Building Sustainable Internet Retail Enterprise, Key Note by Sandeep Aggarwal, Founder & CEO, Shopclues.com at Internet Retail Expo 2013; in this session Sandeep explained how to set up a sustainable internet retail business.
- India is now the 3rd largest country in terms of Internet population but not revenue top-10 for E-Commerce, after China and US, which creates sizeable audience for any internet business.
- India E-Commerce is Currently at Where China was in 2003, India retail will likely touch $1trillion by 2020 and at 6% penetration (where China was in 2010), the E-Commerce will touch $60bn in India and if India were to see E-Commerce adoption like China, India can reach $60bn in GMV by 2015-16.
- You have strong desire to adopt ecommerce
- Take a long-term approach
- Create a start-up culture
- Be ready for capital investments phase
- Many offline problems will persist and be ready for new set of problems as well
- Solve fundamental issues
- Be metric driven: If you cannot measure, you cannot control
- Harness your core competencies & competitive advantage
- Understand E-Commerce basics: Technology, Retail, Operations
- Do not under estimate marketing cost
- Know the power of scale
- A COD for buyer is great; a COD for service provider is horrible because 30-40% of COD orders will come back to you unclaimed and there are two problems with that, one is when a product comes back you are less by Rs. 100 0r 150 per package and you have not created any sales; second, there is 30% likelihood that the product that comes back to you is not in the same condition as it was send, so you would also think about the salvage value now.
- Internet by structure can be very scalable, if you are retailer think about who is coming to buy from you someone who lives 30KM radius from where your retail outlet is or may be a tourist, no one from anywhere else, just for shopping. But with your website one can create pan India impact, so the good news that the internet offers you a scalability but the bad news is until you chase that scale your economics your operations all those will suffer from lot of inefficiencies. So you have to believe in benefit of scale, you have to know them in the beginning because lot of time you may end up making decisions that may sound irrational to you but eventually if you achieve scalability you will get lot of benefit.