ShopClues to focus on non-transactional services
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New Delhi: ShopClues on Tuesday said it will focus on non-transactional services such as its paid product listings feature and business support services. It expects the share of services to reach 30% of its revenue from 10% currently in two years.
“Seller services currently contribute about 10% of our total revenues, and most of that revenue comes from our traffic monetization engine AdZone. I see this as a 30% business where about 20% will continue to come from traffic monetization and 10% all other services,” said Sanjay Sethi, co-founder and chief executive officer, ShopClues. AdZone enables merchants to bring up their product’s listing by paying a fee.
The e-commerce company launched a service called Reach that enables small merchants to accept payments without an app or a digital wallet.
Reach is a payment mechanism that provides buyers with a gateway over SMS (short messaging service) allowing them to transfers money directly to the merchant’s bank account.
ShopClues is offering the service to brick-and-mortar businesses in tier-II and tier-III cities for Rs99 a month and no transaction charge.
“We were piloting this for quite some time and had planned to launch it around March with the roll-out of GST (goods and services tax). We pulled up the launch because of demonetisation and we expect it to give a big push to Reach,” said Sethi.
The company already has 10,000 merchants using the service and expects to reach 100,000 in one year, he added.
In July, it acquired for an undisclosed sum mobile payments firm Momoe Technologies, which is behind this new feature. Momoe has tie ups with four banks to offer the payment gateway for transactions.
ShopClues claims that 60% of its sellers are in tier-II and tier-III cities and 40% have their own brick-and-mortar stores.
The move is a part of the company’s push to bring small and medium scale merchants online. Over the past several months ShopClues has strengthened its portfolio of services and is now taking them to merchants outside its platform, in a bid to open an alternative revenue stream and cajole them to eventually sell on the e-commerce website.
“Now the 10% by itself may not be exciting from a business point of view, what is exciting is that it is a very high bottomline impact because this doesn’t have a cost,” said Sethi.
ShopClues offers seller services like Business Guru and Sales Booster that help merchants understand and use data from the e-commerce website to improve their business, besides offering working capital loans to small businesses. It is also testing customizable website and app service for sellers.
The Gurgaon-based company claims it has over 500,000 merchants on its platform and expects to achieve $3 billion in annualized gross merchandise value by fiscal year 2018.