Introduction
Founded in the year 2005, Etsy has been a platform for creators worldwide to sell unique, handmade products to buyers globally. This online marketplace has over the years been a trusted platform for small sellers to attract customers from all over the world. With a community of 5.9 million active sellers and 89.9 million buyers worldwide, Etsy is a success in many countries around the globe.
Etsy first made its debut in the Indian market in the year 2018 and was expected to replicate its global success here too. However, Etsy has ever since its Indian debut been struggling to create a foothold in the Indian market.
Let us understand the reasons behind the failure of Etsy in India.
Etsy’s Challenges in India
1. Competition:
India with its huge population is an attractive market for sellers globally. Businesses both local and global have a strong presence in India and drive up the competition. E-commerce is no exception to this competition. Etsy entered the Indian market in 2018 and had to compete with both global and local platforms like Flipkart, Amazon, and Myntra which had already created a market for themselves.
2. Cultural differences:
The tastes and preferences of customers vary greatly depending on their culture and geographical location. Etsy’s strong Western influence was apparent in its products and was unsuccessful in attracting Indian consumers. Etsy’s uniquely curated products though attractive to a small segment of the Indian market failed to appeal to a majority of the Indian population which focused more on the price of the products rather than their uniqueness. Etsy failed to account for the needs and preferences of the middle-class Indian society that made up the majority of the consumer base for the products listed on Etsy.
3. Localization:
Etsy has been unable to strike a chord with Indian buyers because they have failed to provide customization based on the preferences and cultural sentiments of Indian buyers. Negligible brand awareness campaigns by Etsy made it difficult for Etsy to create a connection with Indian customers.
Further, Etsy’s latest localization algorithms have made it difficult for sellers to sell their products in various regions. Indian sellers looking to tap the international market have seen a decline in their sales due to the localization policy of Etsy which gives preference to local sellers. This fall in customer base has been a source of dissatisfaction and worry for Indian sellers especially small Indian sellers who depended on their international customer base for earning profits.
4. Logistics:
One of the major requirements for selling products on Etsy is reliable and on-time delivery of products. Since the Indian market I spread over a vast geographical area logistics becomes a challenge. Inefficient and unreliable delivery partners hurt the delivery services and made it difficult to attract and retain customers. Logistics became a major concern for Etsy sellers in international transactions as well because the Indian export laws and customs duties not only caused a delay in the delivery of goods but also made shipping costs high.
5. Integration:
Etsy has failed to gain a following in India due to the lack of integration with the Indian audience. The reason for the ever-increasing demand for e-commerce is the convenience and ease it offers to its sellers and buyers. E-commerce platforms are an easy way to bring customers and sellers from all over the world together making domestic and international sales convenient. However, Etsy failed in this aspect. Etsy’s failure to accept payments in INR has made it difficult for Indian buyers and sellers to use Etsy. The complicated payment method for Indians turned out to be a big turn-off for Indian users.
6. Cost:
Indian sellers have been exiting Etsy because of the increasing platform fees being charged by the platform. The small and medium businesses listed on Etsy are choosing to drop out because they believe that the platform is already taking a substantial cut from the profits of the listed businesses and the increasing platform fees make it harder for businesses to make profits.
Further, Etsy has been unable to penetrate the Indian market, and the advertising costs and other sales-related costs are not earning the desired returns in sales.
What Etsy Could Have Done Differently
Etsy though popular in the West has failed to create a marketing niche in India. This failed opportunity could have been avoided by:
1. Market research:
Through market research is essential before entering a new market. India with its enormous population could have been a thriving market for Etsy if only it had made comprehensive market research a priority.
A detailed research into consumer taste and preferences, cultural behavior, and purchasing habits could have helped Etsy create marketing strategies that appealed to the Indian customer.
For instance, understanding the financial demographics of India would have been helpful to Etsy in offering more affordable products to Indian customers.
2. Partnerships:
India is a vast market with numerous players vying for the attention of consumers. In this super competitive environment, it is important to create strategic partnerships to gain customers. Etsy could have had greater success in the Indian market by creating a network of artisans and logistic partners. This could have helped Etsy take advantage of the existing marketing networks and improve its sales services.
3. Community engagement:
To create awareness and brand recognition Etsy could have undertaken community engagement activities like social media marketing campaigns, workshops, discussions, contests, etc. to allow buyers and sellers to connect and share their experiences. Open communication could have helped Etsy modify its strategies to meet user expectations and create brand loyalty.
4. Ease of use:
To attract more users Etsy should have worked on integrating Indian currency into the platform. Accepting payments in INR could have helped Etsy attract and retain more customers. Making it easy to transact on the platform could have been a driving factor in increasing sales.
Conclusion
Having examined Etsy’s Indian journey over the last 7 years it is evident that though there are multiple modifications required in Etsy’s approach to India there is hope yet for this e-commerce platform. By understanding the needs of the Indian market and taking corrective actions to create a marketing strategy suited to its unique needs it is not too late for Etsy to make its presence felt in the Indian landscape.
