Vertical Integration Keeps Cost Lower for Quantified Commerce: Agam Berry | CORPORATE ETHOS

Vertical Integration Keeps Cost Lower for Quantified Commerce: Agam Berry

By: | July 3, 2018
ecommerce

Retailing business is facing pressure on account of rapid growth in e-commerce business worldwide. In 2017, retail giants such as Sears, JCPenney and Macy’s closed down over a 100 outlets. Shares of major apparels businesses hit all time lows and many filed for bankruptcy.

Shopping time, parking issues and hassle of wading through traffic in cities compel more people to shop online. With increasing internet penetration, smart phone use, digital payment options and aspirations of the middle class are all helping E-commerce business grow exponentially. E-Commerce doesn’t rely on traditional display advertising but builds brand identity on social media and search ads. For example, beauty brand Glossier was born as a blog and then thrived on Instagram.

Agam Berry

The success of e-commerce is attributed to the lower cost of operations compared to brick-and-mortar business, consumer demand, convenience for customers.  In a telephonic interview, Agam Berry, the Co-Founder of Quantified Commerce, explains the reasons behind the rapid growth of their business in India with Kajol Arora.

Excerpts

#Could  you assess the worldwide market for E-Commerce and where does India stand in relation to it? 

 Currently, the largest E-commerce market is China, with over 30% of its total retail sales spent online. The United States is in second place with around 80% of its population shopping online and an expected 480 billion spent this year, while these two markets are incredibly strong, India is emerging as the fastest growing market, with an expected spectacular growth of 1,200% by 2026. That is why investors are eager to jump on board this burgeoning market.

What is unique about Quantified Commerce business model?

Quantified Commerce has a vertically integrated model that offers more cost advantages than E-Commerce on its own. By being vertically integrated, Quantified Commerce cuts costs by owning multiple parts of the supply chain. E-commerce is cost advantageous by cutting out physical stores, but vertically integrated E-commerce saves even more money, and also works to cut costs for the consumer without sacrificing product quality. It’s a win-win situation.

#Could you elaborate on your Indian operations?

Quantified Commerce owns its own factories in India that confirm to  international GMP standards.  We make beauty and wellness products, as this is the fastest growing E-commerce sector in India .By owning its own factories, warehouses, call centers, shipping trucks, and by building its own brands through social media collaborations, we are able to invest  more on the actual product at a reduced cost to the customer. Without vertical integration, the cost of goods cannot exceed 8%, as 40% goes to the distributor and another 30% goes to advertising agencies. By owning the distributing and marketing, we can spend more on the actual product by selling direct to the consumer.