-to-end solutions so you do not have to worry about your product’s overall visibility in the market.

Data protection and storage

For a start-up to grow, it is important to keep the data protected as they are the most vulnerable to cyberattacks. Besides, data storage can be expensive. Cloud-based SaaS applications are automatically updated to make the data more secure and come with inbuilt storage solutions as well.

The post How SaaS Can Help Your Small Business To Grow appeared first on Dutch Uncles.

How E-commerce Helps Small Businesses Go Global

Avijit Dutta — Fri, 12 Feb 2021 10:35:02 +0000

The Defining 90s

The year was 1991. The World Wide Web was introduced. Later in 1994 the first browser, Netscape was launched to access the internet effectively. These two innovations triggered mass adaptation of E-commerce back in the mid-1990s. In 1995 Bezos launched Amazon and later in 1998 Omidyar launched eBay. The world of retail was never the same again. E-commerce disrupted the traditional business models in retail. It not only took away a few barriers to entry but also eased out a couple of significant shortcomings in the traditional retail model resulting in a level playing field for an incumbent.

Who is This Article for?

In this article, we will identify a key factor among many others that drive growth in E-commerce from the perspective of SMBs who are selling through:
E-commerce marketplaces such as Amazon, Flipkart
Social commerce platforms such as Facebook marketplace, Meesho etc, or
its own E-commerce sites.

Why E-commerce?

Before we dig deeper into the growth factors let’s summarise the top three benefits of the E-commerce model comparing and contrasting it with traditional brick and mortar retail.

Discovery

E-commerce platforms allow a buyer to discover the merchandise of her preference like no other physical store can offer because of two reasons. First, the online nature of the catalogue allows a repository of unlimited inventory of items. This enables the discovery of even a niche or low-frequency purchase product to be available in the online store offering a high degree of variety to a buyer. Second, the instant search capability of an eCommerce platform allows the buyer to get to her preferred merchandise in a fraction of a second. Unlimited catalogue and an efficient search function make eCommerce format the king in the long tail of retail. There is a discovery of another kind that triggers purchase actions: price, a significant decision point for a buyer before making a purchase. E-commerce sites allow for easy comparison of merchandise within and across platforms (comparison sites). In traditional retail, this would require significant legwork.

Convenience

E-commerce happens remotely, from the comfort of our homes, offices or even while on the go through mobile commerce. The ease of discovery, ordering, payment, tracking delivery and customer support through chat, email, call 24×7 makes the customer truly the king from the perspective of convenience. Traditional retail doesn’t have such a degree of convenience.

Quality

Most E-commerce platforms and marketplaces have well-defined processes for grievance redressal, returns, refunds and disputes. Moreover, customers are encouraged to publicly rate and review every transaction on product quality, experience of after-purchase customer care to enable transparency and trust on the platform for both the seller and the buyer. This acts as social proof and fuels growth for the deserved one.

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Unlimited catalogue and an efficient search function make eCommerce format the king in the long tail of retail.

Challenges in Growing an E-commerce Business

Since E-commerce technology has lowered the barriers to entry of incumbents by creating a level playing field, the result is fierce competition among sellers. Though it is good news for the buyer, the seller struggles to earn the loyalty of buyers. The unlimited choices of sellers in front of the buyer coupled with instant price discovery have made the buyer extremely demanding on quality as well as price.

What’s concerning the sellers in this scenario you may ask? Such competition often ends in a price war amongst sellers. As we know a price war triggers a vicious cycle of lowering and further lowering of prices to beat the competition to secure orders until it becomes completely unviable.

Moreover, acquiring a new customer attracts a cost called a Customer Acquisition Cost (CAC). These are marketing expenses such as ads, offers & promotions associated with acquiring new customers. Now, the total estimated amount a customer will purchase in her (purchase) lifetime is called a Customer Lifetime Value or CLV. If CLV is significantly more than CAC, the seller is in good shape, otherwise, she has a reason to be concerned.

For a seller, the key question is as follows: How do we earn the loyalty of demanding, price-sensitive discount shoppers? How do we acquire and retain customers?

Here are my thoughts on this. If the product you are selling is a commodity meaning the product does not offer any opportunity to make it unique, price will always be the dominant decision factor for purchase. In such a case a seller is left with few other levers such as prompt delivery, bulk discounts, great ordering and after sale experience etc. If your merchandise has some uniqueness or you can ethically make it appear unique you have created an advantage.

But whatever product you sell, the one factor you can not ignore is Customer Engagement.

Why Higher Customer Engagement Leads to Higher Growth

Customer Engagement can be defined as the degree of involvement your customers have with your brand. It is built through various ways, channels including social platforms through which your customers interact with your brand. Every interaction is an opportunity for the brand to build engagement.

Why care about this? Because customers who feel a higher engagement with your brand:

Come back for repeat purchases hence have a higher LTV,
Spread the word and refer others to your brand hence lower CAC, and
Are easy to retain. All these three means profitable organic growth.

A recent Gallup survey revealed “customers who are fully engaged represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer.”

So far, we realise that the one factor that fuels growth in ecommerce is customer engagement. How do we build it, you may ask? Let’s address this question.

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You don’t have to sell everything to anybody and everybody. By using storytelling, and a meaningful narrative you can find your niche.

Here are Seven Ways to Improve Customer Engagement Hence Growth

Step 1: Build an engaged customer base

1. People buy, first your story then your product
Therefore, build an overarching narrative of your brand. This is where you make the promise. This should answer questions such as why care about your brand? Why buy from you? Why now? Be consistent with the story you tell the world. Remember consistency builds trust. And trust leads to engagement. Therefore, content is key.

2. Deliver what you promise consistently
None likes to be short-changed. When we get what we were promised we build trust. When we get a little more than we expected we become a fan. Be authentic, transparent & ethical about your processes right from design, sourcing, manufacturing, packaging and distribution. These days people do care about sustainability and ethics in business.

3. Leverage the power of design
Design the language of the brand not only the processes. Use the power of design in crafting great discovery, onboarding, ordering, payment, and grievance redressal for the user and/or customer. Design for delight not just delivery. For example, if you are selling house paint don’t just sell the paint, help the user throughout the customer journey from discovery, selection, price before ordering the product.

4. Embed higher empathy in customers relationships and after-sales services
Every interaction of a customer with your systems, processes and people is an opportunity to invest into customer engagement. Hence it makes sense to revisit all such opportunities from order confirmation, to return & refund policies, aftersales and grievance redressal system to reflect empathy and fairness. Empower the customer relationship management team with proper training, and instil ownership. When not sure about facts give the customer the benefit of doubt.

Step 2: Guard what you have built

5. Put in place a robust risk management process. This should include online reputation risk management.
Now, that you have built a decent reputation and an engaged customer base take all the measures to protect it. Like a garden requires careful and caring eyes of a gardener your tribe needs to be taken care of and nurtured. Monitor the voice of customers in reviews, social media mentions, besides internal measures such as customer satisfaction scores and returns, refunds and other retention metrics. Have an ORM tool in place so that your team gets alerts on wherever someone mentions your brand in social media or the internet in general.

Step 3: Nurture your tribe

6. Build/find a tribe around your brand
Ecommerce enables the longtail of retail. Therefore, it is about finding your tribe. You don’t have to sell everything to anybody and everybody. By using storytelling, and a meaningful narrative you can find your niche. Once they come to you give them a reason to keep buying from you beyond obvious product usage. It could be a social cause, sustainability, a hobby or a special interest group etc. Contrary to the conventional belief, the more specific the narrative the better.

7. Pamper your tribe on every opportunity
People might come to you because of your narrative but they would not stay unless you deliver what you promise in your narrative. Deliver not once or twice but every day, consistently, incessantly. This will further reinforce your original narrative and trigger a virtuous cycle. As a result, more people will flock to your brand.

Time to time you have to share some reward to your tribe not as a lure to keep them with you but as a genuine appreciation of the trust they have put into your brand. You may personalise some offers using opportunities such as birthdays, and anniversaries just to give you an example. Be creative in keeping in touch with your community meaningfully through emails and social media. Do not spam them with generic promotions rather share something they might care about. And before you know, buying from you and being in your tribe would become a statement of meaning for the Buyers.

Summary

Ecommerce has brought in enormous value for the SMBs over the years. However, driving growth with ecommerce requires a thorough understanding of the underlying factors. By looking closely, we find that Customer Engagement is the single most significant driver of growth in this context. We further explored seven more important dimensions that would help us build, guard and nurture an engaged customer base.

The post How E-commerce Helps Small Businesses Go Global appeared first on Dutch Uncles.

The Success of Hyperlocal Discovery with MagicPin

Suresh Chouksey — Mon, 18 Jan 2021 13:35:53 +0000

The advent of mapping technology with deep-reaching internet facilities has led to a revolution in the discovery of market places. Be it a small cafe, restaurant or a salon parlour, everything is discoverable as we start zooming in. It is a technology that can drive people home. The purpose that was served through hefty advertising is today done through innovative online services like MagicPin. A brainchild of Anshoo Sharma and Brij Bhushan, headquartered in Gurgaon, MagicPin is an offline discovery application.

What started in 2015, is now a product with more than 50 lakhs of the user base. From an outer perspective, offline discovery might appear to be a simple concept. Yet the entrepreneurial genius of Anshoo and Brij was in formalising something that is so conspicuously amiss in the market. Indian retail market in both the segment, online and offline is just short of the trillion mark. Comparison to International markets would still put it amongst the biggest. This market got its division into two, online and offline. While the ecommerce market kept booming, its growth earmarked an independent success. It did not factor in the subsequent growth of the offline market. Despite the fact that, offline market still contributed to about 90 percent of the total market. Nothing less than bewildering how the offline retail market did not get the attention of the technology enabler of its online counterpart.

Bridge the markets

This to Anshoo Sharma, who was a leading investor with Lightspeed India, was a gap that needed to be bridged. He along with Brij founded MagicPin in order to create a platform for hyperlocal discovery. This brings us to this unique term, ‘hyperlocal discovery’ that MagicPin utilised to its perfection. A hyperlocal platform would merge or bridge online and offline markets. The merging of these markets is done to help satisfy the needs of the local businesses. It basically asks the customer to search as per his or her need, a shop, service or service provider in their vicinity. It then gives back results that are localised as per the location. Since these platforms are all dependent on consumers to create data for them, it rewards them or incentivises finding new offline businesses. This way, local retailers can get identified online and can have a fixed customer base.

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Major success of MagicPin was in empowering small retailers or the partners with data that could solve their issues. Issues could be finding specific kinds of customers to target, feedback of quality or most importantly, excess inventory.

MagicPin smartly created its business model around this concept. However, it is their magical recipe behind the success of the hyperlocal discovery that they have garnered. They do not just collect the data of offline retailers. They apply smart algorithmic approaches to that data and also, use big data algorithms to analyse user behaviour. So, their data then becomes a gold mine for all the parties involved. MagicPin to start with, gets highly efficient filtered data of consumer behaviour, their purchase choices, their ratings of services and their likes, dislikes. This helps them target different categories of their users with need-based advertising. They can also offer rewards, discounts which are specialised per the demands of the user. MagicPin uses this data to map the locality better, hence improving their hyperlocal discovery with every new input.

For retailers, MagicPin is a boon. They are the ones on the discovery end. The better services, discounts and application experience MagicPin provides more their chance to get seen. Plus, they get to target customers with like-minded shopping attributes. Or they can always pitch in their ice-cream flavour to a customer who had a scoop, the other night. Since local brands do not get the loyalty customer base other than what they build locally through trust and quality, recurring customers are sparse. MagicPin follows its reward system, where a user can collect MagicPoints, whenever they visit a store and upload their receipts to get these points. Now these points can be only redeemed at MagicPin partner stores. Hence, these stores get recurring footfall. On top of that, every good experience is converted into a visually enriching story by MagicPin. This lets other users also get an idea of what kind of stores are doing well in terms of quality, pricing, hygiene and offers. Which finally comes down to, more discovery and better business. Finally, consumers are no lesser winners either here. They get coupons, rewards through MagicPoints which are redeemable at local shops, as mobile recharges or such other services. They also get to like, comment and interact with other application users. It is like a social media platform for the offline marketplace.

MagicPin is an exemplary model of self-sustenance, A template that is created to run like a mill. In an attempt to exploit the offline retail market, all the major entities of their model from a retailer, consumer to MagicPin itself are being benefited. Data which is gold in today’s valuation is coming to them for no cost. The data is simply verifiable and is much refined as the rating and review do not affect the MagicPoints a user will receive. For personalisation, they go every length possible. Even Wifi signals are used by MagicPin algorithms to quickly point the customer towards the nearest store.

Revenue Model

Merchants and brands use the MagicPin platform and its data to direct their offers to potential customers. These brands, merchants then pay two sets of payment to MagicPin. First, when there is a recurring customer in their store, they pay a recurring fee. Second, is a set commission every time a customer from MagicPin’s platform does some kind of a transaction with the merchant. Anshoo Sharma is often quoted saying that MagicPin is a merchant and brand-led data technology company. The commission that MagicPin charges from merchants per transaction range from 10-12%.

This is not the only way MagicPin earns revenue, they also host advertising on its platform. A lot of brands are regular advertisers on MagicPin and this helps these merchants and brands to reach out to their customers with an extra push.

As the business model is based on consumer data, the revenue model also tries to leverage it through marketing and advertising.

The interesting point here is that the business model from just the user end would appear to be dependent on the multinational merchants. While in reality, around 70% revenue is coming from small retailers. This makes the whole model even more sustainable as the future of the offline retailers remains very well tied with MagicPin’s support. Hence, the potential to exploit the small retail sector even when the partnerships with big chains drop down is huge.

Big leaders of the market

It is not that MagicPin was the first to think of hyperlocal discovery concept. There were early attempts to cash in on the same as well. The list can even go as far back as Foursquare. However, MagicPin’s door to door tie ups with retailers was unprecedented. Their model was the easiest to follow for local stores. These stores are often not run by people who understand complex technology. An easy application that just scans your location is all they wanted. Today, per the official website, the user base is a mega number of five million who have by now accumulated five million-plus experiences. In terms of merchants, it is also a leading figure with more than a lakh merchants already onboard.

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A trillion-dollar market, that the Indian retail market will soon be, a concept like the hyperlocal discovery of MagicPin is bound to succeed if executed well.

In terms of funding, their seeding was done in 2015, with a $3 Million. Today, it is in round D of funding with the latest money rolling in from Samsung Venture Investment Corporation (SVIC). Their expansion is rapidly being carried out to all major cities in India. They are already well established in 12 cities of India. The revenue per different reports is around $3 million. The growth has been 7x faster in one year and Anshoo Sharma expects companies Gross Merchandise Value (GMV) to reach $5 Billion. The business is not doing just well in terms of actual finances. Its digital presence gives it the real edge from its competitors.

Strong digital footprint

MagicPin’s significant digital foothold when it comes to application, website and social media gives a cogent argument for its upper hand on the competitors. In 2020, this is one thing that any kind of concept cannot fall short in. Not a single business idea can make its mark without the power of the digital world in respect to marketing, networking, logistics. MagicPin has taken care of all three with optima. Let’s start with the application. MagicPin app on the Google Play store has more than 5 million downloads. Such a huge number does not come without feedback, there are 75 thousand and more reviews of the application. The application has an average rating of 4 stars. The application, from the interface’s perspective, looks just like a social media platform. It is highly interactive, users can connect, share and like each other’s posts. The whole MagicPin unit is amalgamated in this user-friendly approach.

If this wasn’t enough, they have now gone a step ahead with the introduction of augmented reality in the application. MagicPin app calls its virtual sponsored objects as quests. ‘Quests’ are hidden Pizzas, Burgers, or items that a user can search in his or her surroundings using the phone camera. Once you find a quest successfully, you can simply redeem it from inside the store.

The competition that MagicPin faces cannot be discounted at all. There are many applications-based platforms that are trying to exploit offline discovery models. However, many factors play in the hands of MagicPin. Heavy network of retailers. A loyal user base that is more than 5 million in number. Media coverage of MagicPin’s activities. Their business model has kicked in efficiently. However, after some good rounds in recent years, MagicPin’s competition has swelled, there is Nearbuy, Gifts on Air and MyDala.

The nearest competitor in terms of offline discovery would be Nearbuy. Rest are following the coupon and voucher gifting route. Gifts on air has a tremendous plan that is working well against MagicPin and other competitors. They are exacting the full amount back to the consumer with a hundred percent gift voucher. Users are already starting to like the ‘no condition’ format of Gifts on Air. Such heavy discounting from local providers can bring some tough fights to MagicPin. In niche categories, like dining out, the company Dine-Out is doing better than MagicPin in terms of their partnerships and offerings.

Idea meant to succeed

The MagicPin’s success is not really magical in terms of its trajectory, Anshoo and Brij’s eye on the market did the Eagle’s work. This is what an entrepreneur needs to do. Search for something that is untapped. That is out in the open but still is not being executed well. Thousands of retailers were earlier being contacted by likes of Walmart and wholesale providers too. Some other platforms like MagicPin were also trying to bring the retailers onboard. All these efforts did not fruit in onboarding on a bigger scale. MagicPin tried to bring in technology and mix the ongoing fashion of social connectivity in the idea. They added a fun factor to discovery.

Next, the chain referral system is unique. In this, the MagicPin platform ensures that users on their discovery of a good local service provider do share about the service on the platform. It gives them the opportunity to be mouth publicised. Which for small retailers, merchants are unlikely. A good post will eventually get likes from other users and there comes a general sense of gratification with it. MagicPin made sure they are always more than a retail offline discovery application. They rather went with the idea of 360 utilization of a full-fledged app. This way, either from user data or from their backend data, the app would also show events, concerts, fests, interesting people within the locality. This proved to be a game changer in keeping MagicPin’s services in competitive mode with its direct rivals. More so, when its competitors are aiming for one or two services from the same MagicPin ala-carte of offerings.

Major success of MagicPin was in empowering small retailers or the partners with data that could solve their issues. Issues could be finding specific kinds of customers to target, feedback of quality or most importantly, excess inventory. When the retailers go off the peak hours, there is excess of stored items left with them. MagicPin with its command over the advertising and rewarding space can direct customers in that specific time. So, the retailers can easily clear inventory even when a normal market condition won’t facilitate it.

Lastly, when the vision of the nation is shifting more towards an inclusive India. A self-reliant nation’s idea could only be dreamt with its small retailers being a part of its growth. They need customers to recognise their services and not to only depend on the online market. So, a trillion-dollar market, that the Indian retail market will soon be, a concept like hyperlocal discovery of MagicPin is bound to succeed if executed well. However, such ideas need great leadership at the right time. MagicPin has always had it.

Anshoo Sharma and Brij Bhushan are the founders of MagicPin. Both are IIM graduates. Anshoo is an experienced professional in the field of business with his major responsibilities being consultancy and investment. He was a senior member of the Lightspeed’s (investment firm) India team. Brij is a long-time entrepreneur now from his days with Nexus, a venture capital firm, where he was the vice president. He has closely worked with several start-ups for a long time now.

MagicPin’s success is a throttling one. It shuttled from a simple hyperlocal discovery app to an application with lakhs of downloads and more than one lakh merchants on board. Their pace of growth is combined with smart decisions to improve app interface, to change the usage of their data to let merchants target even finer sample space for consumers. The way ahead for MagicPin is as per their founders, in connecting the retailers with the online world. That makes MagicPin the house of all retailers but this time with online discovery as well. Something like Amazon, though less sophisticated.

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