Using E-Commerce to Empower SMEsWed, 02/21/2018 - 15:07
Bricks, mortar… setting up a business in an offline economy entails significant investment costs. For SMEs, going online means traditional fixed costs disappear and operations can begin with a minimum investment, says Claudio del Conde, CEO and Co-Founder of Kichink, an online marketplace whose goal is to provide commercial opportunities in the online economy.
“Our purpose is to empower SMEs by helping them set up and scale up direct sales channels to reach final consumers,” says Del Conde. Kichink’s platform allows users to set up an online store in only two and a half hours and to scale it up using a model specially designed for SMEs. “We manage the technology surrounding the online store. Clients can set it up on Kichink’s platform, Facebook and their websites and it can be customized to their exact specifications,” says Del Conde.
While it is true the internet has permitted the appearance of several marketplaces, Del Conde says Kichink’s model differs from its competitors in two main ways: its mission to empower SMEs and its focus on ensuring an impeccable user experience. “We do not compete with marketplaces such as Lineo or Amazon. In its model, brand and product positioning depends entirely on them,” he says. “Kichink is an enabler that allows SMEs to have a direct channel to consumers.”
According to Del Conde, less than 10 percent of SMEs participate in the online economy. “It is an economy dominated by large corporations,” he says, adding that Kichink’s model would not work if it did not provide an adequate user experience. “Kichink accepts payment through credit and debit cards as well as in cash. We also set up the entire system to avoid fraud and perform our own payment analysis.”
Even though the company is an online platform that enables e-commerce, Del Conde explains that around 50 percent of payments are made in cash, which is a symptom of a bigger problem: the lack of banking access in the country.
Product delivery is equally important. Kichink has developed a relationship with almost every logistics company to ensure that stores on the site have access to the lowest possible shipping costs. “We manage the order and we track it every step of the way. Of our orders, 98.5 percent are delivered on time,” he says. Kichink also provides picking, packing and delivery services for stores with larger transactions.
The platform also offers a marketing consultancy component. “We help SMEs generate marketing concepts, best practices on how to use social media and we offer to handle the purchase of digital media,” says Del Conde, for whom Kichink’s success is rooted in the added value the platform provides for SMEs. “The easy formula for a technology startup is to focus on the software development, lease it and collect the money, regardless of whether the SMEs sell or deliver on time. These kinds of solutions address a market that has enough sophistication. We wanted to provide SMEs with a tool that would allow them to grow.”
Among the several challenges particular to Mexico, access to banking and internet services ranks high. “Banking institutions have no tools to verify certain data. This makes them less willing to take on some risks.” internet access is a different hurdle. “Though the number of smartphones grows every year, payment for data does not. This means that Mexicans access only free internet content, basically Facebook and Twitter,” Del Conde says.
Another stumbling block resides in the offline world: postal delivery. “People in the US are used to getting things in the mail every day. In Mexico, we have never had this culture. In the US, around 70 percent of e-commerce sales are of a physical product. In Mexico, services make up the bulk of sales – less than 30 percent are of physical products.” One of Kichink’s goal is to reverse this trend. “We offer services such as classes, seminars and tickets for events but physical products make up 90 percent of what the platform offers.”
Del Conde is confident that it is only a matter of time before e-commerce completely takes off. “E-commerce can reach market niches that retail cannot.”