Are all the retailers in apparel industry connected by mainstream distribution system where Manufacturers supply to Distributors and then they supply to retailers? Perhaps No. There are other distribution formats like wholesale markets from where unconnected retailers get their inventory on periodic basis. One example of this system is the Mangaldas market which is located at Crawford market in South Mumbai. It is a heritage women cloth market in Mumbai where suppliers from Mumbai, Surat, Vadodara and other prime locations send their products. Since decades the mom and pop women apparel stores in Mumbai have bought dresses from Mangaldas market and sold to their customers at high rates thus earning good margins.
Why customers are not buying directly from Mangaldas
market? One of the reasons is information unavailability i.e. many people do not know such markets (obviously retailers do not want to kill their businesses by telling where they get the apparels from; remember these are unconnected retailers) and secondly the ones who know, they do not want 2-3 hours of tiresome travelling in Mumbai’s crowded local trains as this market is in one end of Mumbai. Apart from these two is the trade off which consumers do E.g. Do I want to waste my holiday and save 100-200 Rs or I want to enjoy my time with children taking them out for a movie or for a Go Cart. Certainly the balance inclines towards the latter. This was regarding the customers perspective, but the wholesalers had their own problem. With introduction of online fashion portals, traditional supply chain of apparel industry is in threat and huge brick and mortar fashion retailers are the worst affected. Wholesalers have become suppliers of online portals where they can sell in bulk at less margins, but still they require small scale retailers to mitigate risk. So can the two ends meet with a win-win!!!
In order to expand their reach, wholesalers have targeted homemakers to become small scale retailers who would like to earn margins by selling products to their friends and relatives. This reach is managed through the medium of WhatsApp.
It’s not about the tool, it’s about the problem it’s solving – Matt Heinz
Wholesalers have made WhatsApp groups of such homemakers and they send them pictures of latest collections along with prices. These new home businesses have made virtual stores on WhatsApp i.e. their own WhatsApp groups where they post again the photo collection adjusting their margin in the prices. They add their friends, relatives, kitty party gang and neighbors to the virtual store group where all the customers are updated with latest fashion. Whichever collections are ordered by the customers are collected from the wholesalers in bulk and delivered accordingly.
- New designs are received by the customers well in advance or sometimes even before the product has reached to the wholesaler. Without the digital marketing, fresh collections took more time to reach the retailer and then to customer.
- Credits given to retailers are minimized as now the apparel is collected only when customer orders it.
- Wholesalers use this channel to increase their customer base and also to sell the unsold products at discounted prices.
- This trend is also used by suppliers who send photos of latest collection to wholesalers so that they can pass on to retailers and gauge demand of the product.
- Customers trust their peers more who are selling them at lesser prices compared to other big retailers and even online portals.
This has emerged as a midway between brick and mortar retailers and online marketplaces. This same trend has also stepped into Imitation Jewelry business by the wholesalers of Zaveri Bazaar near Mangaldas market.
So why should this marketing and business model be only limited to developed cities and few product categories. This can also be extended to Tier 2, Tier 3 cities or rural villages for businesses even like kirana stores. Smartphones are possessed by almost everyone and WhatsApp is the common mobile application on every smartphone which can work fine even on a 2G connection. New products can reach end consumers at low costs further bolstering buying decision through community bonding and social gatherings. Maybe these are the initial stages how rural customers can one day be potential eCommerce customers and progress to advanced stages of online payment. No wonder one day Santoshi Provision Store (any rural store) or any Vijay Supermarket or any Ashok Kids Wear makes a WhatsApp group of all its customers and on a sunny afternoon posts its latest products, deals and prices of the day.
After all isn’t it Digital India?
PS: Would love to know from you all how WhatsApp can be used for creative marketing and other business models