The Business Model of Major Product Discovery and Price Comparison Sites in India
Introduction
A decade ago, the online shopping landscape in India was vastly different. Products were scattered across numerous websites, making it a challenge for consumers to find and compare prices. However, with the rapid growth of e-commerce, several innovative platforms have emerged to simplify the shopping process. In this article, we will explore the business models of these major product discovery and price comparison sites in India, their revenue sources, and the key factors that set them apart.
Overview of Affiliates and Price Comparison Sites
Back in the early days, there were barely any affiliate models or dedicated price comparison sites. Over the past five years, the landscape has drastically transformed with the rise of giants like PriceBaba, MySmartPrice, and Junglee (now part of Amazon). These platforms play a crucial role in enhancing the shopping experience for consumers.
Importance of Price Comparison Sites
Price comparison sites act as a single hub where shoppers can explore various products across different online stores without the hassle of visiting each one individually. This convenience has made these platforms highly popular and essential for online shoppers. As a result, they have become vital components of the e-commerce ecosystem, offering value by providing a seamless and efficient shopping experience.
Revenue Sources for Price Comparison Sites
The primary revenue source for these platforms is through affiliate commissions. Here's how it works:
Affiliate Commissions
When a user discovers a product on these sites and completes a purchase through a link provided on the platform, the site earns a commission. The commission percentage varies, typically ranging from 1% to 10% of the transaction amount. For high-value orders, the commission might be even higher, sometimes reaching up to 20% of the transaction value.
Minimum Order Payments
Some platforms also offer a fixed payment method, providing an affiliate with a minimum amount irrespective of the order value. This amount can be as high as ?150 (Indian Rupees) for each successful transaction. This ensures that affiliates can still earn even if the order value is relatively low.
Standing Out in a Competitive Market
Affiliate commissions and minimum order payments are important, but these platforms also need to stand out in a crowded market. Here are some key factors that differentiate them:
Consumer Appeal
Consumers often choose one of these price comparison sites based on the features and style that appeal to them. For instance, if a shopper is interested in specific product features and price comparisons, they might choose platforms like MySmartPrice. On the other hand, if a user primarily needs product discovery, Junglee might be more suitable.
Advanced Search Capabilities
Very few price comparison sites can provide exact product matches with detailed attributes such as size and fit. For example, a platform that can accurately find men's size 32 Levi's Slim Fit Jeans among various online stores would offer a unique advantage. This capability to match specific product attributes is a significant opportunity for improvement.
Notification Features
Another valuable feature that could make these sites even more appealing is the ability to notify users of price drops, discount alerts, and deals. Integrating such notification features would not only keep customers informed but also drive repeat visits and conversions.
Conclusion
The business of major product discovery and price comparison sites in India is primarily driven by affiliate commissions and minimum order payments. However, to remain competitive and valued by consumers, these platforms must continuously innovate and improve. By focusing on consumer appeal, advanced search capabilities, and notification features, they can differentiate themselves and become indispensable tools for online shoppers.