Imagine you are out shopping and find a small local shop selling a hand-carved bamboo pitcher that catches your attention. It's beautiful, it's handmade, and you immediately imagine using it in your kitchen. Then, like many shoppers in our digital age, you decide to go online to check if you can get it for less.
As price-savvy consumers, it's normal to want the lowest price, and most e-commerce stores run on an "unbeatable price" business model. But in this instance, a quick search brings you to the same product, and what you see surprises you.
Bamboo pitcher comparison between Flipkart and Kalpataru Trading, a Chennai-based boutique owned by Bhavani K., who recently took her brick & mortar store online with Zoho.
The same product at the major e-commerce store is actually more expensive than what the local store is charging! So, on the one hand, you're probably happy the local store is cheaper so you can support them and still save money, but on the other hand, you probably wonder why. Isn't online shopping supposed to be cheaper than shopping at brick-and-mortar stores? After all, the cost of running a brick-and-mortar store is usually much greater than an online store.
Cases like these may seem commonplace and trivial, especially amidst the increasing dependence on e-commerce during the pandemic. However, the story here is ironically not about the consumer, but rather about the small and micro business owners.
Because of the lack of a digital presence, most micro and small businesses in India rely heavily on selling through large e-commerce platforms like Flipkart and Shopify because of the sheer volume of customers they draw.
However, these small businesses are often unaware of the losses they incur from the drastic price variation, monthly charges, referral fees, and other fees they have to pay based on which services they choose.
According to a recent Reuters report, select foreign e-commerce platforms like Amazon do actively undercut micro and small retailers in India. Fortunately, with technology, micro, and small businesses can now compete with online retail giants through affordable technology and better adoption support.
At Zoho, we're committed to supporting innovation and opportunity, which means we are also committed to helping small businesses to succeed both online and in our communities.
Debunking digital transition myths
If you're a small business owner, how many times have you reconsidered a tech upgrade, either fearing the high cost or thinking the digital method wouldn't work as well as your traditional process? If you have, don't blame yourself.
Until recently, these have been the prevailing notions among small businesses regarding tech. On one hand, many expect digital transformation to be expensive, complex, and too difficult to manage without extensive tech experience or a programming degree.
On the other hand, cost-effective solutions are often considered a temporary fix, something to tide you over until you invest into "big tech," which unfortunately illustrates the old saying, "you get what you pay for."
The perception that you will have to sacrifice quality—unless you come to the table with a lot of money—has prevailed until recently as the COVID-19 pandemic ushered in a rise in techno-optimism.
As these "high-cost fallacies" unravel, the shift to SaaS has given small business owners access to important technology at affordable costs.
The cost of professionalism
Small businesses often hesitate over a digital transition, assuming that even a straightforward cloud-based operating system might have hidden costs too. This is a valid notion, given that most small businesses in India are accustomed to both legacy systems and large e-commerce platforms known for periodic maintenance investments or increasing annual costs.
Fortunately, the benefits gained from transitioning to a SaaS e-commerce platform far outweigh these fears.
Let's look at a local example. Bhavani K, who runs Kalpataru Trading, shifted her boutique from a Chennai-based brick and mortar only to an online storefront in the midst of the COVID-19 pandemic with Zoho Commerce. She says, "One of the main elements of shifting online was the cost-effectiveness of the transition."
After this switch to online, Bhavani K. was also able to convert small orders into bulk orders and integrate Zoho Mail into her business communication, helping her reach a wider audience while retaining the authenticity of her small business.
Invoicing solutions made easy
For many small business owners, invoices serve as a vital record in their accounting process, often functioning as the sole documentation of the client's agreement to pay for the services or products received.
As digital transformation continues to accelerate, businesses in India are warming up to using technology to drive productivity and enable faster payments from customers and clients. Due in part to both the pandemic and the implementation of GST, these small business owners are becoming more open to GST-friendly SaaS tools and services.
Bhavani also uses Zoho Invoice to help streamline her billing solutions. "Before, I had to pay external accountants to file my GST bills," she says. "I had to constantly rely on them, but now I am in control."
Designing solutions for small business
Micro and small retailers transitioning from a brick and mortar business generally need basic digital tools that don't call for heavy customization.
For example, with its predesigned store templates, helped Bhavani leverage her existing knowledge and find maximum value in a sensible time frame—an important feature since most small business owners like her and their employees juggle multiple responsibilities.
"I know how to run a business," Bhavani says, "but I never thought I could design a website by myself.".
For small business owners, keeping costs to a minimum is another reason why a SaaS e-commerce platform makes better sense than an open-source platform.
Localized Service: adding value through social media and live chat
Small or micro business owners likely put in a lot more work than what the consumer sees. For example, Shalini J, who owns Nangai Home Made Food, recently shifted her catering business online with Zoho Commerce. Her small team makes a big effort to get to know their customers and offers them specialized services that bigger online catering brands can't, such as a promise to replace food if found unsatisfactory and using locally grown organic produce.
Zoho One's easy-to-develop ecosystem for businesses helps her maintain premium service by restricting their order radius to a specific zip code. This way, she says, "It allows us to focus on keeping quality paramount, personalizing customer service, and we can deliver with a smile".
"It really helps reduce the day-to-day suffering that small retail business owners like me face," she says.
For most small business owners, supply chain development is now a central part of digital transformation and this implies that inventory appears in several forms of their supply chain.
After integrating Zoho Inventory, Shalini was able to manage her orders while simultaneously tracking her inventory, allowing her to communicate honestly with customers about their stock and availability.
"It made life easier for my store-keeper because now we knew exactly what we needed more of," she says.
Digitalization: the way forward for small businesses
At Zoho, we know it can be hard for small business owners to balance their local specialization and traditional methods with the need to compete with multinational e-commerce sites and transition to more efficient systems. Local businesses contribute greatly to our communities but are often overlooked by consumers and driven out by major chains.
Therefore, it is important to us to make sure we do everything we can for small business owners like Bhavani and Shalini to build an online presence that's cost-effective, intuitive to manage and doesn't require coding skills to deliver exceptional customer service. We're committed to helping small businesses like Kalpataru Trading and Nangai Home Made Food improve their digital systems while creating business value and driving sustainable growth.
Do you know a local business that has gone online?
Please feel free to share them in the comments section below. We will feature your suggestions in our upcoming blogs.