This looks like an interesting D2C play. Thanks to @Chins and the other collaborators for bringing this idea into the forum. Hope to add some more inputs around the online channel of the business along with a few questions to raise in concall to get a deeper understanding of the business.
While I don’t have the split of marketplaces vs D2C website from sales perspective for Newjaisa, I do believe the company needs to continue working with both the major marketplaces and ramping up their own D2C channel for the following reasons.
Category creation
Category creation of refurbished laptops/desktops needs to happen on the back of marketplace ad spends and visibility on marketplaces towards customer education, as they will have more of a financial and online distribution muscle to create this category rather than it happening entirely through Newjaisa or similar sized competition’s P&L. Below one can see the difference in ratio of monthly search volume for relevant search query between Amazon and Flipkart, where Amazon is ahead of the curve with respect to this category creation on their platform. One positive is the comments around Flipkart in the last concall where something in this space is to be expected.
| Search Query | Monthly Search Volume - Amazon | Monthly Search Volume - Flipkart |
|---|---|---|
| laptop | 11,500,000 | 8,800,000 |
| refurbished laptop | 1,000,000 | 71,200 |
| Refurbished to New ratio | 9% | 1% |
Issues with Marketplace Model
A shortfall with respect to how sales happens on ecom marketplaces is around how buybox between sellers works for any product. Take the case of the top selling SKU on Amazon for the category - Amazon Link.
For a product with 500+ units sold and best seller rank #1, the product has exceedingly poor ratings and reviews. This is primarily due to multiple sellers including Newjaisa allowed to sell on the same ASIN without being able to showcase any differentiation except price. And there well could be cases of few fraudulent or poor QC sellers selling inferior products and lowering the overall ratings and reviews on the product and bringing down overall conversion rates for the SKU and category overall given how skewed the hero products are to overall category. Unlike the case of new laptops where the quality between all sellers is the same, unlikely for that to be the case here where there could be large variance in quality of refurbished laptops and this could be a question to raise in upcoming concalls on how they intend to solve this issue on the marketplace with the respective marketplace category teams.
Own D2C Channel
The metrics on their own D2C channel show that their traffic has been spiking over the past few months due to festive period without too much of a delta in reliance on paid traffic. Over a base of July, the traffic on the website for September has spiked by 2.5x. More interestingly, the traffic acquisition mix is below and interesting to note that the above traffic spike is happening without blowing up the CAC.
| Traffic | July | September |
|---|---|---|
| Direct Website | 40% | 46% |
| Organic Search | 20% | 12% |
| Paid Search | 31% | 35% |
| Others | 9% | 7% |
Interestingly, comparison of generic vs branded monthly search volume on google shows that, branded keywords like newjaisa, newjaisa laptop, etc. when compared with generic keywords like refurbished laptop, refurbished laptops, etc is 7% of overall google monthly search volume which indicates some amount of take off in category creation done by newjaisa.
Marketing Activities
This is a high leverage tool, especially considering where they are in their journey for their category. Some questions have also been raised in previous concalls regarding this. But going by their current traffic mix on social and search, and considering the current set of campaigns running from the pov of the ad property used, quality of video creative, CTAs and RTBs, etc. merits understanding more from the management in upcoming concalls how do they look at the roadmap ahead for moving up the quality and execution curve when it comes to marketing, either internally or through an external agency, since this again ties in to category creation especially when done on meta and can have a big multiplier effect.
Disc: Invested. Transactions in last 30 days. Data sources are from marketplace tools, SimilarWeb, Helium10, Meta Library etc.
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