As e-commerce market in India continues to grow (from $12.6 in 2013 to and aims to cross touch $20 billion by the end of 2015), its offshoot – subscription commerce is getting ready to roll a more business-savvy show. A wide range of niches, including fashion, beauty samples, organic food, eco products and kids’ crafts have already become popular among online subscription enthusiasts. This initial success has evoked the interests of more companies, which are getting ready to enable a new revenue stream and make repeat shopping easier and worth every penny.

But first things first.

What is subscription commerce and how did this trend start?

Subscription commerce is the advanced version of e commerce. It is a periodically-sustainable (weekly/monthly/annually) business model in which consumers prepay for a specific set of product or service. As a step forward to online shopping, it gives the convenience of receiving a regular supply to a consumer, and is a source of order predictivity to the provider. Strategy wise, this model also gives the confidence to a business about its future revenue streams, and helps it to make decisions that are comparatively more certain and positive.
Though numerous international companies have marked their entry in subscription commerce, Birchbox, which launched in 2010, is said to be one of the firsts to test the water. It was followed by, NatureBox and BarkBox, all of which boast of a minimum of 20-50 percent growth every month.

What can subscription economy do for your business?

Some of the efficiency gains from subscription commerce can be augmented by its ability to forecast revenue on weekly, monthly or annual basis. It gives a fair idea of how much profit a business can expect. The proof that this newest business model is here to stay is all around us. In 2013-2014, for example, venture capitalists added over $300 million in start-up funds to subscription businesses. This was almost double the amount of funding that subscription companies raised a year before. Much if this keen interest in putting together a larger paid audience is undoubtedly due to multi-million turnovers of successful companies in the industry. Even during the dark days of online sales, subscription database grows, capitalizing on consumer loyalty and order predictability. So while traditional ecommerce might struggle to survive the off-season downfall, forward-thinking subscription merchants can unleash a wave of a modern practice that enhances their core business sustainability and helps them to move forward.

Why the time is right to jump in?

The answer is simple – customers want convenience, and if this simple effort means hassle-free shopping for them, it’s worth trying. On top of that, it is an excellent strategy for a company to innovate with a new, more convenient model.

Some innovative subscription businesses around the world

  • – Surfair was the first to launch subscription plans to flight tickets. Starting at $2,500 per month, you could get a certain amount of flights on the West Coast of the United States
  • – In Bangalore, Café Noir is the French restaurant in town and Bangaloreans can now subscribe to their favorite pastries, freshly baked and delivered at home or in the office. Thanks to RecurRex, Café Noir customized cut-off times to plan production better and gave full control over dates to the subscriber