A blueprint for conquering a fragment localised market 

Take any sample market .

Any one . Where there are a lot of players but each catering to a local maxima ( in a specific locality ) with varying gross profits and operating as warlords in their own scale.

Comes to mind : grocery shops, barber shops , gyms , service providers of telecom and cable and in some non govt. regulated markets – the utility or the power business.

If you identify such a market , it is ripe for consolidation . Don’t go about creating a marketplace where there is a scope for standardisation. Because standardisation and consolidation yikes a better control over the ultimate downstream demand than a market place would.

Let me illustrate : flipkart started out as a consolidator And leveraged the consolidators brand to create a market place.

Airbnb started out right off the gate with a market place model . It worked.

Amazon started out as the consolidator while later becoming a market place ( ofcourse flipkart emulated this ) while Alibaba went the airbnb or the eBay way .

I believe it is easier to confuse which strategy is the optimum one to go forward with , when faced with a fragmented market . To consolidate or to enable a market place which drives the marginal cost downward ?

A simple rule of thumb : if the accompanying infrastructure already exists and works seamlessly (finance,logistics, payments, etc ) , do the market place . Else the market place won’t work .

Infrastructure here maybe : Internet penetration , transportation infra , Financing capability, Payment or credit card penetration.
This requires creating the infra and then spinning or selling it out once the infra and the eco system develops. Hence the consolidator does everything , slowly spinning out the infra and in the end becoming a market place.

Advertisements

About V

I build things. Things aimed at changing the way we interact and live in this world. Currently building "SolarTown".
This entry was posted in Uncategorized and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s