About SkyShop
SkyShop, which started operations in 2007 by selling books, is today the largest e-commerce
player in India — with approximately 200 million subscribers operating across 80+ major
categories. With the internet base expanding in India, SkyShop is eyeing this opportunity to
come up with many new initiatives to ensure top-of-the-mind brand recall for online shoppers.
Customer First is one of the core values at SkyShop since inception and here are some of the
initiatives that the company has experimented with to increase customer engagement and
mindshare:
Internet in India :
By most estimates, 57% of the world population is now on the Internet and on an average spend
close to 6 and a half hours online every day. Closer home, 560 Mn Indians are on the internet
with approximately 250 million users in Urban areas (Metro till Tier3 and below).
90% of Indian internet users access the internet on their mobiles and spend 7.5 hours on an
average per day online. It is not an exaggeration to say that internet penetration in India is set to
explode in the next 2 years with multiple projections pegging this number close to 750 Mn users
by 2023. This growth in new users will change the internet landscape dramatically.
Already, trends are emerging which suggest that most new internet users are going to move
towards consuming entertainment, doing financial transactions and shopping online much
quicker than their predecessors with cheap data, better network speed and connectivity fueling
this rapid adoption.
Important facts :
● E-commerce constitutes less than 10% of overall retail in India and while so far being
largely an urban phenomenon, it is growing rapidly in tier 3 and below every year.
● Less than 50% of Internet users shop online or do financial transactions, most of them
confine themselves to just messaging, social media or entertainment.
● Entertainment is fast catching up on social media to emerge as the primary category for
internet usage behind messaging in both Urban and Rural India.
● More than 50% new internet users are likely to shop online within the first year, up from
less than 30% earlier.
SkyShop at a crossroads:
There is massive headroom for growth in each of these categories with the explosion in new
users, be it Shopping, entertainment, payments etc Does this mean that the winner in such a
landscape will be the one who is a one stop destination for all of them or solves one/few of them
deeply?
Looking at ecommerce specifically, the next step in scale will come from deeper penetration of
the category on both its ‘supply side’ and ‘demand side’. On the supply side, this may mean
solving for easy and scalable onboarding of sellers who are today exclusively offline and get the
‘bazaars’ of India online as well as expanding the supply chain network and fulfillment centers to
reach these new users. This could potentially mean SkyShop building new capabilities or
forging partnerships to strengthen the foundation for eCommerce 2.0
On the demand side, getting these new users to start shopping may require players to not just
be a shopping destination, they need to cater to their other needs like entertainment, financial
services and hence may require SkyShop to pivot away from just being a shopping destination.
Globally, internet companies have taken different routes to this end. In China, the progression
towards “Super apps” has ensured that customers can find everything they need on a single
app. Customers use apps like WeChat, Meituan Dianping etc for a wide range of activities like
entertainment, flight/hotel bookings, messaging, news, financials services like loans and
investments etc These apps either fully own these different verticals or partner with different
players, like JD.com in Wechat’s case (e-commerce on a messaging app), to provide the
required offering. Another example is, WeChat Pay being offered as part of an ‘ecosystem’ of
offerings to other apps, like PinDuoDuo who integrate it fully in their experience and thus can
tap into WeChat’s existing user base to acquire new customers while WeChat gets the benefit of
increased transactions outside the WeChat app. These “ecosystem” or “hybrid” routes which
the Chinese internet companies have taken has resulted in an accelerated customer base &
revenue growth.
In the US, this has played out differently. The big internet companies offer different apps for
different needs but either “fully own” or “control” a part of these apps. For example, Google
lets you book flights(google flights), watch videos (Youtube), do video calling (Duo) via different
apps but owns them completely. Consumers still need to download these apps individually and
have a distinct experience on each of them. Same is the case with Facebook, Instagram and
Whatsapp, three distinct apps catering to almost 3 different needs under the overarching
umbrella of allowing people to connect socially.
But there are winds of change in the US. Uber has started food delivery branching out of their
existing ride hailing offering, AirBnB is venturing into ‘experiences’ beyond just
accommodations, Instagram is trying to integrate “shopping” by working closely with brands and
influencers and Apple is venturing into ‘content’ and ‘credit’ but what is common amongst all of
these examples is that they have chosen to completely control the experience and hence deliver
greater customer satisfaction and thus better retention of users.
To put it succinctly, while China has taken the “ecosystem” route with big internet apps choosing
to host different partners or opening their own services to be used by other partners to unlock
scale for all the players in the ecosystem, US has taken the “Fully controlled” route with each
App solving for one consumer need completely and fully control the customer experience before
moving on to something else. SkyShop today is at this crucial juncture. An internet pioneer in
India looking to chart out its growth strategy in a rapidly changing consumer landscape.
The questions confronting you today, for the purpose of this case study :
● Looking at Global case studies, if you had to suggest to us, which route would you
recommend: The ‘ecosystem’ route or the ‘fully owned’ or a hybrid of the two.
● How will the chosen route translate on the demand side? What should SkyShop “be” for
the customers? Should they see SkyShop as a destination for everything they need or
should there be different apps within the SkyShop umbrella for their different needs?
● Based on the answer to the first question, what should SkyShop do on the “supply” side?
Does it mean venturing into new verticals like OTT, travel tickets/bookings, financial
services via partners or fully owned? What does it mean in the supply chain side, should
we work with 3rd parties like Delhivery to scale reach and fulfilment centers or fully own
the network to provide the best experience to e-commerce customers? Should we scale
the seller base by developing easy onboarding to offer ‘local’, ‘regional’ and widest range
of products to our customers or continue to scale steadily while continuing to strongly
guardrail quality?
Key Deliverables
● Recommend the right strategy for SkyShop. Bring in the relevant Indian context in your
recommendation. You may use current internet trends in India, global evolution of
internet and primary research to substantiate your view
● Demand side : How does your chosen strategy translate on the demand side? Provide
3-4 key areas where and how this strategy will be deployed and provide a timeline view
of implementation and key customer metrics that it will move : Daily active users,
Monthly active customers, Repeats etc
● Supply side : Provide 3-4 key areas where and how the chosen strategy will be
deployed. Provide a timeline view of implementation with key supply side metrics it will
move : Number of active sellers/partners, Number of listings/products/hours of content
etc