And someone who has been part of this industry for a decade feels good about the fact that we are on the verge of getting out of the shell albeit we seem to be getting into the woods. The current meltdown should not be taken too negatively as it is inevitable in any business and eCommerce is no different.
Despite the challenges and not so friendly ecosystem with slow growth of internet penetration, lack of awareness, lack of strong intent/need to buy online, lack of trust, strong cash economy, abysmally low credit card penetration, lack of convenient payment options, high logistics charges and very few trained eCommerce professionals, the industry has grown to an over $500 Mn industry and is expected to touch $12 Bn by FY 2015-16
Indians are still very conservative when it comes to impulse purchase, we probably take the longest to change our habits and hence one has to have the stamina to not only grow in this country but also to survive. We are a country of 1.2 Bn but every few hundred kilometres we talk, eat, wear and buy differently which is unique to us. We are multiple Europes’ packed into one but spend only few bucks and save for the next generation due to centuries of deprivation. But surely we are on the verge of a big change and revolution, consumption is growing in India and it is growing beyond needs to the wants.
Online retail solves a variety of problems for both consumers and merchants if it is executed efficiently.
Consumers get more transparency in pricing & availability, convenience, feature comparison, availability, awareness and tips/suggestive buying which to a large extent lacks in physical retail.
Merchants can scale and ramp up more effectively online, keeping the cost of distribution to only a fraction of retail distribution. Payments against sale are transparent and remitted within a week. Online presence helps create awareness, discovery, aggregate demand from markets where physically it maybe unviable to reach and also helps brands come in direct touch with the consumers.
Apart from the known challenges of availability, internet reach, timely deliveries; here are some of the points in my opinion which would be relevant in current time to overcome the challenges:
- Competition: There are not too many eCommerce players in the market, despite the recent buzz around eCommerce space becoming too crowded. We need more players, more competition and it will drive all players to innovate on their product mix, supply chain, marketing promotions & reach.
- Involve Brands: Most brands still don’t consider eCommerce as a channel. They either do not consider online to be big enough or take it as a channel conflict and hence too lazy to create any meaningful initiative out of their blank, bland, static websites.I have often observed the online division of a big retail brand struggling to have any share of voice within the organisation. Brands need to get directly involved with online initiatives as it helps reduce cost of distribution which has to be passed onto consumers, there is no channel conflict. It is market creation
- Build Relevance: Create better relevance, connect and trust with buyers and make sure you constantly stay relevant to them. Also create innovative models instead of Ctrl C, Ctrl V models of China or west, we are very different form them.
- Customer Loyalty: Build Loyalties both with buyers and sellers. Word of mouth may travel slower but makes better impact than shouting at the top of the voice, we are the best & cheapest, trust me. Give them reasons to believe your promise and it has to be more than the price. Create brand ambassadors who are influencers on both sides of the ecosystem, remember most players in India are multi-brand online stores so they are neither manufacturers nor importers but depend on suppliers.
The game has just begun as the ecosystem is catching up fast
There are new players with great theme, team and execution across the spectrum: Logistics, payments, catalogue, internet reach & credit/debit card penetration
Consumers are better aware of their preferences, hence verticalisation of the business. Verticalised portals are better equipped to offer depth in catalogue, feature rich experience and relevance to their TG.
There are new breed of logistics service providers like Delhivery & Chhotu for whom the reason for existence is eCommerce. However, it is imperative to go beyond the current set of 10-15K pin codes. Anything in excess of 30K will change the scale in no time. Reach to these ignored markets will bring unimaginable scale from smaller towns. We will discover many emerging markets (BRICs) within India
Multiple payment partners who focus on early stage players unlike banks who prefer to work with only established players. Acceptance of Maestro with all of them will surely be another game changer.
Open source technologies which are faster and cheaper to implement unlike earlier times when it took us 1 year to just get technology and backend processes right, every relevant report, action and exception is offered on a platter.
It’s no surprise that it has taken us more than a decade and 2 big internet busts to get a decent foothold in India and for sure these are the exciting times.
Suneet Manchanda is currently the Co-Founder & COO at Ladyblush.com, prior to this entrepreneurial venture, he was the Vice President & Head Tradus at Ibibo Web Pvt. Ltd. Suneet can be reached on firstname.lastname@example.org