“Zoho has always kept a series of products up its sleeve to be able to reinvent itself and not fall out of the race,” Zoho’s Sridhar Vembu had once said. The Chennai-based SaaS unicorn founder unrolled yet another layer of this proverbial sleeve to enter the cloud applications market for ecommerce with Zoho Commerce.
Vembu has followed that strategy now for more than 20 years, launching more than 50 products under Zoho’s catalogue and on-boarding 45 Mn users globally.
Zoho Commerce is an end-to-end SaaS ecommerce solution for small and medium businesses aiming to build their brand online. Positioned as a low code platform, Zoho claims to enable retailers set up an online store in just a few hours, using a familiar drag-and-drop website builder, and configuring payment and shipping details.
Zoho is also throwing in its AI-based assistant Zia, which would give customers product recommendations based on their purchasing patterns, one click GST compliance and tax-filing assistance.
With this move, the company is looking to tap the burgeoning opportunity in ecommerce due to the ongoing digital transformation in the country. According to a December 2018 report by IBEF, India’s total internet user base is expected to rise to 829 Mn by 2021 from 560.01 Mn as of September 2018. Also, revenue from ecommerce in India is expected to jump from $39 Bn in 2017 to $120 Bn in 2020, growing at an annual rate of 51%.
Besides India, Zoho has launched its SaaS ecommerce application in international markets including the US, UK, Australia and the Middle East. It announced a user base of 3000 for Zoho Commerce, of which 10% are from India.
“We have customers using different Zoho products at the back end. But the missing piece here was the storefront. Zoho Commerce aims to fill this gap for our existing and new consumers,” Hyther Nizam, Vice President – Product Management at Zoho shared with Inc42.
Despite many firsts, Zoho is admittedly quite a late entry in the Indian SaaS ecommerce segment. With the popularity of ecommerce marketplaces Flipkart and Amazon as well as the increased base of online shoppers (expected to reach 273.6 Mn in 2019), a number of players already cater to a large chunk of SMBs in the Indian market.
Key homegrown players here include Zepo, Martjack, Kartrocket, Shopify, BuildaBazaar (by Infibeam), SellMojo and StoreHippo among others. Shopify, the global leader in this space, has an 8% global market share in SaaS ecommerce, so it’s a long-tail market
However, Nizam believes there is a big opportunity in India for an established player like Zoho, especially because the value is scattered in the entire online selling spectrum in the country, and the existing players are really weak in terms of an end-to-end offering. In contrast , Zoho can leverage its array of products to bridge this gap, such as its existing base of ecommerce customers already using its accounting, CRM, email marketing tools, among others.
Saahil Goel, CEO and cofounder at ecommerce logistics and shipping software solution ShipRocket shares Nizam’s belief. He says that with an existing large customer base that’s already using other products from Zoho’s suite, the strategy is most likely focused on average revenue per user (ARPU) expansion from the current user base.