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Wooplr’s Lean Social Marketplace: Business Challenges

CASELET, MARKETING MANAGEMENT
ET Cases, 5 Pages
AUTHOR(S) : Syed Abdul Samad and Dr. Nagendra V. Chowdary

Case Preview

Wooplr’s Lean Social Marketplace: Business Challenges

In June 2018, Wooplr Technologies Private Limited (Wooplr) disrupted India’s e-commerce space by pioneering the social-commerce revolution. With a vision to create the first social-commerce unicorn business in India, the Bengaluru-based start-up brought social-sellers, consumers and fashion brands together on its platform.

Wooplr was established in March 2012 – by Arjun Zacharia (CEO), Ankit Sabharwal (CTO), Praveen Rajaretnam and Soumen Sarkar – as a fashion content website. Later, it morphed into an Instagram-like platform for women’s fashion (curating products from physical and online stores) and by 2018, it became India’s first notable and thriving social-commerce network.

Business Model

Wooplr encouraged people to setup their own store on its website at zero investment to sell apparel, accessories, etc., driven through their social network (with 100 or more followers). Individuals could create a store and add products (from 50,000 products of 300 brands featured on Wooplr) to their store. They could then share product details through their social network and influence people to purchase it..............

Building an “Influencer” Platform

As people are more likely to buy when their friends recommend a product, Wooplr built a community of social-sellers and supported them with end-to-end e-commerce support – including brands/products, technology and payment platform, delivery/returns and customer care. In short, Wooplr crowdsourced demand through influencers, supply from marketplaces, and fulfilment through third parties, and built a ‘lean social marketplace.’.............

Disruption

Wooplr was primarily dependent on its seller network for marketing and sales, thus incurring near-zero expenditure on its marketing and customer acquisition. Marketplaces work on a traditional cost-per-sale model. Arjun claimed that while 93% of Myntra’s sales come from just 7% of brands, at Wooplr, 40% of sales come from 60% of brands.............

Business Challenges

Wooplr has 200,000 monthly active users on its platform, of which only 7% actively post. To increase sales, the primary challenge for Arjun lies in increasing their active user base (especially influencers), as 200,000 in a population of 1.3 billion is a minute share.............

However, in April 2019, Wooplr was struggling to find investors and due to lack of capital had paused its operations since mid-April. A source from the company said, “Wooplr’s biggest cost at present is the technology backend and logistics. So, it continues to spend extensively on its technology backend integrated with Google and logistics partner Delhivery................

Assignment Questions

I. What is Social Commerce? Debate on its advantages or disadvantages over traditional e-commerce. Discuss Wooplr’s Business model.
II. ..............

Exhibits

Exhibit I: Wooplr’s Business Model

Exhibit II: Wooplr and Competitors (2017-18)

Teaching Note Preview

Wooplr’s Lean Social Marketplace: Business Challenges

Synopsis

Started as a fashion discovery and content start-up, Wooplr morphed into a social commerce enterprise with an eye on women’s fashion. Unlike the big horizontal e-commerce players – where customers directly come and purchase – Wooplr’s revenues are solely dependent on its network of social-sellers registered on its platform and the sales carried out through their social network. While the company had recently broke even, the low numbers of active users, the trickling revenues and fierce competition from horizontal and vertical players in the industry, pose a serious threat to its vision of becoming India’s first social commerce unicorn. This teaching note tries to explain how the social commerce business model is different from the e-commerce model and also attempts to bring out a debate on whether the founders should pivot to a new business model or keep building on the identified sweet spot and how?

Prerequisite Conceptual Understanding/Before the Classroom Discussion

The students/participants should have a conceptual understanding of Social Media and their role as marketing and sales tool for companies. Of late companies have been using Social Media platforms to engage with their customers and also doing business. They can read the chapter/material related to ‘Online Advertising, Social Media Marketing, and Planning Integrated Digital Marketing Campaigns’ from the curriculum taught in the Digital Marketing program. The following papers throw light on the nuances of social commerce:

• Zhong Yao, “Social Commerce: A New Electronic Commerce”, https://pdfs.semanticscholar.org/3cfc/d6fb88fffc56aa3a897812853d94cbab9512.pdf (Accessed Date: January 20th2019)

• Matt Anderson, et al., “Turning ‘Like’ to ‘Buy’ Social Media Emerges as a Commerce Channel”,https://www.slideshare.net/Briancrotty/booz-co-turning-like-to-buy?from_action=save, 2011 (Accessed Date: January 20th2019)

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Preamble to the Case Analysis and Suggested Classroom Orchestration

The first segment of case analysis helps the participants in getting to know what social commerce is and how different it is from the traditional e-commerce. It also explains the advantages or disadvantages of social commerce over the traditional e-commerce. The next segment analyses the competitive e-commerce scenario in the country and derives the likely threats and challenges that Wooplr might face on its journey to achieve its vision. It further enables the participants to debate and suggest on ways that Wooplr can implement to gain traction and increase its active user base to achieve its vision. The case analysis was carried out as presented in Exhibit (TN)-I............

Exhibits

Exhibit (TN)-I: Suggested Classroom Orchestration

Exhibit (TN)-II: Wooplr’s Business Model

Exhibit (TN)-III: E-commerce Industry in India

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Abstract

How can a small fashion vertical player survive amidst highly-funded, fiercely competitive and big players? Should it pivot to a new business model or should the founders keep building on the sweet spot originally identified? These are some of the questions plaguing India's first social commerce marketplace's co-founders Arjun Zacharia and Ankit Sabharwal, as of September 2018. Started as a fashion discovery and content start-up, Wooplr morphed into a social commerce enterprise with an eye on women's fashion. Unlike the big horizontal e-commerce players - where customers directly come and purchase - Wooplr's revenues are solely dependent on its network of social-sellers registered on its platform and the sales carried out through their social network. While the company had broke even in 2018, the low numbers of active users, the trickling revenues and fierce competition from horizontal and vertical players in the industry, had resulted in stalling of its operations temporarily in April 2019, posing a serious threat to its vision of becoming India’s first social commerce unicorn.

Pedagogical Objectives

  • To understand the business model of a social commerce enterprise and debate on its advantages over traditional e-commerce model
  • To understand the business challenges of Wooplr and suggest how it can increase its monthly active user base and thereby its sales or whether to pivot to a new business model

Case Positioning and Setting

This case can be used in the MBA/MDP for either of the following:

  • Marketing Course – Business Model: To understand the business model of a social commerce enterprise
  • Strategy Course – Competitive Strategy: To analyse Wooplr’s strategies and debate whether it stands a chance in the fiercely competitive Indian e-commerce market


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- Abstract
- Caselet
- Teaching Note (**ONLY for Academicians)
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