Topic: Emergence of E commerce – a brief History: Indian Scenario

From Wikipedia, the free encyclopedia

Electronic commerce, commonly known as e-commerce or eCommerce, is a type of industry where the buying and selling of products or services is conducted over electronic systems such as the Internet and other computer networks. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange(EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at one point in the transaction's life-cycle, although it may encompass a wider range of technologies such as e-mail, mobile devices social media, and telephones as well.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of business transactions. This is an effective and efficient way of communicating within an organization and one of the most effective and useful ways of conducting business.

E-commerce can be divided into:

E-tailing or "virtual storefronts" on websites with online catalogs, sometimes gathered into a "virtual mall"

Buying or Selling on various websites and/or online marketplaces The gathering and use of demographic data through Web contacts and social

media Electronic Data Interchange (EDI), the business-to-business exchange of data E-mail and fax and their use as media for reaching prospective and established

customers (for example, with newsletters) Business-to-business  buying and selling The security of business transactions

Contents

1   Timeline 2   Business applications 3   Governmental regulation 4   Forms 5   Global trends 6   Impact on markets and retailers

7   Distribution channels 8   See also 9   References 10   Further reading 11   External links

Timeline

A timeline for the development of e-commerce:

1971 or 1972: The ARPANET is used to arrange a cannabis sale between students at the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology, later described as "the seminal act of e-commerce" in John Markoff's book What the Dormouse Said.[1]

1979: Michael Aldrich demonstrates the first online shopping system.[2]

1982: Minitel was introduced nationwide in France by France Télécom and used for online ordering.

1983: California State Assembly holds first hearing on "electronic commerce" in Volcano, California.[3] Testifying are CPUC, MCI Mail, Prodigy, CompuServe, Volcano Telephone, and Pacific Telesis. (Not permitted to testify is Quantum Technology, later to become AOL.)

1984: Gateshead SIS/Tesco is first B2C online shopping and Mrs Snowball, 72, is the first online home shopper[4]

1984: In April 1984, CompuServe launches the Electronic Mall in the USA and Canada. It is the first comprehensive electronic commerce service.[5]

1984: California becomes first US state to enact an Electronic Commerce Act defining basic consumer rights online.[citation needed]

1990: Tim Berners-Lee writes the first web browser, WorldWideWeb, using a NeXT computer.[6]

1992: Book Stacks Unlimited in Cleveland opens a commercial sales website (www.books.com) selling books online with credit card processing.

1992: St. Martin's Press publishes J.H. Snider and Terra Ziporyn's Future Shop: How New Technologies Will Change the Way We Shop and What We Buy. [7]

1992: Terry Brownell launches a fully graphical, iconic navigated Bulletin board system online shopping using RoboBOARD/FX.[citation needed]

1993: Paget Press releases edition No. 3 of the first[citation needed] AppStore, The Electronic AppWrapper[8]

1994: Netscape releases the Navigator browser in October under the code name Mozilla. Netscape 1.0 is introduced in late 1994 with SSL encryption that made transactions secure.

1995: The US National Science Foundation lifts its former strict prohibition of commercial enterprise on the Internet.[9]

1995: Thursday 27 April 1995, the purchase of a book by Paul Stanfield, Product Manager for CompuServe UK, from W H Smith's shop within CompuServe's UK Shopping Centre is the UK's first national online shopping service secure transaction. The shopping service at launch featured W H Smith, Tesco, Virgin Megastores/Our Price, Great Universal Stores (GUS), Interflora, Dixons Retail, Past Times, PC World (retailer)and Innovations.[10]

1995: Jeff Bezos launches Amazon.com and the first commercial-free 24-hour, internet-only radio stations, Radio HK and NetRadio start broadcasting. Dell and Cisco begin to aggressively use Internet for commercial transactions.[citation needed] eBay is founded by computer programmer Pierre Omidyar as AuctionWeb.

1996: IndiaMART B2B marketplace established in India. 1996: ECPlaza B2B marketplace established in Korea. 1996: Sellerdeck, formerly Actinic, the UK's first PC/LAN e-commerce

platform established.[citation needed]

1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.[11]

1999: Alibaba Group is established in China. Business.com sold for US $7.5 million to eCompanies, which was purchased in 1997 for US $149,000. The peer-to-peer filesharing software Napster launches. ATG Stores launches to sell decorative items for the home online.

2000: The dot-com bust. 2001: Alibaba.com achieved profitability in December 2001. 2002: eBay acquires PayPal for $1.5 billion.[12] Niche retail

companies Wayfair and NetShops are founded with the concept of selling products through several targeted domains, rather than a central portal.

2003: Amazon.com posts first yearly profit. 2004: DHgate.com, China's first online b2b transaction platform, is established,

forcing other b2b sites to move away from the "yellow pages" model.[13]

2007: Business.com acquired by R.H. Donnelley for $345 million.[14]

2009: Zappos.com acquired by Amazon.com for $928 million.[15] Retail Convergence, operator of private sale website RueLaLa.com, acquired by GSI Commerce for $180 million, plus up to $170 million in earn-out payments based on performance through 2012.[16]

2010: Groupon reportedly rejects a $6 billion offer from Google. Instead, the group buying websites went ahead with an IPO on 4 November 2011. It was the largest IPO since Google.[17][18]

2011: Quidsi.com, parent company of Diapers.com, acquired by Amazon.com for $500 million in cash plus $45 million in debt and other obligations.[19] GSI Commerce, a company specializing in creating, developing and running online shopping sites for brick and mortar businesses, acquired by eBay for $2.4 billion.[20]

2012: US eCommerce and Online Retail sales projected to reach $226 billion, an increase of 12 percent over 2011.[21]

2012: US eCommerce and Online Retail holiday sales reach $33.8 billion, up 13 percent.[22]

Business applications

An example of an automated online assistant on a merchandising website.

Some common applications related to electronic commerce are the following:

Document automation  in supply chain and logistics Domestic and international Payment systems Enterprise content management Group buying Automated online assistants Instant messaging Newsgroups Online shopping  and order tracking Online banking Online office suites Shopping cart software Teleconferencing Electronic tickets

Social-networking

Governmental regulation

In the United States, some electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial e-mails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive.[23] Using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers' personal information.[24] As result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC.

The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008, amends the Controlled Substances Act to address online pharmacies.[25]

Internationally there is the International Consumer Protection and Enforcement Network (ICPEN), which was formed in 1991 from an informal network of government customer fair trade organisations. The purpose was stated as being to find ways of co-operating on tackling consumer problems connected with cross-border transactions in both goods and services, and to help ensure exchanges of information among the participants for mutual benefit and understanding. From this came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about online and related transactions with foreign companies.

There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Commerce Stearing Group as well as working on common privacy regulations throughout the APEC region.

In Australia, Trade is covered under Australian Treasury Guidelines for electronic commerce,[26] and the Australian Competition and Consumer Commission [27]  regulates and offers advice on how to deal with businesses online,[28] and offers specific advice on what happens if things go wrong.[29]

Also Australian government e-commerce website [30]  provides information on e-commerce in Australia.

In the United Kingdom, The FSA (Financial Services Authority)[31] is the competent authority for most aspects of the Payment Services Directive (PSD). The UK implemented the PSD through the Payment Services Regulations 2009 (PSRs), which came into effect on 1 November 2009. The PSR affects firms providing payment services and their customers. These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a new class of regulated firms known as payment institutions (PIs), who are subject to prudential requirements. Article 87 of the PSD requires the European Commission to report on the implementation and impact of the PSD by 1 November 2012.[32]

Forms

Contemporary electronic commerce involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of electronic commerce.

On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are very hot and pressing issues for electronic commerce.

Aside from traditional e-Commerce, m-Commerce as well as the nascent t-Commerce[33] channels are often seen as the current 2013 poster children of electronic I-Commerce.

Global trends

In 2010, the United Kingdom had the biggest e-commerce market in the world when measured by the amount spent per capita.[34] The Czech Republic is the European country where ecommerce delivers the biggest contribution to the enterprises´ total revenue. Almost a quarter (24%) of the country’s total turnover is generated via the online channel.[35]

Among emerging economies, China's e-commerce presence continues to expand. With 384 million internet users, China's online shopping sales rose to $36.6 billion in 2009 and one of the reasons behind the huge growth has been the improved trust level for shoppers. The Chinese retailers have been able to help consumers feel more comfortable shopping online.[36] China's cross-border e-commerce is also growing rapidly. E-commerce transactions between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of China's total international trade [37]

Other BRIC countries are witnessing the accelerated growth of eCommerce as well. In Russia, the total ecommerce market is projected to total somewhere between 690 billion rubles ($23 billion) and 900 billion rubles ($30 billion) in 2015, at 2010 values. This will equal 5% of total retail volume in Russia. Longer-term, the market size of Russian e-commerce could reach $50 billion by 2020. Brazil's eCommerce is growing quickly with retail eCommerce sales expected to grow at a healthy double-digit pace through 2014. By 2016, eMarketer expects retail ecommerce sales in Brazil to reach $17.3 billion.[38] India's ecommerce growth, on the other hand, has been slower although the country's potential remains solid considering its surging economy, the rapid growth of internet penetration, English language proficiency and a vast market of 1.2 billion consumers (although perhaps only 50 million access the internet through PCs and some estimate the most active group of e-commerce customers numbers only 2-3 million). E-commerce traffic grew about 50% from 2011 to 2012, from 26.1 million to 37.5 million, according to a report released by Com Score. Still much of the estimated 14 billion dollars in 2012 ecommerce was generated from travel sites.

eCommerce is also expanding across the Middle East. Having recorded the world's fastest growth in internet usage between 2000 and 2009, the region is now home to more than 60 million internet users. Retail, travel and gaming are the region's top eCommerce segments, in spite of difficulties such as the lack of region-wide legal frameworks and logistical problems in cross-border transportation[citation needed]. E-Commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them.[39][40]

In 2012, ecommerce sales topped $1 trillion for the first time in history.[41]

Impact on markets and retailers

Economists have theorized that e-commerce ought to lead to intensified price competition, as it increases consumers' ability to gather information about products and prices. Research by four economists at the University of Chicago has found that the growth of online shopping has also affected industry structure in two areas that have seen significant growth in e-commerce, bookshops and travel agencies. Generally, larger firms are able to useeconomies of scale and offer lower prices. The lone exception to this pattern has been the very smallest category of bookseller, shops with between one and four employees, which appear to have withstood the trend.[42]

Distribution channels

E-commerce has grown in importance as companies have adopted Pure-Click and Brick and Click channel systems. We can distinguish between pure-click and brick and click channel system adopted by companies.

Pure-Click or Pureplay companies are those that have launched a website without any previous existence as a firm.

Bricks-and-Clicks companies are those existing companies that have added an online site for e-commerce.

See also

E-commerce in IndiaFrom Wikipedia, the free encyclopedia

India has an internet user base of about 137 million as of June 2012.[1]

[2] The penetration of e-commerce is low compared to markets like the United States and the United Kingdom but is growing[3] at a much faster rate with a large number of new entrants.[4] The industry consensus is that growth is at an inflection point.[5]

Unique to India (and potentially to other developing countries), cash on delivery is a preferred payment method. India has a vibrant cash economy as a result of which 80% of Indian e-commerce tends to be Cash on Delivery. Similarly, direct imports constitute a large component of online sales. Demand for international consumer products (including long-tail items) is growing much faster than in-country supply from authorised distributors and e-commerce offerings.

Contents

1 Market size and growth 2 Infrastructure 3 Funding 4 See also 5 References

Market size and growth

India's e-commerce market was worth about $2.5 billion in 2009, it went up to $6.3 billion in 2011 and to $14 billion in 2012.[1] About 75% of this is travel related (airline tickets, railway tickets, hotel bookings, online mobile recharge etc.). Online Retailing comprises about 12.5% ($300 Million[6] as of 2009). India has close to 10 million online shoppers and is growing at an estimated 30%[7] CAGR vis-à-vis a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of sales.

Key drivers in Indian e-commerce are:

Increasing broadband Internet (growing at 20%[8] MoM) and 3G penetration.[9]

Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes

Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers

Busy lifestyles, urban traffic congestion and lack of time for offline shopping

Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs

Increased usage of online classified sites, with more consumer buying and selling second-hand goods[10]

Evolution of the online marketplace model with sites like eBay, Infibeam, and Tradus. The evolution of ecommerce has come a full circle with marketplace models taking center stage again.

India's retail market is estimated at $470 billion in 2011 and is expected to grow to $675 Bn by 2016 and $850 Bn by 2020, – estimated CAGR of 7%.[11] According to Forrester, the e-commerce market in India is set to grow the fastest within the Asia-Pacific Region at a CAGR of over 57% between 2012–16.[12]

As per "India Goes Digital",[13] a report by Avendus Capital, a leading Indian Investment Bank specializing in digital media and technology sector, the Indian e-commerce market is estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a sizable portion (87%) of this market today. Online travel market in India is expected to grow at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by 2015. Indian e-tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015.

Overall e-commerce market is expected to reach Rs 1,07,800 crores (US$ 24 billion) by the year 2015 with both online travel and e-tailing contributing equally. Another big segment in e-commerce is mobile/DTH recharge with nearly 1 million transactions daily by operator websites like Airtel.in, Vodafone.in and third party sites like paytm.com,ezrecharge.in,rechargeitnow.com

Infrastructure

Many open source ecommerce software and platforms are growing in prominence including Magento. There are many hosting companies working in India but most of them are not suitable for eCommerce hosting purpose, because they are providing much less secure and threat protected shared hosting. eCommerce demand highly secure, stable and protected hosting.[citation needed] Trends are changing with some of eCommerce companies starting to offer SaaS for hosting webstores with minimal one time costs.

There could be various methods of ecommerce marketing such as blog, forums, search engines and some online advertising sites like Google adwords and Adroll.

India got its own version of the so-called Cyber Monday in December 2012, when Google India partnered with e-commerce companies including Flipkart, HomeShop18, Snapdeal, Indiatimes shopping and MakeMyTrip. "Cyber Monday" is a term coined in the USA for the Monday coming after Black Friday, which is the Friday after Thanksgiving Day.[14]

In early June 2013, Amazon.com launched their Amazon India marketplace without any marketing campaigns.

Funding

As of 2012, most of the e-commerce companies are yet to start making money. However, due to their growth prospects, many venture capital firms such as Accel Partners have invested considerably. In one of the biggest fund raising, Flipkart.com, in August 2012, raised about  8.22 billion (US$130 million). Entertainment ticketing website BookMyShow.com raised  1 billion (US$15 million) investment by Accel Partners.[1]

See also

Direct imports Disintermediation Electronic Commerce

E-commerce in India may touch $34 billion by 2015NEW DELHI: Online shopping in India, which is at a nascent stage, is poised to witness significant growth in the next few years, with the industry likely to touch USD 34.2 billion by 2015."It is estimated, that around 27 million (in India) are active mobile internet users. Currently 4 per cent are buying products through mobiles and in next four years time, it can go up to 20 per cent," Homeshop18.com CEO Sundeep Malhotra told PTI.

Going by the current trend, the industry is expected to grow at a compound annual growth rate of 57 per cent and is likely to reach USD 34.2 billion by 2015, he said.

The number of mobile users in the country is expected to touch 1200 million by 2015, Malhotra said.

Meanwhile, in order to boost online shopping, an industry-wide initiative was carried out in the country on December 12.

Under it, Google India partnered with a host of e-commerce players like Flipkart, Snapdeal, Homeshop18, IndiatimesShopping and Makemytrip to bring its own version of 'Cyber Monday'.As part of this event, internet users could log on and get deals for 24 hours on that day from over 50 partners across e-commerce, local and classified, online travel sites and BFSI (banking,financial services and insurance) industries."Seeing the surge in traffic and sales, we believe that this phenomena is expected to be a tremendous success in India as well," Malhotra said. He recalled that "Homeshop18.com witnessed 300 per cent increase in sales with majority of its electronics and lifestyle offers sold out by afternoon on December 12.

The significant growth in online activity in India reflects that the evolving nature of the market and the Indian consumer, he said. Opportunity in e-commerce are huge because of a large population base, changing consumer lifestyle and lack of infrastructure for bigger brick and mortar stores.

With more than hundreds of websites currently operating in the sphere and many more to join the space, it is obvious that e-commerce is going to be a game changer in India, he said.

"We believe that such an industry initiative is definite to grow and improve the overall online shopping trend", he added.

Can Amazon crack Indian e-commerce market?Shelley Singh, ET Bureau | Sep 26, 2013, 06.59 PM IST

In just three months, MirchiMart, a Delhi-based online retailer of mobile phones, has seen its business jump by 50%. In the same period, another electronics retailer Universal, which runs 500 stores in South India, has shipped tablets and smartphones to every state and union territory in India. And AXA PDA Lounge, a Bangalore-based retailer of mobile phones and accessories, has seen its business grow by one-third, selling products as far away as Srinagar and Imphal.

Behind the increase in sales and reach of these three retailers is their decision to sell their products also via Amazon.in, the Indian platform of the world's largest online retailer launched in June. While this is doing wonders to their sales, it's a small step to bigger things forAmazon India, but far from a done deal.

Indian rules don't allow Amazon to stock and sell products, which is how it earned 60% of its 2012 revenues of $61 billion (Rs 3,66,000 crore). So, as it bides its time for rules to change in India, it is dipping its toes in this $12 billion market by being an online marketplace, hosting and enabling 500 sellers like MirchiMart, Universal and AXA PDA Lounge. "If regulation permitted Amazon.in to be a seller, it would be good for the consumer," says Amit Agarwal, vice president and country manager, Amazon Seller Services. "We will be able to offer more choice."

In his 14 years at the 19 -year-old Amazon, Agarwal has seen the company do that, with great purpose, force and results. Before he relocated to lead Amazon in India, the IIT Bombay and Stanford graduate helped build the marketplace business in the US, started its cloud computing business, did a stint with Amazon International and did two years as advisor to Amazon founder Jeff Bezos. He has seen Amazon power ahead in developed markets. And he has seen Amazon move gingerly in emerging markets, hemmed in by rules, local consumer behaviour and local competition.

India is the 12th country for which Amazon has a dedicated website. It's only its third emerging market, after China in 2004 and Brazil in 2012, and this is a space where Amazon is yet to stamp its presence the way it has done, say, in the US. "In Brazil, Amazon's offering is fairly new and focuses on e-books," says

Zia Daniell Wigder, vicepresident and research director, Forrester Research. "However, it will face competition from traditional retailers in Brazil, who have now gone online."

Amazon has been longer in China, which is also a much bigger market. According to Praveen Sengar, research analyst at Gartner, e-commerce in China is a $197 billion market, against $220 billion in US. "China will overtake the US as the largest e-commerce market in a few years," he says.

"But Amazon is not among the top five sellers in China. Even in developed economies like Japan, local player Rakuten is much bigger than Amazon. Companies have to localize to succeed in emerging markets and Amazon has been unable to do so in China."

The local challengeLike China, e-commerce in India is throbbing with local players — 75-100 start-ups, driven by entrepreneurs and backed by venture capital. "It's hard for an executive to compete with an entrepreneur," feels Sanjeev Aggarwal, managing director of Helion Venture Partners. "The passion and energy they bring is very different."

Besides, adds Aggarwal, these start-ups understand the local market — like low-value transactions, cash on delivery and supplying to 20,000 pin codes. "You can't run retailing in India with executives installed from the US," he says. "Amazon will replicate what has worked for it in other markets." In developed markets, what has worked for Amazon is its large product catalogue competitive pricing, good customer orientation, a culture of innovation, deep pockets (it has about $11.5 billion in cash and marketable securities) and branding.

In India, too, it will gradually leverage all of this.

Globally, Amazon offers products in 40 categories and two million sellers, and draws about 100 million buyers. "Amazon is like Walmart — keep a huge inventory and sell at a low price," says Anshul Bansal, who quit as vice president in the investment banking division of Yes Bank in 2011 to become an online retailer of sarees on eBay, another online marketplace.

In India, Amazon is currently offering 13 product categories and is planning to add more in time for the festive season.

Sengar calls it a "timely entry." According to Pragya Singh of Technopak -- a

management-consulting firm -- organized, brick-and-mortar retail has 7-8% penetration and does not reach small cities. "E-tailing is less than $1 billion at present, with plenty of headroom to grown, in sync with growth of mobile internet users," says Singh, associate director, retail, Technopak.

Singh believes the tipping point in e-tailing is three to four years away.

"VC-funded models don't have the deep pockets to match global companies," he says. Amazon too is in no hurry. "We are driven for the long term," says Agarwal. "We take a 7-10 years time frame for the seed to sprout and not three years or three months."

Sengar sees Amazon making an acquisition. "It costs Rs 1,200-1,500 to acquire a customer, while an average order value per year is $200 (about Rs 12,000," he says. "An acquisition will help it obtain customers who are used to buying online, besides warehouses." Agarwal deflects queries on acquisitions. "At, present we are focussed on customer experience," he says. "I won't speculate on future strategy. We are here for the long haul." 

For now, Amazon is content to build its marketplace model by adding sellers from the pool of 14 million small and medium enterprises in India who have something to sell. That model is what eBay is founded on — it does not own warehouses and products are shipped directly from sellers — and it's what Flipkart,the largest online retailer in the country today, launched earlier this year. 

While eBay, which has been in India for about a decade, has 30,000 sellers, Amazon has 500 currently. While sellers can express an interest to be on the Amazon platform, the company decides. "It's a due diligence we do on the ability of a seller to provide a good customer experience," says Agarwal. 

These, typically, include the kind of stock a seller has and its ability to complete an order on time. 

The building challengeAmazon does not charge sellers for listing products and has no cap on how many products can be listed. For the first year of its operations, Amazon has also waived its monthly subscription fee and transaction fee (about 10-15% of the price of an item). "Buyer 'footfall' is the biggest advantage sellers get on Amazon," says Dinesh Agarwal, founder-CEO of IndiaMart.com, a business-to-business marketplace. 

Mumbai-based MX Information Systems has a retail outlet and 14 shop-in-shops or counters in large multi-brand retail stores or malls. It is also a seller on Amazon. Satish Bathija, its director, says that being on Amazon increases the catchment area for its products, helps sell on the back of a global brand, creates trust among buyers, and offers access to Amazon services like payment gateways, shipping and logistics. 

"We see online business grow faster than offline," says Bathija. 

A seller on Amazon can ship products directly or through Amazon, from its 1,50,000 sq ft warehouse on the outskirts of Mumbai. In case of the latter, buyers can see an FBA tag (Fulfilled By Amazon) alongside the product. "We don't need to invest in manpower for shipping, packing and logistics," says Bathija, "though we have to pay for payment gateway (for credit-card sales)." 

Some retailers feel that if and when Amazon can sell on its own, it will threaten its portfolio of sellers, even as it promotes their interests. "Amazon does not share market research data with sellers and uses that data to push its own products," says Bansal, proprietor of Old India Republic, a retailer of sarees on eBay. "Small sellers feel threatened by a giant like Amazon." 

Agarwal, today, emphasizes on getting the basics right. "It's just been three months since we launched, and we believe consumers care more about low prices, wide selection and reliable delivery," he says. "We are focussed on that."

Amazon is here, but it's content to dip its toes while it waits for regulations to change in its favour.

All About eCommerce in India | Trends, Growth, NewsGateway to eCommerce Knowledge

Ecommerce for Optical BusinessPosted by Sunil GR on October 16, 20130 Comments

I got couple of enquiries from opticians to setup an Ecommerce store. It’s a nice Business to

go online, but there are lots of challenges. The major one being, the variants for lenses.

There are hundreds of variants which include power, shape, anti-glare and for both the eyes.

And each variant has different prices. The product page has to be built in such a way that

the customer has to choose from the huge drop down list and for each eye. Then he checks

out. If the technology supports this particular feature of many variants for one product, the

Ecommerce store can be setup easily.

Second major challenge I see is on the customer’s end of gaining confidence and trust. What

if the wrong product is shipped? Can the customer check if the product is right? If the

customer ignores it and start using it, there are high chances that the power goes up. The

Ecommerce site’s quality check has to be impeccable. High standards have to be defined

and a good return policy has to be made for these products. Customer should be able to

return the goods and get back the right product easily and conveniently.

Unless the service levels are high, technology is good and policies are fool proof, the Optical

lenses or contact lenses business online can never be successful. But this is a huge

untapped market in India. And with high levels of commitment to services, one can master

this market.

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How not to run an Ecommerce companyPosted by Sunil GR on October 8, 20130 Comments

I will tell you all a story about a startup company, which sent shivers in the hearts of big

wigs of Ecommerce solution providers in India, but failed to catch up with the Ecommerce

blitzkrieg and with lack of adaptability, focus, it eventually collapsed.

This company had the first mover advantage in Ecommerce Industry in India. They set up

the platform business, made a good solution and powered many stores. It was famous, until

the young platform providers entered the market and grabbed the market share. Though

they had a good head start, why did they eventually fail? What should any company learn

from this?

Firstly, to run a company like this, you should have a strong, dynamic team or a deep pocket

investor. This company had neither. Money is still a secondary part; a sound team is what

was lacking in the company. Every other member in the team is either a relative or from the

same geographical area as the management. It was really tough to penetrate into the

management with any good idea. Well, the so called heads of the department were not

really masters of their area. The same culture eventually flowed into the lower departments.

More than working for the company, every individual was working for himself to survive in

the company for as long as possible, playing politics. Lesson to be learnt, one should have a

good team to succeed.

Secondly, the process. Well there was no process in the first place. There was only one

process. The employees have to listen to the management. If they don’t, eventually they will

face the heat in some or the other way. The result, no ideas flow in the system. Management

is not ready to buy ideas. If you give any, you will be rejected. If you debate a

management’s idea, you will face the heat. Well, how can an employee get motivated in this

environment. Lesson learnt, Management has to listen, be ready to listen. Employees are

not your enemies. They are trying to help you grow your organization.

Thirdly, The people, precisely senior managers. The senior managers and management

looked like they teamed up together against the rest of the employees. There is no proper

information flow. I could see there were more egos flowing than the ideas between the

teams. The senior management was busy impressing and buttering the management. The

middle management was busy impressing and buttering senior management and so on and

so forth. Whatever revenues got generated was due to the Industry picking up as a cycle.

Fourthly, the Technology. When the product development started, the technology was good.

As it should happen with every successful product, the technology kept falling down rather

than improvising. It has become so complex now, that it can never compete with much

simpler solutions in the market now. This again is because of the lack of Vision, foresight

and of course the people.

Finally, the vision of the company was never clear. Every other month there was a new

strategy, be it in technology, sales or the Business Expansion. And these strategies were

never analyzed and learnt from the mistakes. Well the real problem was assigning wrong

jobs and responsibilities to totally wrong people. You can’t expect a football player to score a

century in a cricket match.

Well this is a nice case study, which helps us learn how not to run a company. It’s on the

verge of closing the Business and pulling the shutters down. Let’s all remember one thing.

Business, emotions, favoritism will never go together. If you want all these, then the road

ahead for a company is grave yard.

Process and Culture

A company’s success largely depends on the process and culture that they imbibe in an

organization. My stress would be on the process that is designed for the execution. You can

recruit hundred employees for every idea and strategy you implement. Or you can design a

nice process and let the process take care of the success of the strategy and idea.

The culture of the company comes from the vision and people of the company. The DNA of

the company is very important for the success. The vision and the people in the company

contribute to the process to be implemented in the organization. This process automatically

defines a culture which contributes to the success of the company in the long run. Of course

there will be lot of hindrances in setting up the process, but the vision and the consistency is

important to get it right.

So, having a nice vision and employees are very important to run a successful company. The

process and people have to be continuously reviewed and have to be put on right track in

sync with the vision. Once this is done, you don’t need hundreds of employees to be

successful, but a handful of people with a nice process is enough to get to success.

about ecommerce trends

How not to run an Ecommerce company

I will tell you all a story about a startup company, which sent shivers in the hearts of big

wigs of Ecommerce solution providers in India, but failed to catch up with the Ecommerce

blitzkrieg and with lack of adaptability, focus, it eventually collapsed.

This company had the first mover advantage in Ecommerce Industry in India. They set up

the platform business, made a good solution and powered many stores. It was famous, until

the young platform providers entered the market and grabbed the market share. Though

they had a good head start, why did they eventually fail? What should any company learn

from this?

Firstly, to run a company like this, you should have a strong, dynamic team or a deep pocket

investor. This company had neither. Money is still a secondary part; a sound team is what

was lacking in the company. Every other member in the team is either a relative or from the

same geographical area as the management. It was really tough to penetrate into the

management with any good idea. Well, the so called heads of the department were not

really masters of their area. The same culture eventually flowed into the lower departments.

More than working for the company, every individual was working for himself to survive in

the company for as long as possible, playing politics. Lesson to be learnt, one should have a

good team to succeed.

Secondly, the process. Well there was no process in the first place. There was only one

process. The employees have to listen to the management. If they don’t, eventually they will

face the heat in some or the other way. The result, no ideas flow in the system. Management

is not ready to buy ideas. If you give any, you will be rejected. If you debate a

management’s idea, you will face the heat. Well, how can an employee get motivated in this

environment. Lesson learnt, Management has to listen, be ready to listen. Employees are

not your enemies. They are trying to help you grow your organization.

Thirdly, The people, precisely senior managers. The senior managers and management

looked like they teamed up together against the rest of the employees. There is no proper

information flow. I could see there were more egos flowing than the ideas between the

teams. The senior management was busy impressing and buttering the management. The

middle management was busy impressing and buttering senior management and so on and

so forth. Whatever revenues got generated was due to the Industry picking up as a cycle.

Fourthly, the Technology. When the product development started, the technology was good.

As it should happen with every successful product, the technology kept falling down rather

than improvising. It has become so complex now, that it can never compete with much

simpler solutions in the market now. This again is because of the lack of Vision, foresight

and of course the people.

Finally, the vision of the company was never clear. Every other month there was a new

strategy, be it in technology, sales or the Business Expansion. And these strategies were

never analyzed and learnt from the mistakes. Well the real problem was assigning wrong

jobs and responsibilities to totally wrong people. You can’t expect a football player to score a

century in a cricket match.

Well this is a nice case study, which helps us learn how not to run a company. It’s on the

verge of closing the Business and pulling the shutters down. Let’s all remember one thing.

Business, emotions, favoritism will never go together. If you want all these, then the road

ahead for a company is grave yard.

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Idea to increase salesPosted by Sunil GR on August 28, 2013 0 Comments

My friend is a professor in a fashion college here in India and I had a chance to go attend

one of his lectures. The topic was how to train your mind to perceive things at a glance. And

the students were discussing on innovating games to train the mind.

Something strikes my mind then. Why not have a marketing angle to it. If we can somehow

engage customers who are coming to the Ecommerce website with innovative activities,

there is a chance that the customer will stay as long as possible and likely to buy something.

This is what happened with Facebook way back when they introduced games like Farmville

and mafia gangs. It might work like this. Let’s take an example of an apparel site. The site

can introduce some activity like, find 10 colors with this kind of fabric and you get 10%

discount. The technology is very simple where we can have a counter which validates and

then the person gets discount.

There are two things to be observed here. Customer unknowingly will browse through most

of the products on your website. He will come to know what variety you have. Secondly, he

spends a lot of time on the website and with the discount coupon he earns, he will most

likely end up buying something. Well the focus is on buying. Why not try something different

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Promotions RedefinedPosted by Sunil GR on August 23, 2013 0 Comments

In the previous posts, we discussed how the promotions have to done for the products. It

could be with discount vouchers, coupons, and cart level promotions. Well these work nicely

and results are being seen. There is a new concept of promotion that has come into the

market. It is called as Bundling promotions.

This is how it works. On the product image, three or more products are added and bundled

as a set. Like in the Women garments, apart from the kurti shown, bangles, footwear, etc

are included in the picture. A customer should be able to change the products that are there

in the image and choose what goes with it. Here comes the interesting part. Whatever be

the product selection by the customer, the price of the total image remains the same. Little

tweaking and product category sorting will do the trick.

The advantage is that this helps in cross selling of the products. The excess stock can be

pushed away and customer is happy to choose from a variety of list and is happy to buy

products that go along with the original product. Let’s try this and increase stickiness to the

website and invite more sales.

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A Dash Board for MarketplacesPosted by Sunil GR on August 7, 2013 0 Comments

Many of my customers who are regular vendors and Ecommerce players have a common

problem. Managing the products on the marketplaces. We have seen in recent times that

many vendors are looking at listing their products on all the marketplaces in India as it gives

them decent number of orders. And the money spent on acquiring clients on their regular

ecommerce sites are pretty high. So what are the issues faced by these vendors and what

could be a possible solution?

Well, manpower is the first problem that these vendors face when it comes to managing the

catalog on the marketplaces. Activities like talking to the marketplaces, listing the catalog,

running promotions on regular basis, receiving the orders, shipping them as per the

commitment to the marketplaces, generating invoices to the marketplaces and receiving

money from them. All these need at least one resource to manage from the vendor. Imagine

this activity for more than 10 marketplaces. Its tough to manage with few resources. When

the vendors are running into losses with each shipped product, it really is a nightmare to do

business in India in Ecommerce.

A possible solution is to have a dashboard which seamlessly connects to all the

marketplaces. From this dashboard, one can choose the products to be listed on various

marketplaces. The orders can be received here and payments to be received also can be

viewed and managed here. It will be great if the marketplaces can give you analysis about

your catalog right in this dash board. This will make the lives of all the vendors very easy.

Lot of cost can be saved in terms of man power, the operations can be managed in a simple

and efficient way. But how does one make a dashboard?. You have to talk to the

marketplaces and ask for API’s that can be integrated to your website or your application.

Platform service providers can also take this initiative and extend it to their customers. Not

all the marketplaces are ready to open up the API’s now. But, this should eventually happen

and every marketplace has to open up the API and integrate. Life in Ecommerce will be

simpler with this Dashboard.

What is a Marketplace?I was approached by a budding entrepreneur and he wanted to make a Marketplace. And the concepts of Marketplace that he has in mind were completely different. That is the main reason for me to write these few words. Now there is a very large difference between a Marketplace and a regular Ecommerce website. In a regular Ecommerce website, the product catalog is displayed with PG and shipping integration.  When order is placed by a customer, the website ships the product. It’s as simple as that. Now when it comes to marketplace, there will be vendors who come into picture. A product can have many vendors. Here the Website acts as a platform for various vendors to showcase their products. The end customer has an option to choose the vendor from which the product has to be purchased. Once the order is placed, the vendor ships the product directly to the customer. For this to happen, Vendor should be given total or partial control over the website in order to upload/update his product catalog and receive information about the orders placed for his product. The Market place should give all these facilities to the vendor. Of course the payment transactions will happen on the Marketplace website, who in turn will share the monies with the vendor as per the orders the vendor receives. So in Marketplace model, the shift and focus is more on the vendors. This I think is the main difference between a Marketplace and a regular Ecommerce website.

about Payment Gateway

How to Avoid Charge Backs?

about Payment Gateway

How to Avoid Charge Backs?Posted by Sunil GR on September 14, 2011 0 Comments

So what are charge backs? Any credit/debit card transaction which is fraudulent and where

there is no mistake of the customer invites the charge back from the Retailer. Let’s say a

credit card is stolen, and the transaction happens, or the product is purchased and it’s out of

stock at the Retailer and the customer asks to return the money, situations like these invite

Charge backs where the retailer has to refund the money to the customer. This is bad for the

Retailer as there will be a fine levied on the Retailer for the charge back. If there are

frequent charge back situations, Banks might also black list these Retailers.

Here are some of the practices which will avoid the charge back situations.

1. Use CVV – The Code Value Verification is an important number that comes with the

Card. You can ask the customers to enter the cvv number for the transaction.

2. Use two factor authentications. A concept like Verified by VISA etc allows you to

have one more level of security by having a password. Unless you type this

password, the transactions will not happen. This multi level authentication is a huge

relief for Retailers to avoid Credit card frauds.

3. Always have a special focus on the purchases that are costly and which are paid for

quick delivery. Also concentrate and recheck on those products which are

expensive and can be resold. You can call these customers and authenticate them

when the purchase is happening. Customers will be more than happy of the

legitimacy of the transaction is checked if you feel it’s suspicious. It increases

customer loyalty.

These practices are not fool-proof and extensive. If implemented, they will reduce the

charge backs to an extent.

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How Does a Payment Gateway Work?Posted by Sunil GR on August 24, 2011 0 Comments

A Payment Gateway is an application that facilitates transaction of purchases over internet.

It uses Internet as the communication medium for this activity to happen. Here is how it

works.

 

1. A Customer makes a purchase over internet with a credit or debit card.

2. The Internet browser uses Secure Socket layer and encrypts the information being

sent.

3. Website collects the information and sends it to the payment Gateway.

4. Payment Gateway in turn sends this information to the Card Associations ( VISA,

MASTER etc).

5. The Card association forwards the information to the bank that issued the card.

6. The Bank checks if there are sufficient funds in the card and sends an authorization

code to the Card association.

7. This code confirms to the payment processor to process if there are funds in the

card or decline if they are not with proper reasons.

8. The payment processor sends this authorization code to the payment Gateway.

9. Payment Gateway then sends the code to the Business to process or decline the

payment.

10. Finally the Business or website takes the action accordingly and sends receipts to

the customer.

This is how in a nutshell how a payment gateway works for any service provider, give and

take couple of points here and there. Though this process looks lengthy, it actually happens

in seconds.

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Top Five Features Retailer Should Look At in a Payment GatewayPosted by Sunil GR on August 16, 2011 0 Comments

Payment Gateway is a service that enables a Retailer to accept credit card transactions

online. Needless to say this is the most important part of ecommerce solution.  In India,

customers took a lot of time to get convinced to use the plastic card to transact over

internet for the simple reason that they do not trust online transactions. Credit card fraud,

charge back problems, no proper customer service are some of the reasons. But ecommerce

in India has come a long way and customers are using the credit cards for their transactions

online. What should a Retailer look for in a Payment Gateway?

Credit card fraud/Charge Back policies.

Credit card or online fraud is the most important

feature that a Retailer should be looking at when choosing a Payment Gateway. People who

are not tech savvy are an easy target for hackers to get the credit card information. Phishing

attacks are the easiest way to get this done. The payment Gateway providers should have

stringent policies and techniques to secure the information of the card holders. Multi factor

authentication and other techniques should be used to secure the information during the

transaction. Let’s say a card is compromised and transaction happens on the website,

refunding the monies back to the customer is called the Charge back feature. Retailer has to

be thorough in terms of the policies that are in place for the Charge backs. The process, the

time taken to refund the money, the penalties involved and how much of this process is

transferred to the Retailer have to review before taking the Payment Gateway.

Lower Transaction Discount Rate

Payment Gateways earn their money for the services that they provide in three ways. First

would be the Non-refundable set up cost, which has no standard policy. This is charged

according to the pocket size of the customer. Secondly the TDR, the percentage charged for

every transaction on the website. Thirdly the Annual Maintenance cost. It’s always wise to

choose the payment gateway with low TDR. It’s obvious that lot of energies will be put to get

the customers on to the website and make them buy. So sharing as little percentage as

possible on each transaction to the service provider is what should be kept in mind when

signing up with them

Integration and interface

The integration of the Payment Gateway should be very easy and the interface should be

very comfortable. Not every Retailer is tech savvy and many get the solution developed by a

programmer. If there’s any problem on the integration, it’s very tough for the Retailer to fall

back on these programmers all the time.  Simple things that can be handled by a Retailer

should be put forth in such a way that it should be very easy for any layman to use it.

International Payments

A provision to accept international payments should be available with the Payment

Gateways. Ecommerce has paved way for reaching customers across the world. A payment

gateway in India should be able to accept payments of all or most of  the currencies in the

world. The process should be fool proof in terms of currency conversion and transfer of

funds across the banks and countries. Charge back for these kinds of scenarios is very tough

and the policies for the smooth transactions should be very sound.

Good Customer Services and high uptime.

One should have lot of patience these days when they contact the customer service of any

company in any industry. These patience levels are for being on hold for long minutes before

someone picks up the call and initiate the process. Check how the customer service is for

the payment gateways. There is a company in Hyderabad which has the policy that the

customer’s call has to be answered in 5 seconds. Policies like these actually increase the

trust of the services provided by the providers. The services of the payment gateway should

be always high. The Retailer cannot afford to lose business because of the down time of the

Payment Gateway Services. Retailer should thoroughly check the Service Level Agreements

of the Payment Gateway Service providers before they sign up.

If there is a bad service offered by Payment Gateway, unfortunately, the customer will not

blame the PG provider but the Retailer. Once the customer loses trust on a website, the

credibility of the Retailer is at stake. Always remember in business Prevention is always

better than the cure.

Deal Sites and ChallengesPosted by Sunil GR on July 5, 2011 0 Comments

Deal Site buzz is in the market now. Everyone wants to start a deal site now. The success of

deal sites like snapdeal has inspired everyone to start a deal site and make money. There

are few challenges in operating a deal site.

Deals are specific to a region and locality. A deal in Delhi cannot be used by someone in

Chennai. Deals have to be offered only to those specific regions. To get these local deals,

the deal site must have a good marketing team which picks up deals in the local market.

Remember, these deals change on daily basis. So every day you should have new deals.

That accounts to 3o deals per region, and targeting 5 cities, would be 150 deals in a month.

If we do not get new local deals, customers will stop coming back to the site.

To generate revenue from the deal sites, the deal site has to drive traffic to his site and also

get sales out of them. That means decent budget has to be allocated for the promotion

activities of the website. Proper SEO and cross promotions from various channels are a must

to drive traffic. Typically the cost of each sale would range from Rs. 50 to 500. So to cover

all the promotional, marketing and operational cost, it has to come from the sales which

have to be in great volumes.

Apart from this, the deals offered are generally Service based and the service levels given

are not up to the mark. For example, some time back I wanted to taste how the deal site

works. I got a deal for a famous restaurant for dinner. I and my wife went to avail the

service. To my surprise, the kind of service that was offered was pathetic. We were treated

like we have come to eat free food. We were made to wait for an hour before we were

shown our seats. Obviously I had to tear the coupon and avail service as a normal customer

to avoid any more embarrassment.

The point to be noted is, the service providers who are getting listed are strategically

positioning themselves in deal sites to increase footfalls to their physical stores. Once a

customer comes from a deal site, they have to give service in such a way that they become

their regular loyal customers. This visionary is obviously not passed to the operation level.

The next level of management is not carrying this visionary in mind and not putting to

practice. All these activities contribute to the success of the concept of deal sites. I think

every level has to be properly educated if a new concept is introduced in the roadmap of a

business, be it a deal site or any other concept.

Logistics and Technology ChallengesPosted by Sunil GR on June 30, 20110 Comments

As we discussed in the previous post about Logistics and its challenges in India, We shall

explore more and discuss the integration challenges for Logistics.

In General, if two systems have to communicate with each other they have to come on a

common platform to integrate. It’s just like two people talking in different languages. If they

have to understand each other they need a translator. So for any integration between two

systems, we should get them to a common platform, convert their data into a common data,

interchange them on the platform and convert them back to their original data format and

send it back to their respective system.

The first challenge would be a common platform and converters of data formats. The next

would be the connectivity. During the interchange of data, if the connection is lost, the

whole integration collapses. Generally the interchange is a schedules task. So monitoring

the connectivity is a huge task.  To address this issue, generally the data is exported to an

excel sheet and put up at a place where the other system grabs the data.

Coming to the integration of logistics,whatever system we have will be integrated with the

Logistics system and every second, it interacts with the system and Logistics company. The

interaction is mainly to get the cost of the each gram and this dynamically calculates the

cost of the shipping and adds to the cost of the product. But due to the above issues, this is

not possible. And India is still not geared up to the micro weight cost structure.

If the integrated system is robust and the Internet connectivity is high, real time integration

is a possibility. Given the infrastructure and the service levels of the software vendors, the

logistics integration is a distant dream in India.

Logistics and Its Challenges in Indian eCommercePosted by Sunil GR on June 29, 201110 Comments

Any eCommerce venture stands on four major pillars to be successful. Website, Logistics,

Payment Gateway and Promotions.  Logistics can make or break an eCommerce business.

Why is Logistics in India a challenge? Let’s explore.

eCommerce is a hit only for certain categories . They could be Books, Fashion Jewellery,

Electronics (size matters), Handicrafts, and Apparels. The Logistics for any other category is

a huge challenge. The reasons can be many like

Size – The size of the product could be a big constraint for shipping. The value of a consumer

electronic good like a fridge takes huge space. Ideally the logistics provider generally

calculates price based on weight and the volume metrics that the good occupies. Both are a

huge challenge because the shipping cost increases. For a manufacturer who is shipping it

to retailer, this is not an issue, because he makes a bulk delivery. For a retailer who ships to

customers, the cost shoots up. This shipping cost, the retailer pushes on to the end user and

the overall cost of the product goes up. Remember, one of the reasons people buy online is

for the price. The retailer has to work out a way to handle this.

Insurance – High value products like Jewellery, Electronic goods (LCD’s etc) should have

transit insurance for the simple reason that if there be any damages. So who should be

bearing the insurance? If it’s the end user, the cost goes up. If it’s the vendor, then bye –

bye profits. One of the challenge is India is very unorganized in Logistics and we have no

control over fraud.

Reach – Reach to tier2 and urban areas are again a huge challenge. If it’s within the city,

deliver is easy, but if it extends to tier 2 and urban areas, then the delivery is again a

challenge because of Size and Insurance.

Cash on Deliver- Indians are still not ready to buy through bank transactions over Internet.

Cash on Delivery is a welcome solution for this. But there are challenges attached to this.

Firstly the customer can reject paying cash at the time of delivery. The return of the goods

to the vendor back is also a cost. Cash on Delivery is a challenge to the logistics service

provider in terms of warehouse, delivery and collection of the cash. COD comes as boon with

its own set of problems.

Apart from these, there are other issues like timely delivery, reach to every part of the

country, commitment of the service provider to deliver the product to the end user. These

look simple but these are the factors which give confidence to the end user on eCommerce.

If a vendor has muscle and deep pocket, all these issues are really not issues. But for most

of the SMB’s these really are pain areas.

Logistics play a major role in overall growth of eCommerce growth. It also accounts for

customer satisfaction.

How to Measure The Success of eCommercePosted by Sunil GR on June 28, 20110 Comments

Measuring the success of ecommerce depends purely on the conversion of prospects to

customers. The success directly relates to the number of sales happening on the

eCommerce Website.

Let’s drill down further into following bullet points to increase sales. The success of the

venture also depends on these points.

1. The aesthetics of the site

2. How well are you engaging the prospect on the website?

3. How are you luring him to make a decision to buy on the site?

4. How is the service level and customer satisfaction?

5. Finally the overall experience of the shopping on the web store.

Aesthetics of the site includes the design, product presentation, rich look and feel. We

should stress on these points because we do not have control over the consumer behavior

on Internet. The attention span of people is very low on the websites. Our task is to create

the Vow factor. Grabbing the attention and sustaining it is the game. Once done, we should

engage him with great product experience. Visual feast of the products in terms of deep

zoom, videos, forums and discussion groups, ratings. If we can make the prospect spend

more time on the site, we have won half the game.

Everyone expects a discount on the Internet, In fact the reason many people shop on

Internet is to get the best deals. Introducing offers, deals, loyalty cards, bundling products

and group deals can help customer to make a buying decision. This activity is very

important for the simple reason that customer keeps coming back to our site for more deals.

Remember, shopping online is no different from shopping offline, the concept is same.

After Sales service is the most important aspect in online shopping. The making or breaking

of relationship depends only on the Service that we offer. On time delivery, good packaging

and delivering the good ordered undamaged are good to give a great customer satisfaction.

This service alone makes customer to hang on to your store and even refer you to their

friends. Repeat business comes only when a customer has great service experience.

Summarizing all the above, the overall shopping experience is what matters most to the

customers. This shopping experience decides the success of your online Web store.

Customer is still god even on the internet, and the toughest part is we do not have any

control over him in influencing as there is no face to face interaction. The more

overwhelming shopping experience we give, the more successful the eCommerce venture is.

How Can Manufacturing Industries Benefit From The Ecommerce Boom in India?Posted by Sunil GR on July 29, 2011 0 Comments

Manufacturing Industry has separate concepts altogether when it comes to online Business.

The sales for Manufacturing are mostly Business to Business (B2B). These are generally

driven by dealers and distributors. Obviously the sales will happen in bulk quantities. If it’s

bulk sales then the factor of negotiation for price is natural. And the monies that are

involved in the case of manufacturing are either huge which virtually cannot be traded over

Internet or it happens on credit basis. So the scenario for ecommerce for manufacturing

Industry is different and a different approach has to be taken.

Firstly the concentration should be more on product presentation and features. Rich product

presentation has to be done for showcasing the products. This may include a detailed

feature list, the scope for customization, multiple product images, videos for branding,

customer testimonials. Here ecommerce means convincing the customer and generating

enquiries and leads through the website. Concepts of live chats, Toll Free numbers, Social

Media Marketing are great features to have.

Of course, for existing distributors and dealers, an ecommerce website can be developed

with upfront login (a concept where only valid users are allowed to enter the site). Since

their order history is available, the prices can be fixed after negotiating. And Distributors

and Dealers can place orders online. Payments can be settled offline.

Ecommerce for Manufacturing Industry should be more on rich product presentation, good

presales activity, customer support and lead generation. It will take some

Will Amazon Change The Fate of Indian EcommercePosted by Sunil GR on July 28, 2011 0 Comments

Ecommerce in India is promising a good growth. Venture Capitalists have already invested

over $50 million in seven companies, a 400 percent increase over the same period just last

year. An Article in “The Independent” says that Amazon is tempted to test the Indian Market

given the growth of ecommerce in India. Report also talks about Amazon hiring more than

200 employees, buying huge space for warehouse in Chennai and recruiting the big heads in

Indian Retail to head the Indian Operations. Analysts also have a view that Amazon may not

be there yet as it lost the early entrant advantage.

Amazon started its journey in ecommerce in 1995

and needless to say it has paved the way for ecommerce in the world. In India, it already has

hired more than 200 employees and building teams in Hyderabad, Bangalore and Chennai.

Another interesting development has been the buying of 80,000 sq ft by Amazon at SP

Infocity, promoted by Shapoorji Pallonji & Co Ltd, in Perungudi in Chennai. If we observe

carefully Ecommerce venture needs a website, traffic to the website, warehouse, logistics

and strong payment mechanism. Amazon has all of it. What it needs in India is the analytics

of the consumer behavior of the Indians. Every state is a country by itself and a detailed

analysis is needed to penetrate into the market. Amazon can hire the talent which can give

these insights. Data and analytics is something which it has to concentrate on. Acquiring the

local vendors and their products is the next task as it will make available these products to

its warehouses transcending the boundaries n. Now buying local products of various

countries will be easy as the shipping will be done by the local warehouses where the

products are available. Since Amazon is a known brand across the world, it’s not a herculean

task for acquiring customers for its Market place. Yes, if it acquires companies who already

have a huge client list, it will give Amazon a head start.

If the major concerns of getting the local intelligence, vendors and products are resolved,

getting a lion’s share of ecommerce in India is a cake walk for Amazon. What it should be

looking at are the shipping and logistics, payment mechanism as they are the major

concerns for the growth of ecommerce in India.

Logistics and Ecommerce ContinuedPosted by Sunil GR on July 27, 2011 2 Comments

In continuation to the previous posts on Logistics and ecommerce, here are some more

insights to logistics and its effect on ecommerce in India. Logistics is an integral part of

ecommerce not only in India but in the rest of the world as well. Logistics is a tremendous

operational cost component for an e-commerce business and could eventually dictate the

profitability of one venture against the other. In India, it’s about penetration. Most of the

logistics providers restrict themselves to Metros and Tier1 cities. But the real ecommerce

lies in the tier2 and Rural India. And it’s time for the logistics providers to penetrate into

these parts. The cost will be huge in terms of warehousing, transport, Insurance and of

course the taxation.

Cash on Delivery is a very important feature for Indian market simply for the reason that

India is still not geared up for the payment through Internet. COD is quite tricky to manage

and requires a lot of monitoring and control. Handling huge amounts of cash is a challenge

at every level from country office to courier. Also, Logistics providers have to make multiple

attempts as the end customers do not accept the shipments first time round which in turn

drives up costs. In case of any defect with the product, the end customer blames the courier

rather than the shipper.

Flipcart is coming up with its logistics arm, as it can’t wait on the logistics to make this giant

leap in a short span of time. Amazon has bought 80,000 Sq Feet of warehouse in Chennai as

it has a shipping port as well. I am waiting to see Amazon handle this concern. Will it partner

with a Logistics provider or will it start it’s on Logistics wing. It’s starting its operations in

India from next year; let’s see how it will change the ecommerce in India.

Reviews Ratings And DiscussionsPosted by Sunil GR on July 25, 2011 0 Comments

Eight out of ten people take a feedback from their peers, friends and relatives before they

purchase something. Even when they plan to watch a movie, the advice of someone who

has already watched has become a mandate now. People have become so impatient and

they don’t want to have a bad experience. If this is the case with a movie, imagine what

would be the influence if they are going to buy a product. Customers generally do not have

trust when they visit a shop for the first time. If the product that they are purchasing is of

high value, you can be my guest for their trust.

Why is this dependency?  It’s based on the trust, price, discounts and service. These play a

major role for purchases whether online or offline. And the influence of the peers and friends

is so high that customers gain complete trust for a product suggested by them. Check

Facebook if you have the slightest of the doubts. If a friend recommends about the product

on facebook, the chances of sale happening for that product is high. Reason, a friend who he

trusts referred. The point I am trying to arrive is Reviews, recommendations, Ratings and

Discussions have become very important to gain trust.

In India, trust plays a major part for sales online. 80% of the time a customer does a

thorough research before making a purchase online. They check various sites for reviews

and ratings for the product. For every product page, the retailer has to put the Reviews and

Rating options, where the customer should be able to write a review. Don’t worry if you get

a bad review, if you get one, follow up with him, find out the exact problem and make him a

happy customer. He will come back and write a good review. Genuine discussions also have

to be enabled on the website. As a Customer Support, you will get a good feedback on the

products and services of your company. This is a great way to reach out to your customers

and solve their queries. This makes your services transparent and his not only increases the

trust, but also has a positive viral marketing for your products and services.

Why Should You Target Facebook and Twitter For Ecommerce?Posted by Sunil GR on July 21, 2011 0 Comments

There are about 250 million users for Facebook, 14 million for Twitter and about 100 million

every month watch videos on youtube.

When I presented these facts to one of my prospective client, he says, they are all people

who absorb content over internet. How are they relevant to ecommerce? This raised a very

good point in my mind as to how relevant is this data for ecommerce. When I thought about

it, I could look at the data in two ways. Firstly, Internet is a new world altogether, though

facebook, twitter and youtube majorly contribute to content. But if we look at it in other way,

if a Retailer can use this traffic on these portals and present the content about their

company, products and promotions, they can diver the traffic to their ecommerce webstore.

After they come to the webstores, they can be made loyal customers to the store. The point

I am trying to communicate is, the Retailer should grab the opportunities to use these

famous social networking portals to brand their products and generate leads to their

webstores. Internet is a huge market and the potential is unknown.

Secondly, with the kind of traffic generated to these

sites, it’s obvious that Facebook, Twitter is looking at ecommerce ventures. Facebook is

coming up with applications where Wesbtores can showcase their products and make sales.

For now, payments are not encouraged through facebook but, Fan pages,  virtual valet and

diverting the traffic for sales are possible for facebook which itself is a great leap in

ecommerce. Twitter, the micro blogging site is also thinking ways to enable ecommerce.

How is still suspense. Youtube is a great platform to host videos about the products,

customer experiences, advertisements and many more. The videos also can be integrated to

the webstore and increase the rich product experience on web.

However hard we ignore, Facebook, Twitter and Youtube are integral part of ecommerce.

The Retailer has to use these resources effectively, drive traffic, generate leads and get

sales.

How Important Is Live Chat in Indian eCommerce Webstores?Posted by Sunil GR on July 19, 2011 0 Comments

Last Sunday I went shopping and I had this experience at a shop which quickly reminded me

of how important it is to have a personal touch. I went to this handy crafts shop and there

was no one to show me the products or explain them. I mean there was no one in the shop

to address to any of my needs. I left the shop and wouldn’t come back to the shop again.

I was wondering about websites that have poor product presentation, unorganized layouts,

poor categorization, and cumbersome check out process. What will happen to the customers

who come to these websites for shopping. Needless to say, they will the conversion will be

very poor for these sites. Apart from revamping the website, having a live chat integrated is

a great option with which lots of these issues can be handled.

With Live chat application, customer will have a

great shopping experience. Whenever he needs help, instead of wandering around on the

website, he can directly start interacting with the vendor. Simple concepts like searching the

products, asking for more information, negotiation can be easily handled with chat option.

Vendors also can make use of this application in a very effective way. With the availability of

analytics, the retailer can make out if the customer is hanging around a particular page for

more time like, if the customer is spending more time on product page or checkout page, a

pro active step can be taken by the retailer and chat can be initiated. With these simple

activities, the conversion rate is increased to amazing numbers.

Of course the Retailer has to keep certain things in mind like shopping online is a 24/7

activity. The availability of personnel for chat is a must. The Retailer who is chatting should

be knowledgeable to answer all the queries of the customer and the service levels of the

Retailer for chat should be exceptional. On the fly thinking and throwing offers and cross

selling and up selling also have to be done by the Retailers. The Online Shopping experience

is no different from the Offline shopping. Customer satisfaction and Service levels are still

the highest influencing factors for conversions. Live Chat application is a great option to give

the customer that personal shopping experience.

Milestones of Social NetworkingPosted by Sunil GR on July 18, 2011 0 Comments

Social Networking is not a new phenomenon; it’s there amongst people long before it got

famous on Internet. The need of networking is the main cause for people to form groups,

could be based on various factors. The only disadvantage with these  groups was that the

communication system was not robust like we have now with Internet. If we trace back on

the evolution of Social Networking on Internet, it started in 1980’s where users connected

over a slow internet connection to exchange Software. Needless to say, it was a costly affair

and was restricted to only a certain community.

As the World Wide Web grew in 1990’s Social Networking saw the real scalability through

web based applications. 1995 saw the revolution with classmates.com and match.com and

were phenomenal in their niche. Jonathan Abraham’s Freindster saw the real potential of

Social Networking in the early 2003. It was evaluated at $ 30 million by Google then.

Myspace was launched with the same features of Freindster.com and was sold to News

Corporation at $580 million Dollars. Myspace tapped the real potential of Social Networking.

This was the same time when Mark Zuckerberg, a Harward student created Facebook. He

concentrated on exclusivity and launched Facebook only to the likes of Harward and other

schools. The potential was huge, expanded to various high school and soon became the

most sought after Social Networking site. A simple concept of knowing more about the

people whom you know without hacking and exclusivity made facebook a real hit. It’s not an

exaggeration to say that Facebook has 250 million users now. Similar story goes with twitter

which conquered the world of micro blogging. What started as a fun with one liner soon

became the most famous micro blogging communication tool. Twitter got famous with

celebrities getting in touch with their fans with one liner. It has over 14 million users now.

Social Networking is the communication channel now. It replaced the email system. The

potential and reach of Social Networking is huge and unknown. Ecommerce with Social

Networking is a deadly combination for sales. With the kind of reach the social networking

has, if a proper positioning is done for ecommerce, the business growth is exponential. As

said before, the potential is unknown in Social Networking now.

Rural India–Internet ConnectivityPosted by Sunil GR on July 16, 2011 0 Comments

Facts say that there are 730 million mobile users in India. The penetration of Internet is very

low compared to this figure. The reasons for this low penetration are the Geometrical reach,

the setup cost for the Infrastructure. Unlike the mobile infrastructure where setting up a

tower is only cost that is involved. Because the medium is wireless, the infrastructure is

comparatively low. With 3G coming into picture, the internet connectivity in Rural India can

be solved to a large extent. Firstly the infrastructure cost is very low, secondly the mobile

devices that support 3G are manufactured in India and they are very affordable. A phone

with 3G, front and back cameras, and a dual SIM card is available for as less as Rs. 5000/-.

This helps the reach of Internet for Rural India.

In the villages of Gujarat, there is a community which records (the voice) the local news and

is delivered to the service provider over 3G. The service provider in turn delivers this

content to the media houses. This is the power of Indian market if the Internet is penetrated

deeper into Rural India. ECommerce will see exponential growth in India if the Internet

reaches the Rural India. That’s where the real market for eCommerce in India is !!!.

10 must have features for FMCG ecommercePosted by Sunil GR on July 15, 2011 0 Comments

One category that many vendors find it tough to crack is the FMCG or Grocery store. One

can hardly find handful of sites that operate in this sector. Indians are emotional buyers,

love bargaining and they are very loyal to their local vendors. But the factors like the traffic,

not finding time and the fast pace at which the life style is moving in the metros, many

vendors are looking at the ecommerce venture in this sector.

Delivery, Pricing and Sourcing are the three major factors that make or break this venture.

The retailers should concentrate on local markets only for the simple reason that the cost of

the products is low value and sometimes it equals the shipping cost. The pricing of the

products is also very important because the only way the customer can be lured is beating

on the price. To get the best price, sourcing of the products is the most important factor.

The retailer must find the source where he can get the rock bottom pricing.

Here are the 10 must have features to make the FMCG ecommerce venture successful.

1. Replicating the shopping experience:

If we observe closely the way shopping is done for Groceries, we generally have a list in

hand or mind on what to be purchased. Generally Indians buy the products for whole month

at a time. Retailers need to replicate this shopping experience. His shopping cart has to be

transparent and visible. Remember, the purchase is for multiple products and customer

should have the option of checking what’s already there in the cart. The search capability

should be very robust as people do not have enough patience to wait for shopping.

2. Variety:

The retailer should offer wide variety of products to the customers. Indians love shopping

and the more variety you have, the more feast to the eyes. Online shopping is no different

from regular shopping. The shopping behavior remains the same.

3. Cross Sell and Up sell:

This is a very important feature that a retailer should have in his website. Unlike the physical

store, Vendor doesn’t have the control of showcasing the products to the customer. If a

customer disagrees with a product, vendor can show a similar product and make the sale Or

Up sell related products to him. On the website, since the Retailer doesn’t have control over

the customer choice, cross sell and up sell is a great feature to have which dynamically

throws up similar products and engages the customer on the website. Remember, the longer

the customer spends time on the website, the faster he makes a purchase.

4. Offers and Promotions:

One of the driving factors for any customer to buy on the internet is the Offers and

promotions. Indians love bargaining. Since bargaining cannot be done over Website,

throwing Offers and promotions will satisfy that hunger. Innovative concepts like Catalogue

promotions, where two or more products are bundled pushed to the customer for a

purchase. Cart level promotions are also a great option to encourage customers to shop

over Internet.

5. Coupons:

Sodexo coupons and Ticket Restaurants are majorly used for grocery shopping. Retailer

should have a system that encourages and uses these coupons. Many Indians opt for these

coupons to save on taxes and aggressively use in Grocery stores. This definitely is a good to

have feature.

6. Free shipping:

Observe that the typical order value might not exceed Rs. 1000 to Rs. 5000. Customers

wouldn’t expect them to be charged with shipping costs. As discussed before Retailer needs

to have local shipping arrangement and free shipping is a great way to build customer

loyalty.

7. Managing Perishable Goods:

All the grocery stores have perishable goods like vegetables and fruits. If the retailer is

opting to sell these also online, he has to make sure that these products are pushed to the

customer and sold fast. Best way to do this is to have daily deals, where these perishable

goods can be sold by offering discounts and promotional offers.

8. Order History:

Groceries and FMCG goods are purchased regularly every month and generally these are

essential goods which are repeated every month. It makes life easy for the customers if they

have an option to save the order history in their “my account”. Month on month, the

customer can review back the order history and simply add or delete the master record and

place the order.

9. Refer the deal to friend:

Refer to a friend and earn points which can be burnt on the website again is a great way to

attract the customers. Firstly as per the social networking concepts, if a friend refers,

chances are high that his or her friend will visit the webstore and make purchase. It’s

because they trust the friends. Creating a virtual valet is very important, where people can

accumulate points in their loyalty card and keep burning them for more purchases and sales

on the website.

10. Daily Deals:

As discussed before, having daily deals option on the webstore is a great feature to have.

Firstly Groceries or FMCG has wide variety of products. It’s easy to choose the products for

daily deals and push products to the customers. The dead stocks which are no longer

moving are the products that can be pushed to the customers as daily deals. This is a great

way to increase the sales by generating greed in customers mind. In India everyone loves

bargaining, discount and promotions. Retailer has to use the concepts aggressively to target

this mindset.

Logistics – Cash On DeliveryPosted by Sunil GR on July 12, 2011 0 Comments

 

Indian customers are not comfortable to buy online, ticketing is an exception. The doubts

that arise while purchasing online are, what will be the quality of the product delivered? Will

I get the same product that I have seen on the website? How safe is the online transaction

and my credit card information on the internet?

These are some of the doubts that always keep haunting the customers in India. We are in a

country where unless we touch, feel and bargain, we wouldn’t dare purchasing the products.

Customer has to be double sure about the quality of the product, the minute details that go

into the product like the type of the fabric, the stitch etc.

A customer

from Chennai placed an order for a DVD player on a famous electronics site and when it was

delivered, it wasn’t starting up. Needless to say he had all the pains one can think of to get

it replaced. One customer ordered for a kurti, only to find it torn on delivery.  Clearly the

website should say what it offers, how it is delivered and what the quality policy that they

have is.

Cash on Delivery is an excellent option to tackle some of these situations. Firstly the

customer has the freedom on not to use his credit card information on the site if he is not

comfortable with it. Secondly the customer has the power to negotiate on the quality of the

product that is getting delivered. Since the payment is not done upfront, the retailer makes

sure that the quality is maintained. The customer can check the product and if he is satisfied

only, he can make the payment. This simple power shift makes a lot of difference to the

retailer since there is a cost incurred on the retailer if the product is not taken (a) The return

courier charge, b) the warehouse charges). Cash on Delivery is a great option to get the

retailer’s attitude right in setting high standards in maintaining the quality of the product

and services.

My Experiences With Customers–Ecommerce Ventures–Part 2Posted by Sunil GR on July 11, 2011 0 Comments

 

My friends and I decided to go on a long drive over a weekend, and we decided Mysore was

a perfect destiny. On high spirits we dashed off to Mysore and unfortunately we met with an

accident. The windshield was completely broken, making it impossible for us to drive further.

We were about 100 miles from Hyderabad. This is a typical situation where we could not find

a service center, and even if we found one, there was no guarantee that we could get a

windshield there. These and many more are the kinds of situation where a ecommerce

venture can try and make business .The service is simple. Login into the website, chose the

model of the windshield and leave your details there. In 10 minutes you will get a call from

the service provider confirming the order and the team comes to your place, fits the wind

shield and collects the cost.

Of course there are some challenges like; the services are restricted to only in certain areas.

The service level has to be sharp and prompt. Customers availing these services are those

who are in emergencies like the situation we discussed before but the value additions that

could be given by the vendors to the customers are many.

Firstly, providing the services in terms of the fitting the windshield, which will take away the

frustrations of the customer and gives him immense satisfaction. Secondly, the pricing. It’s a

known truth to every one that the profits involved in spares of automobile are huge. The

vendor can cut the cost and sell the windshield. What more can a customer, who is

desperate to change the windshield ask for?

This could be a good ecommerce business venture, with automobile industry growing

exponentially in India with pathetic infrastructure in terms of roads. With 3G penetration

picking up, a lighter version of the mobile website will do wonders for this business. And yes,

the retailer needs to think of partnering the local vendors for sales and servicing of the

automobile spares to make this service available in and around all the major tier 1 and 2

cities.

Mobile Commerce in India – IdeasPosted by Sunil GR on July 9, 2011 1 Comment

eBay acquired Zong ( mobile commerce service provider) for $ 240 million.

The idea is simple. Customer selects a product on website and leaves his phone number

there. SMS is sent to him. Customer confirms the order by replying back. The product is

delivered to the customer. The bill is added to the monthly phone bill. The service provider

collects the bill and pays the vendor.

Sounds very interesting. This will be a good hit in the developed countries where the

telecom sector is organized. Let’s talk about the context in India. This solution looks very

exciting because India is a country where mobile phone usage is higher than the Internet

connectivity. It has its own challenges.

Firstly, there is a situation here. As discussed before, the order is placed on the website,

which means that the order placement has to be done through internet, which in turns leads

to the internet penetrations issue. Let’s say we ignore this for a while. Indian mobile services

have certain set of issues like; India doesn’t have a system like SSN (Social Security

Number) where every service that is availed by the citizen of the country is associated with

this number. If there is any fraud or mischief done, the customer can easily be tracked.  In

India changing mobile numbers and service providers is very easy. There is no proper

system that takes care of this. There is always a threat that the customer can purchase the

product and change the mobile number and walk away without paying for the product.

To address this particular issue, we need to have a system that obliges customer not to

change the number and continue using the services.  How about using Social Networking

concepts. Interesting, Let’s say this service will be offered to corporate employees where

they have a common corporate mobile usage plan. The employee can buy the product and

since the mobile number is associated with the company he is working for, chances are

minimal that he does any mischief. There is a security for the mobile service provider and

vendor.

Let’s extend this to family and friends. In this case, the mobile service provider can give an

option to form a group which will include their family and friends. The customer will have a

peer pressure in doing any mischief because indirectly he is also involving his friends and

family and he shies away from these mischievous activities. Social Networking is a huge hit

only because of this feature. If we can use and replicate this in mobile ecommerce, it can be

a huge hit.

Of course, customers who fall into the category of absconding the payment could be 20% to

30%. There are still 70% of the mobile users in India which is a huge number. Finally

converting the prepaid customers to post paid services or making the calling cards or

recharge coupons available in higher denominations, the delivery and implementation are

all big challenges that need to be taken care of.  If these are addressed, Mobile commerce

will be a huge success in India because in this country, mobile phone usage is higher than

the Internet connectivity.

eCommerce Trends in India–1995Posted by Sunil GR on July 8, 2011 0 Comments

We shall dig in to the past and look into the major developments that have helped in

evolution of eCommerce in India. We shall also analyze major events that took place in

eCommerce. This will give us a deep understanding on how eCommerce evolved.

India has seen major developments in eCommerce from the year 1995. Activities in

eCommerce have happened prior to that also, like ICICI Infotech has taken a major step in

automation of their back end processes. Many education courses on eCommerce have also

started. 1995 saw a major change with Thawte entering into business. It provided services

for encryption of data on the web. Their main focus was internet security for eCommerce.

Thawte is the first company to produce a full-security encrypted ecommerce web server that

was commercially available outside the United States. This cleared lot of issues that were

haunting retailers and other service providers in terms of security of data interchange over

internet.Thawte brought to the world the public key infrastructure, which is the basis for all

encrypted and authenticated Internet transactions. This was a major leap in eCommerce in

India.

Another major development that happened this year, which would affect the whole

eCommerce not only in India, but the rest of the world, was the birth of Amazon. Amazon

started the business in 1995 with only books as their products. Little did they know then that

they would become the Gods of eCommerce. We shall discuss in detail about Amazon and

its success in the coming posts.

Next biggest development that took place in 1995 was “Hotmail” which was founded by

Sabeer Bhatia, This was acquired by Microsoft later. This is a revolutionary development in

India. India was introduced to email system with this venture. This slowly paved way to the

internet and its penetration in India. The concept of email caught the attention of many a

people which would later change the whole communication approach and system. In total,

1995 had major milestones which would slowly set trends in Web security, Internet

penetration and attitude of Indians towards Internet.

 

Ecommerce – Lets Improve Services – Part 2Posted by Sunil GR on July 7, 2011 0 Comments

Continuing the previous post on improving the services for eCommerce, here are some more

ideas which would build confidence to the customers in India on eCommerce business.

From the Webstore point of view, a lot of service can be offered by the retailer which will

build tremendous confidence to the end user. Infrastructure is growing rapidly in India.

Penetration of internet, though a challenge, is taking huge leaps. The concentration is more

on tier 2 and urban areas. Ecommerce is a boon to the retailers in the tier 2 and urban areas

as they have greater reach to the customers and the buyers have exposure to varied goods,

which otherwise is not possible.

Some of the services that we can offer over webstore are

a)      Reviews and ratings and discussion.

The retailers should give opportunities for the end users to write reviews and discuss about

the product and services on the webstore, this activity gives lot of confidence to the other

buyers.

b)      Videos

Its always good to showcase videos of your products to give that touch and feel of the

product to the customers. These videos will give them a detail rich product experience.

c)       Live and Video chat

Having a chat application on the webstore is a great idea where customers can start

chatting directly with the retailers. This will give them a window to ask all the queries and

make a decision. Video chat is also a great option to integrate and use.

d)      Toll Free

Having a Toll free number is a great option. This actually increases the brand value and

builds lot of confidence in customer.

e)      After Sales Service

Once the sale is done, the retailer should take the initiatives in contacting the customer and

asking their feedback. This not only gives a great after sales experience to the customer, but

helps in building that loyalty from the customer.

f)       Promotions and offers

Retailer should have proper promotions and offers to the customer after the sale is done.

Retailer should lure the customer to hang on to the webstore even after the shopping is

done. The promotions should also be realistic and appealing. Throwing offers like a lucky

draw for a Harley Davidson will not work. The promotions should be realistic.

Apart from these, simple gestures will leave a great impact on the customer, like a simple

hand written thank you note will do wonders in building customer loyalty.

 

My Experiences With Customers – Ecommerce Ventures – Part 1Posted by Sunil GR on July 6, 2011 0 Comments

Today I met a jeweler who wants to set up an online ecommerce store. By profession, I

handle Business Development for a ecommerce solution in India. We had an exciting

discussion and here are couple of interesting observations. Firstly, kudos to the retailer for

deciding to come online. I particularly appreciate this customer because he is from the old

city and has a very small shop, but is in the business for the last 125 years.

For Jewellery, the major emphasis is on the aesthetics of the site. Unlike the other industry,

a rich product presentation has to be done for the jewellery Business. Here, the retailer has

to showcase that rich touch and feel on the website. We are in a country where buying over

internet is still a scary activity. One can imagine how tough it is to convince the customers

to buy jewellery online.  Rich product presentation and concepts like making them visit the

physical store is what can be done to this industry. Awarding gift vouchers and asking them

to redeem at physical store could be a strategy.

What was interesting in the discussion was this. The Retailer says, I want to test the website

for couple of months and check if it really works. This thought made me wonder what kind of

vision do retailers have in setting up eCommerce store. eCommerce store is creating a

brand over internet where there are millions of potential buyers. It is like opening a new

sales channel. And the kind of vision the Retailer has over ecommerce venture is only a

couple of months? I think if someone is opening a ecommerce store, a proper business plan

has to be made and should make core goals to address why is he making an entry to the

Internet world. Once the retailer is sure about his road map for the expansion of his business

over Internet, then only he must make a decision to start the online store. Making a website

alone will not get business, lot of promotions has to be done to get traffic to the site and

great service has to be provided to retain the customers. eCommerce venture is an

expansion to your business and equal interest needs to be taken to develop it like the

physical store.

 

Deal Sites and ChallengesPosted by Sunil GR on July 5, 2011 0 Comments

Deal Site buzz is in the market now. Everyone wants to start a deal site now. The success of

deal sites like snapdeal has inspired everyone to start a deal site and make money. There

are few challenges in operating a deal site.

Deals are specific to a region and locality. A deal in Delhi cannot be used by someone in

Chennai. Deals have to be offered only to those specific regions. To get these local deals,

the deal site must have a good marketing team which picks up deals in the local market.

Remember, these deals change on daily basis. So every day you should have new deals.

That accounts to 3o deals per region, and targeting 5 cities, would be 150 deals in a month.

If we do not get new local deals, customers will stop coming back to the site.

To generate revenue from the deal sites, the deal site has to drive traffic to his site and also

get sales out of them. That means decent budget has to be allocated for the promotion

activities of the website. Proper SEO and cross promotions from various channels are a must

to drive traffic. Typically the cost of each sale would range from Rs. 50 to 500. So to cover

all the promotional, marketing and operational cost, it has to come from the sales which

have to be in great volumes.

Apart from this, the deals offered are generally Service based and the service levels given

are not up to the mark. For example, some time back I wanted to taste how the deal site

works. I got a deal for a famous restaurant for dinner. I and my wife went to avail the

service. To my surprise, the kind of service that was offered was pathetic. We were treated

like we have come to eat free food. We were made to wait for an hour before we were

shown our seats. Obviously I had to tear the coupon and avail service as a normal customer

to avoid any more embarrassment.

The point to be noted is, the service providers who are getting listed are strategically

positioning themselves in deal sites to increase footfalls to their physical stores. Once a

customer comes from a deal site, they have to give service in such a way that they become

their regular loyal customers. This visionary is obviously not passed to the operation level.

The next level of management is not carrying this visionary in mind and not putting to

practice. All these activities contribute to the success of the concept of deal sites. I think

every level has to be properly educated if a new concept is introduced in the roadmap of a

business, be it a deal site or any other concept.

eCommerce – Lets Improve Services – Part-1Posted by Sunil GR on July 4, 2011 0 Comments

The services rendered by vendors are one of the major factors of eCommerce success in

India. Indians are still not comfortable buying over internet mainly due to the reasons like

a)      They do not know if the quality of the product they ordered would be the same when it

reaches them.

b)      If there be any damage on delivery, they do not know if it will be replaced.

c)      They do not know who to contact for the services of the product.

Many opt to buy offline for these main reasons. The vendor selling over internet should

promise these things for building confidence to customers to purchase over internet.

Way back in 1920, there was an entrepreneur in Minneapolis who had an idea of

eCommerce. Too bad, there was no internet then. He traveled to various marketplaces then

and started selling new and used watches. But in every market place he sold, he also

partnered with the local watch service agents, and he paid them Annual cost. To the

customers whom he sold the watches, the service was free. Needless to say, his business

was a huge success then.

If the vendors who sell goods (which need servicing), have service points in major tier 1 and

tier 2 cities in India, customer can use the same and they don’t mind paying cost for these

services. But the overall customer satisfaction increases and activities like these help in

building confidence in customers to believe in ecommerce and start trading over Internet.

Let’s discuss some more ideas which help build trust in eCommerce in India in the coming

posts. In India, business is done over trust, Building their trust is the most important part for

success in eCommerce in India.

Do’s for a eCommerce StartupPosted by Sunil GR on July 1, 2011 0 Comments

Most of the time vendors who want to start the eCommerce venture fail to prioritize what

should go into their ecommerce venture. We will try to identify them and set the

expectations right to have a successful venture.

Firstly many vendors want to start the venture with all the features that they can think of.

The vendor should think of the basic features that have to go initially and then gradually

upgrade them. This again is industry specific and the vendor should have a complete

understanding on his domain and should have a proper Business plan before entering into

the venture. Making a eCommerce website will not generate sales. Lot of work has to go in

terms of making it successful.

Secondly, you should never depend on a service provider or a platform completely for your

ecommerce venture. Always analyze your core goals and focus on the basics. There will be

many good to have features which might lure you to use them, but you should always have

a check point on evaluating if they are addressing your core goals.

Thirdly never try doing all things at once. You should always make a detailed project plan in

eCommerce venture also and take a step by step process and gradually upgrade. In

eCommerce, it’s important to make a decent website first, generate traffic and get

customers on board, and finally making them loyal. Always focus on each step and grow,

Trying to do everything at once will ruin the whole idea of eCommerce venture.

Fourthly estimating the future is good, but predicting them and building your business

around it without proper evaluation is a huge risk. You should respect the changes and

should be ready to adapt them. But without proper evaluation, getting the features on board

and working around them is a risk best avoided.

Finally you should document the whole process and every action that you are performing in

the ecommerce venture. It not only gives you enough documentation to review every now

and then, it also is very useful to monitor if you are on track addressing your core Business

goals. Documentation also helps in preparing you for the scalability and estimating your

budgets in all departments and keeps you on track with your Business plan.

Top Five Best Practices For CheckoutPosted by Sunil GR on August 29, 20110 Comments

Perhaps the most important concept in an ecommerce website is the checkout. Many

Retailers perceive Checkout to be only a payment gateway but it’s more than that.

Checkout includes the journey of a customer right from choosing the product to its payment.

The whole checkout should be as lean as possible for a successful ecommerce venture. Here

are the five best practices for a checkout.

1. Navigation.

The navigation in the website should be very user friendly and lean. The categorization,

product pages, shopping cart pages, payment pages, information capturing pages should

not be lengthy. The whole navigation should be very easy and as short as possible.

Remember the more pages we have between the shopping cart and payment, the more

chances the delay of payment from the customer. So the Navigation must be simple, and

the customer should know where exactly they are and how many more steps are involved in

buying the product. Avoid surprises to the customer.

2. Shopping Cart.

Shopping cart is the most important for any ecommerce site. In fact if there is no shopping

cart, then it’s not ecommerce site. Shopping cart has to be very robust, and easy to use. The

customer should always know what products are there in the shopping cart and the total

value of the shopping cart. Catalogue promotion and Cart level promotion have to be

included. If the customer knows the products in the shopping cart and its value, checking

out to the payment page is very easy. Retailer must always inspire the customer to

checkout to the payment page before the customer abandons the cart

3. Abandoned Cart

If the customer abandons the cart, do not expire the session and clear his cart. Have an

abandoned cart feature and capture the information. Call the customer and ask for the

reasons. Let the cart value be stored in the customer’s account history. Next time when the

customers log in, they must have their cart with the products added. This will make their life

easy and the checkout can happen fast.

4.  Single page forms.

Avoid using multiple pages to capture information like, payment, address, etc. After the cart

is added with the product, the hurry should be more on payment. Let every information be

captured in a single page. This will make customers feel that they are not being bullied for

more information.

5. Change/update Cart facility.

Yes, give an option where the customer can delete or modify the existing cart. This feature

will avoid customer abandon carts. It also leaves good branding and a good feeling to the

customer. Repeat business is an opportunity with this feature.

Checkout contributes a lot to over all shopping experience for a customer. It is like having

those final touch ups to a great painting. Make it as user friendly and as lean as possible.

Refer a FriendPosted by Sunil GR on August 25, 20110 Comments

I saw someone quoting the statement “One satisfied customer is as good as having 4 new

prospects” and very true it is. If I post a statement that says “Support Anna Hazare “on my

facebook wall, chances are that 80% of my friends click yes on it. And though some of my

friends do not know what Anna is up to, they like the statement because I have posted. That

is the power of Social Networking. And to use this effectively in ecommerce, refer a friend is

a great concept.

The concept is simple. The Retailer uses this trust that’s there between friends. The retailer

can make an application which encourages the customers to refer the product or sale to

their friends. And for referring, the customer gets some reward points or virtual money. A

simple logic can we worked out where the more the number of friends it is referred to, the

more the points they can earn. This will be a great marketing tool for the simple reason that

if a friend refers a particular product or sale; chances are high that it will be taken by his

friend. People generally depend on the advice or suggestion before they make up their mind

for purchasing a service or product. Why, data says that 80% of the time people make

research over internet before they buy a product or service offline or online.

The effect will be more if the same is done by someone who the customer knows. If you

have observed, the sales boost up when a famous celebrity endorses a product because

people trust that celebrity. If anyone other than Anna Hazare takes up the hunger strike

against corruption, the response wouldn’t be so over whelming. It happened because people

trusted him. Similar logic can be applied and refer a friend concept can be worked out to

increase sales for the product and services.

How Does a Payment Gateway Work?Posted by Sunil GR on August 24, 20110 Comments

A Payment Gateway is an application that facilitates transaction of purchases over internet.

It uses Internet as the communication medium for this activity to happen. Here is how it

works.

 

1. A Customer makes a purchase over internet with a credit or debit card.

2. The Internet browser uses Secure Socket layer and encrypts the information being

sent.

3. Website collects the information and sends it to the payment Gateway.

4. Payment Gateway in turn sends this information to the Card Associations ( VISA,

MASTER etc).

5. The Card association forwards the information to the bank that issued the card.

6. The Bank checks if there are sufficient funds in the card and sends an authorization

code to the Card association.

7. This code confirms to the payment processor to process if there are funds in the

card or decline if they are not with proper reasons.

8. The payment processor sends this authorization code to the payment Gateway.

9. Payment Gateway then sends the code to the Business to process or decline the

payment.

10. Finally the Business or website takes the action accordingly and sends receipts to

the customer.

This is how in a nutshell how a payment gateway works for any service provider, give and

take couple of points here and there. Though this process looks lengthy, it actually happens

in seconds.

Pre Order – Great feature to manage inventory.Posted by Sunil GR on August 22, 20110 Comments

I happened to meet this Retailer, who I must say is a very good planner. He is into

handicrafts business. We all know how tough it is to manage handicrafts business. Most of

the products are handmade and the manpower is available only in the rural areas. So the

retailer either has to set up his manufacturing unit in the rural part of the country or invite

the makers to a place where he sets up his business. The options are not feasible as in the

first case, he can’t set up offices at multiple locations in India, and in the second case, it’s

too costly to maintain the man power inviting them from all parts of the country.

This Retailer found out a third way, it’s called the Pre Order concept. In the ecommerce

website, he enabled an option called pre order, where the customer will not have stock

available, but gives an option to the customer where they can place the order and pay the

money. The retailer in turn places the order on the local manufacturer in the rural areas.

They make the product and send it to the customer. This simple yet powerful feature is

great hit for two reasons. Firstly, there is no need to maintain the warehouse. So purchasing

the products and warehousing them is not necessary. This saves a huge cost. Secondly this

feature gives the Retailer a chance to predict the orders in a month. With this intelligence he

can plan his activities and promotion. For example, it’s a great feature in books business

where it helps them predict what kind of orders will be required to fulfill for a particular book

or author.

For products which have limited shelf life and which needs to be manufactured by hand, Pre

order is a nice option .The Warehouse and manpower charges can be avoided and this

benefit can be given to the end user in terms of pricing.

Why Software as a Service (SaaS) model for a RetailerPosted by Sunil GR on August 20, 2011 0 Comments

My friend wanted to start an ecommerce store and he is into Shoe Business. Like any other

vendor he too outsourced the solution to a web designing company referred by someone

close to him. Everything went well, website went live. My friend was clever enough to get

the CMS system also in place so that the dependency on the web design company was

minimal.

Real issue started when he wanted to scale up. He wanted to include some more features to

his website, like integration of chat tools, logistics, Social Networking sites like facebook and

twitter. He had to fall back on the Web designing company. And they charged him a bomb

for all these activities. And there were Annual maintenance costs. Needless to say, his

budgets overshot. It went on for a while and he again wanted to get some more updates

done to his website. To his horror, he found out that the web designing company didn’t exist

anymore. Had he known about Software as a Service (SaaS) model, He would have saved

himself from these issues.

SaaS is a perfect model where it enables Retailer to focus on their core business areas and

technology be taken care by experts.  With SaaS the vendor can start business with no

infrastructure cost. The budgets can be predicted as all the SaaS platforms are pay as you

go model. Integrations with 3rd party tools, hardware, software, technology up gradations are

taken care by the SaaS service providers. There are no maintenance overheads any more.

The Retailer doesn’t need an IT staff to maintain his business. Only disadvantage with this

kind of model is that there is complete dependency on the SaaS service provider. Except for

that this model is a boon for all the Retailers who would want to invest low and start the

business immediately. As I said, let the experts handle technology and the Retailer

concentrate on his core business.

Innovation in Promotions for ApparelPosted by Sunil GR on August 19, 2011 0 Comments

Someone said Winners do things differently and it applies very well to the Businesses

especially in ecommerce ventures. Every ecommerce business has a check list which has to

be followed to become successful. But one becomes a pioneer only when he does something

out of the box. I have come across a couple of these ideas who thought differently and are

making a niche in the Apparel Industry.

Though this concept is very new to Indian market, but it slowly is catching up. This vendor

introduced the concept of renting the Apparel. It goes like this. Customer can choose the

product they want in two sizes. Dates have to be chosen for the delivery. Pick up dates also

have to be mentioned. Now the charges are based on the quality of the product, insurance

and delivery. The vendor delivers the product and also picks it up on the date specified. This

is very innovative business concept, but really has to catch up in Indian concept.

Secondly I have observed one more Vendor whose concept is similar to the one mentioned

above. What happens here is that Customer buys a product, but he is allowed to choose two

sizes of the product. When the delivery is done, customer can try both the products and

choose whichever suits them the best. This is an instant hit, because in the category of

Apparel, size does matter and everyone is unique in their own way.

The point to be noted is, Innovation in ecommerce business is not an out of the box activity.

Simple practices that happen in the physical store have to tactically be implemented in

online business as well. Always think in lines of what customer wants and surprisingly you

can see that Business grows in leaps and bounds and in the right direction.

Top Five Features Retailer Should Look At in a Payment GatewayPosted by Sunil GR on August 16, 2011 0 Comments

Payment Gateway is a service that enables a Retailer to accept credit card transactions

online. Needless to say this is the most important part of ecommerce solution.  In India,

customers took a lot of time to get convinced to use the plastic card to transact over

internet for the simple reason that they do not trust online transactions. Credit card fraud,

charge back problems, no proper customer service are some of the reasons. But ecommerce

in India has come a long way and customers are using the credit cards for their transactions

online. What should a Retailer look for in a Payment Gateway?

Credit card fraud/Charge Back policies.

Credit card or online fraud is the most important

feature that a Retailer should be looking at when choosing a Payment Gateway. People who

are not tech savvy are an easy target for hackers to get the credit card information. Phishing

attacks are the easiest way to get this done. The payment Gateway providers should have

stringent policies and techniques to secure the information of the card holders. Multi factor

authentication and other techniques should be used to secure the information during the

transaction. Let’s say a card is compromised and transaction happens on the website,

refunding the monies back to the customer is called the Charge back feature. Retailer has to

be thorough in terms of the policies that are in place for the Charge backs. The process, the

time taken to refund the money, the penalties involved and how much of this process is

transferred to the Retailer have to review before taking the Payment Gateway.

Lower Transaction Discount Rate

Payment Gateways earn their money for the services that they provide in three ways. First

would be the Non-refundable set up cost, which has no standard policy. This is charged

according to the pocket size of the customer. Secondly the TDR, the percentage charged for

every transaction on the website. Thirdly the Annual Maintenance cost. It’s always wise to

choose the payment gateway with low TDR. It’s obvious that lot of energies will be put to get

the customers on to the website and make them buy. So sharing as little percentage as

possible on each transaction to the service provider is what should be kept in mind when

signing up with them

Integration and interface

The integration of the Payment Gateway should be very easy and the interface should be

very comfortable. Not every Retailer is tech savvy and many get the solution developed by a

programmer. If there’s any problem on the integration, it’s very tough for the Retailer to fall

back on these programmers all the time.  Simple things that can be handled by a Retailer

should be put forth in such a way that it should be very easy for any layman to use it.

International Payments

A provision to accept international payments should be available with the Payment

Gateways. Ecommerce has paved way for reaching customers across the world. A payment

gateway in India should be able to accept payments of all or most of  the currencies in the

world. The process should be fool proof in terms of currency conversion and transfer of

funds across the banks and countries. Charge back for these kinds of scenarios is very tough

and the policies for the smooth transactions should be very sound.

Good Customer Services and high uptime.

One should have lot of patience these days when they contact the customer service of any

company in any industry. These patience levels are for being on hold for long minutes before

someone picks up the call and initiate the process. Check how the customer service is for

the payment gateways. There is a company in Hyderabad which has the policy that the

customer’s call has to be answered in 5 seconds. Policies like these actually increase the

trust of the services provided by the providers. The services of the payment gateway should

be always high. The Retailer cannot afford to lose business because of the down time of the

Payment Gateway Services. Retailer should thoroughly check the Service Level Agreements

of the Payment Gateway Service providers before they sign up.

If there is a bad service offered by Payment Gateway, unfortunately, the customer will not

blame the PG provider but the Retailer. Once the customer loses trust on a website, the

credibility of the Retailer is at stake. Always remember in business Prevention is always

better than the cure.

Five Best Practices for Offers and Promotions.Posted by Sunil GR on August 12, 2011 0 Comments

If it’s a sale on Internet, it is obviously perceived that there will be a discount on it. Call this

a boon or bane, but this is the perception of everyone who shops on Internet. Fortunately or

unfortunately, offers and promotions have become an integral part of ecommerce. If there is

no value proposition in terms of cost, chances are very less for a sale happening on the

website. 80% of the people, who purchase online of offline, definitely do a research on

internet and of this 60% people end up buying if there is a discount or promotion or an offer.

If you are doing an ecommerce business you have to be on your toes with innovative offers,

promotions and discounts. Here are 5 best practices one should follow to have successful

sales in ecommerce ventures.

1. Realistic Offers:

I have seen some banners that say, if you make a purchase of over 3500, you will be eligible

for a lucky draw for a Harley Davidson bike or a Mercedes Benz. Now how realistic is this

offer? Customers are not mindless to observe that these offers are useless. Let’s say even if

the vendor gives away promised gifts, maintenance itself is a huge issue. Offers should be in

such a way that they should be realistic and should be useful to the end users. Indians shop

a lot and they shop more if there are realistic and offers.

2. Up sell:

Up selling concept is a great feature to have on the website. On each purchase of the

product, other product can be up sold by throwing discounts on those purchases. Not only is

the vendor educating the customer that the customer needs those products, but the vendor

is also giving away these products at a discount. Surprisingly you will find that sales increase

a lot with features like these.

3. Cart Level Promotion:

This also is a very interesting feature where the customer is lured to increase his appetite

for buying based on the Cart value. As a vendor you can throw away discounts on the

products after the cart value increases to a certain level. This is a great feature to sell your

dead stock.

4. Discount Vouchers and Loyalty Cards:

Discount vouchers are a good feature through which an immediate sale can happen.

Frequently send discount or gift vouchers to your regular customers. Let them also sign up

for a loyalty card through which the customers can earn points or virtual money on each

purchase and they can burn these points on the next purchase either online or offline.

Retaining the customer is the most important thing in today’s ecommerce business. A loyal

customer can get you sales as equal to as four new customers’ every month.

5. Refer a Friend:

Using the concept of Social Networking and trust is a good way to get new customers to

your site and get more sales. Integrate the concept of refer a friend works well with any

community because of a  simple fact that people love referring something to their friends if

it has done good to them and an offer attached to it will be a treat for referring. Vendor can

introduce the concept of virtual money and integrating the website with Facebook or twitter

or the like is a must. Customer can refer to his friends on the social Networking Sites and

can earn virtual money. Vendor not only has many customers visiting his site, but also the

sales start going north.

Customer has to be very innovative in terms of these offers and promotions because

unfortunately anyone who is looking for a product online also looks for value addition in

terms of cost, offers and promotion.

Ecommerce – Lets Improve Services – Part 3Posted by Sunil GR on August 11, 2011 0 Comments

This one will be very short.  This is about one of my customers who wanted to start the

services for the citizens of India and he wants to use ecommerce to reach the customers.

This will not be general services of bill payments which you will find in every street of the

city in India. This is more to do with some of the services like Right to Information Act and

the like. Many citizens of India do know that this is a very powerful act where the

information from the government can be obtained for any department. What they do not

know is the process to be followed to get the information from the government. If someone

wants to use this Right, they have to fill an application form and take a Demand Draft of

certain amount and then submit it to the particular department. Because of this process,

many people do not avail this service.  Vendor wants to start an ecommerce site where the

end user will fill a form that are required and pay some money (includes the facilitation

charges). Vendors submit the file on behalf of the customer. The idea is very interesting

both in terms of social service and reachability to the common man. But the biggest

challenge will be to get the payment gateway for the transactions. Since the monies

involved are very meager, no particular categorization and chances of inviting legal

disputes, the chances of getting a payment gateway for these kinds of services are very

less. Though the idea is very promising, the roadblock kills the whole concept. If the

payment gateway is provided to these kinds of initiatives, common can be benefited a lot in

terms of getting right information. This will also pave way to the new services that are going

to change the future of India like the Lokpal Bill and others. Hope there is a solution in

ecommerce process which helps these initiatives’ which help the positive developments in

India.

Why Pharmaceuticals Cannot Use Ecommerce in IndiaPosted by Sunil GR on August 10, 2011 2 Comments

Did you ever try buying a medicine online? Chances are that you will never find a website

that sells pharmaceutical drugs online in India. Ever wondered what could be the reason to

this when the whole country is gaga about ecommerce and online sales.

Here are some of the reasons why you will not find any online store for drugs. Let’s suppose

someone bought a medicine online and for some reason that drug had side effects which

lead to a health problem. It could have lead him to death bed also. Here comes the

interesting part. Who is to be blamed for his health? The vendor will not take the blame

because he says; I have clearly mentioned the repercussions in terms and conditions. The

logistics company cannot be blamed because he doesn’t check what’s in the packet. His job

is to deliver the product. The customer cannot be blamed because he says since it’s

available I bought it. So RBI has clearly defined in its rules that drugs should not be sold over

internet. For this same reason, payment gateways will not be provided to the vendors.

Similarly logistics will not be provided to these vendors as well. Same concepts apply to

Ayurvedic medicines and health supplements. A prescription is mandatory for these

products, and though you have one, Vendors are still not allowed to sell drugs of any sort

online.

However, surgical equipments, and non drug goods can be sold online. Industry has to wait

for the government to come up with a fool proof system to sell drugs online. Pharmaceutical

is a very profitable business but somehow for some reason Government of India prioritized

health to money to its citizens’ when it comes to online Business.

Mobile Digital Downloads – The Untapped MarketPosted by Sunil GR on August 8, 2011 0 Comments

I had been to my hometown which is in the rural parts of India. I visited this place after 5

years and lot of things have changed or rather upgraded. Everyone had fancy mobiles with

all the features one can imagine. Smart phones, 3G, Internet are very common here.  What

interested me is the new industry that has evolved exponentially. That’s the digital

downloads.

Pay 100 bucks and you can have 1 GB of songs

downloaded to your mobile. Pay 150 and your mobile will be filled with movies, wall papers

and ringtones. This is an amazing industry which has not made its mark with ecommerce

yet. Of course the collection of data is unorthodox and most of it is pirated. And the data is

transferred to the mobiles through data card or memory cards. Here is a market which can

go online and make huge profits. Mobile service providers’ do not make money through the

call tariff but through the value added services like ringtones, sing tones, wall papers etc. If

these services are provided over internet with ecommerce, the potential is huge. Indians

and mobiles go together now; you can hardly find someone without a mobile phone. The

market has already crossed 730 million and its counting. And the interest lies in value added

services than the tariffs. But rural India, which consumes huge data is not net savvy, blame

it on infrastructure. With 3G making its way aggressively, this might e solved. Retailers can

tap this huge potential through ecommerce. But there are some roadblocks.

Indian customers are used to the concept of availing the service first and pay then. We are

not used to prepaid when services are concerned. That’s the reason why Cash on Delivery is

a huge hit in India. So customers always have a doubt whether they will get proper access

after the money is paid. Its easy for a user to go to the local vendor and get the downloads

done as it’s easy. That ease of use has to be replicated in the ecommerce sites. Education is

also a major factor as the large part of the users are not Net savvy and they have to depend

on someone who is good at this stuff. But if these are resolved which will eventually be, the

ROI involved is immense because the major part of the mobile users use Value added

services.

What Happens After The Ecommerce Bubble Bursts in India?Posted by Sunil GR on August 6, 2011 0 Comments

We have discussed in the previous posts how the valuation is happening for ecommerce in

India. Many B2C companies are getting huge funding. The valuation is happening more on

the Industry’s expectations. Even the companies who are making losses are inviting huge

funding, it’s because the VC’s are making huge expectations on the future of ecommerce in

India. Data clearly shows that shift in attitude of people towards online purchases. With Cash

on delivery in picture, the potential growth in ecommerce in India is immense. And with

these funding, Investors are slowly creating a bubble which might burst in a year or two.

Here is a hypothetical situation after the bubble is burst.

Once the bubble bursts, there will be only some select ecommerce sites which will survive

and do business. Every industry will be ruled by one or more pioneers like FlipKart may be

the pioneer in books. Similarly we will see leaders in Electronics, Apparels, Handicrafts, and

Shoe etc. And most of these leaders will be the market places which will survive and rule the

business. What happen to the rest of the Retail crowd. They might have three options, firstly

they will forget the ecommerce business and stick to the traditional physical store business,

Secondly they will have their own portal and keep struggling to have their share in the

market. Thirdly they will approach these market places that are market leaders and list their

products with them and make money.

Most likely it’s the third scenario which I predict will happen in India. So the ecommerce

companies are more likely to invest huge investments now and spend a lot on making the

Industry ready by educating the customers, marketing and promotions of their portals and

creating a brand of their portals. Though we see crazy investments in ecommerce

businesses now, it’s only to brand themselves as the pioneers in that industry. Because once

the bubble bursts and the market is even, that’s when the real ecommerce will start paying

the profits back in India.

Is The Hype Created For Ecommerce in India Worth It?Posted by Sunil GR on August 4, 2011 0 Comments

Ecommerce in India is no doubt growing exponentially. But the real question is about the

hype created. In the last 4 months, the valuation for ecommerce websites went crazily high.

FlipKart which is the pioneer in books in India is valued at One billion dollars (Rs. 4500

crores). If we observe FlipKart is a loss making company in the top line revenues. If it’s

valued at One billion, which means that at a later point of time this should be sold at atleast

3 million Dollars. And who will buy it at that whopping price. This is happening with every

ecommerce website. The valuation is getting done by any private equity firm, though they

are making losses, which in turn is raising many eyebrows in the Stock Market resulting in

more valuation, stock prices increase and at the end that will be at lose, needless to say the

investor.

No doubt the opportunity is huge, with the online debit card usage alone jumping to 70%

more in a year, but the hype that is created with the private firms with the valuation is

creating a herd attitude in the investors. Ecommerce has a long way to go. Infrastructure

has to improve, end users have to be educated, payment mechanisms have to changes and

adapt to Indian environment, Logistics have to improve and finally all the so called biggies in

the ecommerce Industry have to play an active role in developing these. Creating hype will

do nothing but create one more bubble which might lead to one more economic crisis for

ecommerce Industry in India. Let the herd attitude be dumped and real valuation happen.

Top Reasons for Ecommerce Growth in IndiaPosted by Sunil GR on August 1, 2011 1 Comment

India is passing through an exponential growth phase in ecommerce in India. What everyone

thought would happen after 2 years is happening now in India. All the credit goes to few

players in India who have invested lot of time, money and patience in India and helped this

growth. Many thoughts have gone into the activity of educating the customer about

ecommerce and yes, many players have done business by booking losses to gain the trust.

Flipcart has bagged a funding of 150 million dollars and is being valuated at more that 1

billion now. The venture stared by two ex employees of Amazon made this possible. It is not

an exaggeration to say that they have a team of their own for delivery to gain the trust of

the employees. Similarly Snapdeal has revolutionized the daily deal market and the

marketing and advertizing efforts taken by them are commendable which helped the

concept of ecommerce in everyone’s mind. Martjack which is into B2B market has put lot of

efforts in terms of education the vendors on ecommerce and making them open their

webstores with their SaaS based model.

Having talked about the contribution of all the players of ecommerce in educating the

vendors and end users, there are some more aspects which have to take a giant leap to

drive the ecommerce great heights. Logistics, Payment mechanism are two factors which

have to steer ecommerce. Government intervention on the taxation helps these industries to

grow up to the expectations. The logistics providers also have to walk that extra mile and

set up warehouses, penetrate into the Rural and tier 2 and 3 cities. The real market lies here

in Rural India. As per the payment mechanisms are considered, Cash on Delivery is taking

care of the fear of transaction of payment over Internet of course with some issues.

Government, Banks and Logistic providers have to think innovative ways in clearing away

this fear from the minds of the customers. India is huge potential for ecommerce and with

these concerns addressed and educated properly in the minds of the customers, the growth

anticipated is exponential.

Amazon Kindle Fire and its Influence on EcommercePosted by Sunil GR on September 30, 20110 Comments

I was reading an article on Amazon Fire which is the hot news in the Market. Yes, Amazon is

coming with the new version of Kindle called FIRE.

How is it different from the rest of the iPAD category, well it is promising the fastest

browsing experience with its browser called Silk. How does it achieve that?. It will use EC2

cloud farm. Here is how it works. All the information that is browsed by the Fire user will be

pre-cached on Amazon EC2. Every website they visit, every advertisement they look at.

After some time, EC2 will have all the information which a user frequently browses. After

that every time the user requests for information, it will be pulled from the EC2 and it uses

Android as its backend. Sounds very interesting except for the fact that the privacy of the

user is totally lost.

Well how does that affect ecommerce? The potential for ecommerce with Amazon Kindle

Fire is immense. Imagine a user who is a frequent buyer on internet. Every time he visits

some site and buys a product, the information is recorded with Fire. Now Amazon has this

huge analytics which is a dream for every retailer. It will have all the information about the

competitor, their offers, strategies, their product mix and match. And on top of that it has

the most powerful information, the customer data like the buying pattern, the demographics

of the customer, the products they are interested in, the type of offers that the customer

falls for. The buying pattern of the Geography from where the customer hails. Imagine with

this kind of analytics what can Amazon do to the whole market. It can literally rule the whole

ecommerce industry. It can play around with the customers with the supplier base that it

has. It can make them loyal customers for the rest of their lives. It can monopolize the

ecommerce industry. All this if it uses the analytics properly.

I am waiting on how Amazon is going to strategize to push Fire into the market. It’s already

attracting customers with the price. Positioned at $199, I am sure it will penetrate into the

market pretty fast. The game starts when the data get accumulated at the Amazon server

farms and when it starts using the real analytics of the end users. I am in love with this

strategy, can’t wait to hear more of these innovations.

Will Amazon do what Flipkart is doing to India?Posted by Sunil GR on September 29, 20110 Comments

Yes, India is moving in the right direction now in terms of ecommerce. In the last couple of

months many companies have got good funding for ecommerce ventures. And I am still

wondering why Amazon is quiet?  How is it planning it’s entry in India? I perceive two options

here. Either it will acquire an existing ecommerce player or buy a stake and wait till the

market matures.

What interests me in either of the scenarios is the influence of Amazon. I am not an expert

in these acquisitions but here are my predictions which can make or break ecommerce in

India with the involvement of Amazon. Let’s say Amazon acquires few companies to cover

up the late entry and get the Indian market analysis. Amazon actions from then on will

greatly influence the market. India is still picking up in terms of Internet penetration and

usage, logistics and payment Gateways. If Amazon decides to sit back and watch letting the

existing players steer the market, the pace at which the growth is happening in India might

increase only by a meager or remain the same. It has to take a step further to boost the

ecommerce growth in India, only then it can reap the profits in future. This can happen only

if the visionary of Amazon comes into the picture to manage the Industry. It has the vision

and the muscle to boost the market.  Same issue persists if it buys a stake in a company and

in this case it cannot influence the company’s operation which in turn drives the market as it

has only a stake. Either ways, if it has to play a big brother’s role, it has to take considerable

risk to change the system to influence the market. Ecommerce in India is no doubt growing,

and if that growth is steered in the right direction and managed properly, the results start

showing up pretty soon.

FlipKart is driving that change in the market now. It has its own logistics system in place

now. Though it is bleeding with each order, it is changing the whole perception of

ecommerce to Indian users. It may or may not break even soon, but yes, it is making a

revolution in Indian ecommerce.

Music and eCommercePosted by Sunil GR on September 27, 20110 Comments

Retailers who sell products of music have a good market in India for online Business. Music

can be sold in two ways, physical products like CD’s etc or the digital products as

downloads. But in India the market for music lies with the mobile users who have the lion’s

share now. Have you ever wondered how the telecom service providers make money when

the tariff is so low? It’s from the value added services especially the music. They have

tapped in to this industry with ring tones, caller tunes and sing tones. Needless to say it is

monopolized with the telecom companies. For the retailers who are into the music business,

this is a highly untapped market.

This market is also open for those people in tier 2 and tier 3 cities where the music is not

easily available. Of course this is also directly related to the internet penetration to these

rural markets. To tap this market, a decent site with the option of downloading music is all it

takes. I happen to see one more kind of Business which my client started. It’s teaching

music online. This I found is interesting and amazing. People who want to learn music and

who cannot commute or living in other countries, teaching music online is a great option.

This is promoted by the regular ecommerce site where the user is properly educated and

payment can be accepted as subscription fee. The teaching is done using Skype. Now as an

ecommerce venture, cross selling and up selling of products also can be done with music

albums and musical instruments. This will be a one stop shop for all the music lovers who

want to learn, listen and practice music. This I see as an innovation in ideas to make most of

ecommerce in music industry.

Effective Analysis for Smart eCommerce.Posted by Sunil GR on September 22, 20110 Comments

We see every other day a new ecommerce website getting launched in the Industry and a

new service provider offering the ecommerce technology. It will not take long where there

would be thousand or lakhs of ecommerce websites in India. How will you differ from the

rest of the crowd? Why should a customer choose you over the competition? Here are some

of the analytical practices which will make you stand tall in crowd.

Track the changing customer needs.Gone are the days where you will offer what you have to

the customers. It’s the other way round now. Retailers have to understand the customer

needs and offer them what they need. This customization is very important to get loyal

customer base and get repeat customer Business. DELL successfully implemented this

solution. It lets customers choose what they want and it manufactures accordingly.

1. Use Social Networking and your website effectively to communicate with the

customers and understand what the need. Create a facebook fan page. Use polling

system and understand what customers like. Act accordingly. Using twitter to get

customer grievances and solving them is a great idea.

2. You have a huge data with you as sales that are happening on your website and on

the physical store. Use this data effectively and understand where the trends are

leading to in the Industry. This analysis helps you in introducing new products or

bundling the products and releasing new offers.

3. Using the data from your distributors’ suppliers about the sales that are happening

to them. This will give the retailer great input on the trends about the products

geographically and demographically.

4. Use loyalty card effectively and observe the buying patterns of the customer. Make

them feel that they are treated special by customizing offers for them on products

based on their buying patterns.

Customer is the centric point for all the sales. The products, sales promotions, offers have to

revolve around him. Retailers have all the data with them and they have to use this data

effectively for analyzing the trends and the needs of the customers. Offering customers what

they need will make the Retailer pioneer in the ecommerce for his/her industry.

How to Avoid Charge Backs?Posted by Sunil GR on September 14, 20110 Comments

So what are charge backs? Any credit/debit card transaction which is fraudulent and where

there is no mistake of the customer invites the charge back from the Retailer. Let’s say a

credit card is stolen, and the transaction happens, or the product is purchased and it’s out of

stock at the Retailer and the customer asks to return the money, situations like these invite

Charge backs where the retailer has to refund the money to the customer. This is bad for the

Retailer as there will be a fine levied on the Retailer for the charge back. If there are

frequent charge back situations, Banks might also black list these Retailers.

Here are some of the practices which will avoid the charge back situations.

1. Use CVV – The Code Value Verification is an important number that comes with the

Card. You can ask the customers to enter the cvv number for the transaction.

2. Use two factor authentications. A concept like Verified by VISA etc allows you to

have one more level of security by having a password. Unless you type this

password, the transactions will not happen. This multi level authentication is a huge

relief for Retailers to avoid Credit card frauds.

3. Always have a special focus on the purchases that are costly and which are paid for

quick delivery. Also concentrate and recheck on those products which are

expensive and can be resold. You can call these customers and authenticate them

when the purchase is happening. Customers will be more than happy of the

legitimacy of the transaction is checked if you feel it’s suspicious. It increases

customer loyalty.

These practices are not fool-proof and extensive. If implemented, they will reduce the

charge backs to an extent.

Discount Vouchers and CouponsPosted by Sunil GR on September 12, 20110 Comments

My friend made me register myself to a famous apparel webstore in India called Fashion and

you dot com. As soon as I joined, I got a gift voucher and he made me literally buy a shirt on

the portal. The reason why he pushed me so much was he got discount vouchers and

coupons for making me join and buy a product. Indians are crazy after discounts. I once saw

a lady making purchasing goods which she will not use just to get that gift hamper.

People buy on Internet for two reasons. Ease where there are no hassles of traffic, parking

and lot of time is saved. Secondly, people buy on Internet because the prices are low. The

second reason is cashed the most. There are couple of best practices that can lure the

customers to buy more on the website. The website has to keep the customer always

engaged with the discounts and offers. If a customer buys a product, with the product, the

Retailer can give a discount voucher for the next purchase. The timing of distributing the

vouchers is also very important. Festivals, holidays, occasions and start of the month could

be good criteria. The coupons also should be time based. Customers should never get a

feeling that the coupons are thrown away at customers. The brand image also should be

created in such a way that these discounts are to be valued. If the time on the voucher is

elapsed, the discounts should be called off. This gives customers a sense of respect to the

discounts that are offered to them. If the Retailer has a physical store, they can give

discounts which they can use in the physical store and increase footfalls and vice versa

where your loyal customers get engaged in the online shopping. Discount vouchers and

coupons is a great promotional concept to increase sales for the online Business. This also

gets you a loyal customer base to shop online on your store.

How to Make an Interactive Ecommerce WebsitePosted by Sunil GR on September 9, 20110 Comments

Imagine you are shopping in a handicrafts store. And you find no one to assist you. There

are numerous questions that are haunting you about the product, the price, the quality,

products to be suggested etc. If there is no one to assist you, chances are high that you will

abandon that shop in no time. Similar things happen in an online store as well. If there is no

proper information on the website or if there is no one to assist on the webstore, the

customers are bound to leave the website in no time. Here are some of the points to keep in

mind to make a successful interactive eCommerce website.

Chat Application

Chat application is one of the most important and useful options one can have on their

ecommerce store. This is like having someone on the ecommerce site for clarifying your

queries. The customer support team should also act pro actively in terms of giving support

and advice to the users on their purchase requirements.

Reviews, Ratings and Discussion Threads.

These are some of the most influential factors for any users to make a purchase decision.

Since the Reviews and Discussion threads are user generated content and views, they have

a lot of credibility for other users on the products and services of the webstore. Having these

features make the webstore very interactive .Do not delete a thread or comment which

speaks badly about your product or service, instead get back to them, serve them well and

let them write good about your services.

Click to call

How about having a toll free number on the website, in case you want to speak to someone

from the website? Very useful feature. This is the most comfortable way of interacting with

the Website to clear the queries. This is direct human touch.

Testimonials

It’s good to have someone speaking good about your products and services. If it’s a

customer, nothing like it. These testimonials play a very important role in building trust in

your products and services to other prospects. The testimonials can be audio and video also

now. Allow customers to upload audio and video files talking good about your company.

Make the Website as interactive as possible. The logic of shopping is same be it online or

offline. India still needs a human touch when they shop. Give them a chance with these

various features to interact to the store online. Get the human touch to the portal and boost

your sales.

Five Best Practices for Vendor ManagementPosted by Sunil GR on September 7, 20110 Comments

Market places and drop shipping models are the next big ventures in India now. They do not

have a retail shop of their own. They act as a liaison between the suppliers and customers.

They partner with vendors or suppliers. They list the products on their websites. Once a

purchase is made on the website, the supplier or vendor is intimated to fulfill the order. Let’s

see some of the best practices one should look at to make this model successful

1. Competitive Prices

What is the benefit for a Marketplace or Drop Shipper in this model? They spend a lot of

money on marketing and promotion of their website. They make money on the commission

that they get on each product. So every Drop shipper looks for the best and competitive

prices. Care should be taken in terms of the quality of the products as well.

2. On time delivery

Delivery is the most important aspect in this kind of model. If there is any delay in delivery,

the end user asks the drop shipper or the Marketplace owner about the delivery, not the

supplier. In most of the cases the Supplier is not even exposed to the end user. The total

branding is at stake with the on time delivery. Strict Service Level Agreements have to be

signed to maintain the delivery and service levels.

3. Learn their Business.

Every supplier wants to make profits. If the vendor is listing his products in a Market place,

that means he is looking for larger sales. If the Market place keeps pressing for more

discounts and competitive prices, obviously the quality will go down. Understanding their

business needs and keeping these things in mind, the Drop shipper has to balance the costs

and quality of the product.

4. Payment Mechanism.

Generally the total control of the payment will be in the hands of the drop shipper or the

Market place owner. Two general practices are a) When the product is purchased;

automatically the money is transferred to the supplier or vendor after the percentage cut. b)

The payment is received by the Website, and the order is transferred to the vendor. The

money will be transferred to the vendor only after the delivery is done to the end user. This

will also ensure the on time delivery.

5. Customer Service

Who is going to handle the customer grievances if there is any delay in the product or if a

wrong or damaged product is delivered? Will it be the Market place or the supplier? This is

the most important part because customer service is the most important aspect in

ecommerce business. As a practice this will be handled by the Drop shipper or Market place

owner.

The greed of the Marketplace or Drop shipper is the volume of sales that will happen on the

site and discounted prices that they get from the vendors. The interest of the supplier is the

sales that will happen without any marketing activities from their side. It should be a perfect

marriage between these two for a successful marriage.

Why Should the Retailers Focus on their Core Business, not Technology.Posted by Sunil GR on September 2, 2011 0 Comments

I was watching this movie called 300, where a huge army wages a war on 300 Spartans. The

King denies anyone joining their army who are not professional fighters. How striking is that

simple point. Let the technology be handled by the experts, and let the Retailer concentrate

on their core Business. Retailer is good at strategizing on branding, drive more sales and

grow the business. If they enter into a new field of technology and if they do not have

enough expertise to handle it, it will spoil the entire business.

There are some questions that rise in the minds of the Retailers. Who should they depend on

for technology? To what extent can they trust them? How can I invest in something on which

I do not have knowledge? Retailer has to make a research on the service providers of this

technology like the ecommerce solution providers and outsource the work to them. Legal

documentation is available to secure your information and data. Let these companies who

are experts in technology handle the ecommerce and technology part. The rest of the core

business and strategies are taken care by the Retailer. There is a new model called Software

as a Service model which is making a huge impact in the market. Here the technology,

infrastructure, support, maintenance will be taken care by the Service provider and the

Retailer has to take pay them subscription fee for as long as they use it. In a nut shell, the

Retailer need not worry on the how to handle and manage technology and effect his core

business. It can be outsourced to technology providers or SaaS based service providers who

can handle this and Retailer can concentrate on his business.

Is Indian eCommerce Tablet ready?Posted by Sunil GR on October 19, 2011 0 Comments

Good news is that there are around 100 million broad band users as per the government

records. It will grow by 15% this year. By 2015, the internet users on mobile will surpass

broadband users inIndia. All these are positive signs and India has taken a sep further asking

the service providers to increase their reach in broadband services.

Every other day,India is watching more and more launches of tablet PC’s. Tablet PC’s are

made to fit into that market place which lies between a PDA and a laptop. Easy to carry,

targeting basic browsing needs. Almost all the major brands have launched their version of

Tablets. With the announcement of Akaash, the cost effective tablet by government of India,

the race has begun now on price and service. So what’s in it for ecommerce?

This is great news for a Retailer. With Tablets, the product showcasing becomes much better

which the mobile is not able to achieve, simply because of the size. With 7 inch size of the

screen, a proper estore can be made. Tablets though used for sales presentations, playing

games, reading books and multimedia, will sooner or later will pave way to next-gen

ecommerce. With the infrastructure developing at a rapid pace, it’s not an exaggeration to

say Tablet’s will have a greater market presence. This will in turn increase the ecommerce in

India.

Here is a classic example which a major ecommerce market place has put into practice. A

gentleman carries a Tablet and enters into a physical store. He takes a picture of the bar

code of that particular product which he wants to purchase and uploads it to the estore on

the Tablet. The estore quickly reviews and throws away three best competitive prices and

similar products, thus giving more options to the purchaser. This will be the power of Tablet

ecommerce, if used effectively.

Is India geared up to this change? Well, it will take sometime. The infrastructure has to grow;

Tablets have to penetrate into the market. And most important, Retailers have to be ready

with the Tablet applications. If all these are on par with market, Tablets will soon rule the

Indian eCommerce market.

Magento Go.. eBay’s MovePosted by Sunil GR on October 13, 2011 0 Comments

When I heard that eBay acquired Magento, I thought it was one of the bad moves by the

giant. I was proved completely wrong. eBay had good presence across the world and the

acquisition was majorly to get the supplier base of Magento. But eBay had a greater vision.

Just when I thought eBay was losing its foot hold, the introduction of Magento Go is a

surprise move to grab the lions share. Magento Go is the new version of Magento which is

offered on Software as a Service model. SaaS platform and cloud computing is the next big

revolution in IT now. (you can read my earlier post about SaaS and its benefits). eBay is in

the race now to capture the market, not only with the marketplace model that it has, but

also by providing technology to the Retailers across the world. Entering into B2B market has

its own advantages. It has a ready to use supplier base, a transaction commission on each

order which uses Magento Go, have greater analysis on shopping habits, ecommerce trends

across the world.

I also had a chance to go through the features offered by Magento and I must say it has

covered all the features and functionalities one can think of. With the acquisition of Paypal

and partnering with all the famous payment gateways in each country, it has built a nice eco

system for a retailer for ecommerce. But every ecommerce solution provider’s success lies

in the implementation face. Open source Magento was not preferred for the simple reason

that the implementation of the solution was a pain for any retailer. If Magento cracks the

implementation part of the solution, it can quickly become the industry leader for B2B

market.

With its presence in every country, localizing the solution is the most important part.

Ecommerce in each country is different. To get the local analysis, it should also acquire local

players for implementing the store front. This will be the easiest way to get the local feel

and gain the trust of the local market.  This is a welcome and refreshing move by eBay with

Magento Go. If the solution is tuned to the local markets and implementation is properly

taken care of, it can quickly become the pioneer for B2B market.

A Game Called Valuation.Posted by Sunil GR on October 5, 2011 2 Comments

This is a story of an ecommerce entrepreneur about his venture in India. His name is Rahul.

He worked for an ecommerce company in USA and after gaining all the knowledge, he

decided to come back to India and start an ecommerce venture here. He quickly studied the

market here and with all the good analysis, he started his webstore with handicrafts. He got

in touch with good suppliers. He slowly started getting good sales. Mind you he was very

good at marketing and promotions.

With a nice Business plan, he approached Investors and got an Angel Investor who decided

to fund his idea. With this fund, he expanded his product line to other Industries like

Garments and Electronic devices. He gave these products at a throw away prices. Invested

huge amount in marketing and promotion activities of the website. He used SEO and Social

Networking platforms. Radio, TV and all other communication channels. His webstore quickly

became very famous. Investors started approaching him to invest in his company. Auditing

companies started valuating the company. Smart guy he was, he started showing huge cash

flows and transactions on the website. With throw away prices for products this was

possible. Since India has seen a late entry into ecommerce with huge potential, all the

venture capitalists started pouncing on him, not to miss the bus of ecommerce. The gap

between Demand and Supply became huge. Crazy valuation happened.

Finally Rahul agreed on the Investment and a famous venture capitalist bought a good stake

in the company. With this investment, the company had no bounds now. It started becoming

a monopoly in the Industry. It either acquired medium players or killed the small players

with price. Everything was going well. The transactions were huge. It was bleeding with

every order, but it captured the lion’s share of the market. Now the Venture capitalist

started worrying how he has to break even. He realized this will not happen in the near

future. So they decided to go public and raise money.

They went public and raised huge money. With the kind of branding that went into this

company in these couple of years, the investors got a handsome share and Rahul also got

money which he never dreamt. What next, the company which no longer can sell the

products at the same prices, started hiking the prices of the product. Customers started

losing interest in the Webstore. The cash flow started decreasing, the price of the share

dropped.  People who invested in this company pressed the panic button. They sold the

shares in the market at whatever the price that they could get. Finally the company

collapsed.

Rahul got his share. Venture Capitalist got his share. People lost trust in ecommerce. Small

and medium business players lost hope in ecommerce. They have to re build the trust in the

people about ecommerce now.

This is exactly what is happening in India now.  These are the possible reasons for the crazy

valuations, crazy funding by VC’s and crazy discounts on the webstore.

Ecommerce in India towards ConsolidationPosted by Sunil GR on November 21, 2011 0 Comments

I know this is too early to comment on the future of ecommerce in India and arrive at a

consolidation because the way things are turning in this Industry; it’s hard to predict the

future. But lets predict anyways and estimate how the Industry will take a shape. Rapid

changes, exponential growth, crazy investments are making this Industry hot, but where is

this all leading to. At least the Industry experts say that eCommerce in India is here to stay.

India is largely populated with the middle class families; fortunately this lot is contributing a

lot to the commerce now. This is one of the reasons of the boom in ecommerce here.

Industry predicts a business of more than 48000 crores in 2011. And there’s an increase of

30% year on year, very promising. How will the Industry take shape from here? With this

kind of promising boom, every retailer who has a physical store would want to open an

ecommerce store. Industry will be flooded with many ecommerce stores. But ecommerce

store is as good as a physical store and equal care; budgets have to be spent on the same.

Needless to say, only a few will survive and make a mark. Similarly, in last couple of years

alone, We have seen many entrepreneurs testing their luck in this Industry. We are now able

to see wide range of products at a best cost, which would have not been possible otherwise.

These entrepreneurs are promising a great Business plan and invite Investors and Venture

Capitalists. It’s not an exaggeration to say that Investors pumped in more that 100 million in

the first quarter this year. So we will see more and more stores from these young

Entrepreneurs.

If we observe, for the next couple of years, we will see a flood of ecommerce stores. We will

see the bubble grow heavy. The big players will start acquiring the smaller ones either for

their products or strategies. Some market places will kill the new entrants as they have a

greater muscle of money and infrastructure. Investors who have invested in the startup

companies will want their investment back; remember the bubble is growing at a very rapid

pace. We will see many more acquisitions. Finally we would see only a couple of players,

who are pioneers in the Industry surviving the bubble. Companies who are targeting on a

long term game will definitely survive as long as their strategies are innovative. This is just a

brief of what might happen to this Industry, we shall discuss more consolidation options in

the coming posts.

Saas and Data Backup.Posted by Sunil GR on November 19, 2011 0 Comments

Software as a Service model is the talk of the industry now. Everyone wants to get into this

model because of its benefits like technology, cost, and implementation issues. This model

will get the customer to kick start the business in days, compared to the traditional model

which might take months. But there is one big question which everyone has in their mind –

How about the data, IS it secure.

Generally, SaaS providers provide you the best security in terms of data because it has to be

hosted on the cloud. This data is vulnerable to theft as it’s hosted on shared clouds. Of

course, the security will be highest and will be promised like the one you see in a Bond

movie. And various trusted organization will certify the security of the cloud. The next

question is the data backup. Every SaaS provider will promise the integrity of data and its

availability round the clock. Even if there’s any down time, it will not be more that 48 hours.

What happens if there’s any mishap where the data is lost. This is the question that haunts

many vendors who want to take up the SaaS services. Ideally, SaaS providers use redundant

servers and multiple locations to take care of the data backup. It will also allow the vendors

to take back up of their data in specified formats.

It’s always safe to take back up of the important data by the vendors. So what is important,

how do u define importance of the data. For a Retailer, data about customers, the orders

and finance could be important. If we have the raw data, analytics can be mined whenever

vendor wants. It’s very important to define what is critical and take a back up of this data.

Though SaaS providers promise you the highest level of security and integrity, it’s always

better to play safe. After all prevention is better than cure.

Call Center for eCommercePosted by Sunil GR on November 18, 2011 0 Comments

I wanted to gift some chocolates to my friend on the eve of Diwali. I logged on to a famous

website and started ordering. Within few seconds I found that the website crashed. It could

be due to the huge traffic that the web portal invited for the festive season. But I liked the

way that famous portal handled this crisis. They immediately launched a new page with the

Toll free numbers. People could call the numbers and place the orders. A call center was

born.

With the boom of ecommerce in India scaling to new heights, the webstores are reaping the

benefits now with an average of 2000 orders per day. And like everyone, the concentration

is huge on operations. The warehouse management is taken care of, delivery is made on

time, and the whole operations are made spic and span. What about a customer support

center. What happens if the webstore crashes, if the customer wants to check the status of

the order, if he wants to cancel the order etc. A customer support center has become

mandatory now. People want to call up the call center and enquire the status of their order,

voice their grievances about the services. Firstly this builds a lot of trust to the customer

about the company, because if something happens, they know whom to call and get it

resolved instead of voicing this out in public forums, which is bad for the vendor.

This is a great opportunity for the call center service providers, because not all the vendors

can afford to have a call center which involves lot of cost in infrastructure and talent. The

best option would be to get this outsourced to the service providers. Just when everyone

though Call centers were dying, here is a new opportunity to make business out of the

Customer support services. It’s amazing to see how one Industry makes every other industry

which is directly and indirectly associated, makes them grow at a rapid pace. It’s time Call

centers acquire knowledge in ecommerce (there’s still shortage of knowledge in the market)

and set up the processes. This time ecommerce in India is here to stay for good.

Value Propositions – A PromisePosted by Sunil GR on December 17, 20110 Comments

In the earlier post we discussed about the consolidation of Ecommerce in India in brief. The

consolidation will happen and the bubble will burst leaving few successful players to grab

the market share. How to survive the bubble and make the most of consolidation is the next

big question in every etailer’s mind now.

I observed that every company has a great business plan but lack in the implementation of

the vision that they propose. Like, there’s a Restaurant which I visited and their motto was

“great service”. And to my surprise, the service was pathetic. Either the vision was not

communicated to every team in the organization, or it was just for the name sake. The Value

proposition that an organization offers to the customer is the most important factor which

makes a brand for itself. If the value proposition of a company is to deliver the ordered

product in 3 working days, come what may it has to be followed. Unlike in other industries,

it’s the warranty or a Service Level Agreement, which generally supports the value

proposition that they promise. In Ecommerce Industry, it’s an activity that needs a lot of

time, money and efforts to get the brand image for a particular Value Proposition that an

organization offers. Undamaged goods, on time delivery, after sales service, great customer

support, and excellent charge back facilities are some factors that make a trustworthy

Ecommerce Business. Come what may, whatever you promise as a Business must be

fulfilled at any cost. Only then the Organization will be remembered for that one particular

service you are master at, and loyalty increases multifold with sales.

Value propositions also have to be framed keeping the Market Segmentation in mind. If you

are targeting mass markets, design the promises accordingly. If the services are high level

and are targeted only to High net worth clients, make sure you target that particular market

and communicate the same. Market Segmentation and Value Proposition go hand in hand

and never fail in delivering the second to the first. You will make a great brand of the Value

Proposition for that Market Segment and survive in the long term Business of Ecommerce in

India.

Quick Facts of Ecommerce in India as on Dec 2011Posted by Sunil GR on December 1, 20110 Comments

80 million Internet users.

10 million are transacting Online.

Over 730 million people have mobile phones in India.

21 million smartphones in 2010, which will grow to 100 million by 2015.

10 million 3G connections within 6 months of launch, almost equal to the base of

wire line broadband connections.

28% of travel gets booked online; 117 million transactions on IRCTC alone.

47% of the classifieds business is online.

7% of bank users in India access their accounts online.

25% of IT returns were filed online in 2010-11.

Over $24billion will be transacted online by 2015.

Close to 50% of music revenues in India comes from mobile downloads

Ecommerce And IPOPosted by Sunil GR on January 30, 2012 0 Comments

The news we have all been waiting is out. Facebook is going for IPO. This move will inspire

many ecommerce players in India to do the same. AS we discussed before, consolidation will

happen sooner or later in the ecommerce Industry in India. The growth rate in India in

ecommerce is moving at a pace of 30% year on year. Crazy valuations are happening and

VC’s are funding the companies not to miss on the opportunity. Heavy bet is on the middle

class families who are spending a lot online now. Sooner or later, the funders will start

asking for their money back. Companies will bleed a lot in the consolidation period to get the

maximum market share. We are already finding huge discounts on each and every store.

Companies like flipkart, letsbuy are throwing away discounts for the command over market

share. Amazon’s entry is a big threat to these players, as it is very famous in bleeding and

killing the small players and new entrants. The only option that will be left for the existing

players will be to go for IPO, raise money for consolidation. This year, we will see many more

companies getting aquired, raising IPO’s and getting many more funds from the Investors.

The Industry is slowly moving towards consolidation. The game is all about market

capitalizaztion now.

FDI in Retail – A Boon.Posted by Sunil GR on January 14, 2012 0 Comments

I was on a holiday and I made the most of it by making a road trip in to the villages. I also

had an opportunity to visit the Wal-Mart Setup atGunturand interviewed some farmers there

about the effect of Wal-Mart in their lives. I got very interesting views.

Firstly, one has to blame the infrastructure inIndia. After having a good crop in hand,

farmers find it tough to get the crop to the towns or trade points and sell them, for the

simple reason that the roads are too bad. They do not have cold storages at affordable

prices where they can store the crop. So automatically the middle men come into picture

that promise them a good price for their crop and transport the crop. Needless to say that

these middle men never pay the agreed price to the farmers, and hence the farmer is

always at loss. Now Wal-Mart has changed the game. It agrees to buy the crop at a certain

price and pick up the crop from the place all by itself. They take one more step and advise

them on which crop to be planted in that particular area ( they have a team that does this

research). Since they buy the crop in bulk, the price advantage is passed on to the end user.

The farmer is happy, the end user is happy as well.

Now there is one more argument that I hear a lot, what about the regular kirana stores, they

would close down etc. I don’t buy that argument, Government never allows one company to

monopolize the Industry. Coming to the small stores, they will never lose the market share

as long as their price is competitive and service is on par with the standards and I am sure

there is a lot of scope to improve in both the areas. I advise to avoid the middlemen, buy the

crops or goods directly from the source, get the best prices and share them with the end

users. The retailer will have his market share. With FDI coming into Retail sector, there will

be lot of advantages for a lot of people and lot of other Industries. Why cry over it if there

are so many advantages. The disadvantages will be there, but I think they are negligible.

Webcam and eCommerce.Posted by Sunil GR on January 2, 2012 2 Comments

With Augmented reality and 3 D technology a long way to go, I see that the webcam is doing

a decent job to compensate them to an extent. Yes, now there are some webstores which

offer this kind of shopping. One portal uses webcam to take a photo and then that photo is

adjusted to a size. Then it lets the user try jewellery on the photo taking the shopping as

close as possible to Augmented Reality.

There are some more sites in the beauty industry which use webcam effectively. They

interact with a skin specialist on the other side. The study the skin type with the webcam

and the user needs to answer a questionnaire and based on the result, the specialist will

suggest the beauty and skin care products available on the portal. This simple concept is

very catchy and is an instant hit with the beauty conscious customers.

Apart from that Webcams are effectively used as an interaction tool for chatting with the

customer support executive and get that human touch. Well, the retailer has to come up

with various simple yet effective techniques to stand out from the rest of the crowd. Using

Webcams effectively is one way.

How to increase Sales For Ecommerce Stores?Posted by Sunil GR on February 27, 2012 0 Comments

Well, we have been arguing, convincing and hoping that ecommerce will penetrate well in to

the minds of the Indian customers; here are some other ways through which we can still

target these customers and get sales on the ecommerce stores.

Here are some of the best practices which can help boost the ecommerce sales in India

1) Advertise in local News papers

If you are running an offer, target the tier2 and tier 3 cities and advertise in their local

newspapers and in their local language.  There will be a greater reach to the customers

about your products and offers.

2) Call Center

Its good to have a call center where people can order online. Remember, these areas have

money, but don’t have access to the Internet. This gives them an option to call the customer

care center, enquire about the product and also place order through phone. This not only

gives them confidence that it’s a fake concept, but also lets them order the product and rely

on the call center for any future queries.

3) Cash on Delivery

Most of these people might not have credit cards and debit cards, and even if they have,

they will not expose these details. It’s better to use Cash on Delivery option to solve this

issue. A proper fraud investigation has to be done before approving the COD order.

4) Last mile Logistics

There are many last mile logistics available in the country now, who will deliver the products

to these urban and rural areas. They will also collect cash on your behalf.

There are some risks attached to these concepts, but until India is totally geared up with

infrastructure, one has to use various other options to reach them and create a brand image

in their minds. Remember to enjoy first entrants’ advantage.

Innovation in Ecommerce SalesPosted by Sunil GR on February 23, 2012 0 Comments

People were proved wrong when they said jeweler, diamonds, apparels cannot be sold online

in India. We have seen many ecommerce ventures doing great business selling these

categories online.

We still have that small tingly feeling to buy certain products online. It could be mostly

apparels, shoe, jeweler etc. Customers still want to touch and feel the products before

actually owning them. Product presentation after all doesn’t entirely replace this experience

online. How does one tackle this problem? There are some interesting suggestions that I

have. These online stores can have space rented at some famous stores in cities, where

they can showcase hot selling products. People can try these products and then order

online. This actually increases huge brand loyalty to the vendor, as he is tackling a major

problem of look and feel. With the growth of ecommerce in leaps and bounds, people will

slowly get comfortable as the Industry grows.

Reserve and pick up at store is also a nice to have option where people can book the

product and visit the store and pick up the products. Vendors can use their own shops or can

rent space in some of the famous shops across tier 1 and tier 2 cities. Vendors will also have

nice analytics on which products need look and feel as the time progresses. These are

generally to increase confidence and loyalty in the minds of the customers. With the rate at

which ecommerce is growing in India, these things will get comfortable with all kinds of

products.

Online Orders and Fraud InvestigationPosted by Sunil GR on February 20, 2012 0 Comments

Cash on Delivery is a welcome alternative to Indians who still fear to share their credit and

debit card details. Since the logistics are not as organized as they should be, it’s still a

challenge to investigate the fraudulent orders.

Let’s ponder and check what could be a fraudulent order. Generally every vendor or

payment gateway has to check if the order is genuine or not. The possibilities of an order

being fraudulent could be a stolen credit/debit card, ordering on COD for mischief, ordering

high value products on COD or Ordering too many products of the same SKU.

There can be many more reasons. Generally you should also have a department that does

fraud check on each order. Well, investigating each order is tedious if the daily transactions

are huge. I interviewed on gentleman who does fraud investigation and he says, it’s the gut

feeling. There is no yard stick or a check list which measures fraudulent orders. It’s the value

of order and the area from which the order is placed also comes into account when checking

for fraud. Some areas in India are known for their mischief on theft of credit/debit cards.

Why should you check anyways? If it’s from a stolen ca rd, the charge back is a huge issue,

which not only costs money to cancel the order and give the money back to the original card

owner, but also the reputation of the vendor is at stake. Secondly in the case of Cash on

Delivery, vendor doesn’t have total control of the transaction as the money is still with the

customer. So high value products are always at risk in COD, if the order is rejected, there’s a

cost for reverse logistics and Warehouse. So it’s always better to confirm the order when it’s

COD.

Again, there’s no checklist or a guideline sheet that checks the guarantee of the fraud of the

order. It is experience and gut feeling that goes in fraud investigation.

How to Get Rid of Dead Stock?Posted by Sunil GR on February 17, 2012 1 Comment

Over stocked product inventory is a huge problem for any retailer. It not only increases your

operation costs like warehouse but also drives you into severe depression if they don’t get

sold. So how does one get rid of them? The key is to get them sold, without making losses

and keeping the brand intact.

Here are some useful tips to solve this issue

1) Bundle the products:

Bundle two or more products and make an offer. Customers like to buy a product which is

more than one. Some innovation is required to make the offer juicy.

2) Loyalty Program:

If you already have a loyalty program for customers, make an offer to them. They not only

get good offer, but also can earn points on their card.

3) Discount Vouchers and Coupons:

Use discount vouchers and coupons aggressively to the long list of existing customer base

that you already have. Customers would also feel that they are remembered and rewarded

with vouchers.

4) Market Places:

You can also list your products on market places ebay, Amazon etc where you can get the

sale quickly. Only issue will be the cut throat margins that you have to manage with these

market places.

Remember, instead of spending huge on operations and warehouse, its better to get rid of

the dead stock and still make profits. Ecommerce stores are a nice way to get these done.

Innovation is the key here.

How To Save On Shipping/logistics Cost?Posted by Sunil GR on March 22, 20120 Comments

Many customers abandon shopping carts for various reasons and shipping cost is one of

them. When the customers feel that the shipping cost is high, they generally back off. If you

find your sales dipping on the site, you can check on your shipping costs first. Many vendors

ship the goods for free and that will eat away the profits. Here are some points where the

vendor can save on the shipping cost.

1. Using different ways of transport to ship the goods is a nice idea to save costs. For

example , if the destination distance is less, you can choose roadways or railways

instead of airways to ship the product. The cost for these ways of transport is

different and cuts your cost of shipping.

2. Sometimes you can also choose hybrid shipping mechanism. Using multiple ways

like Airways plus roadways also is a good option to save the cost.

3. Last mile delivery generally invites lot of cost. India being large geographically, its

tough to manage the last mile delivery. Partnering with local vendors and using

effective analysis will actually reduce this cost.

4. Packaging of the product is most important to reduce the shipping cost. Instead of

using the standard packaging, you can pack the product keeping the volume also

into consideration. Volumetric packaging also adds up to the cost. Depending on

which way of transport you use, pack the product accordingly and ship them.

5. Finally you can throw away discounts or use cart level promotions to let customer

buy some more products at the checkout. This will not only increase your sales, but

also will reduce shipping cost since they all will ship to the same destination.

India is still reaching there in terms of logistics and needless to say, reachability to every

nook and corner of the country is still a challenge. Effective innovation and analysis in

logistics and shipping will save great amount of monies to the vendors.

Handicrafts-Ecommerce and Challenges.Posted by Sunil GR on March 21, 20120 Comments

I recently visited a society in a village in Andhra Pradesh and had a chance to look at how

the handicrafts are manufactured, distributed. What I learnt from my visit was the micro

management which generally makes or breaks this Business.

The most difficult part is getting hold of the makers of these handicrafts. Procuring the raw

material, managing the consignment, wastage and finally maintaining the quality of the

product has to be micromanaged to the highest degree to maintain this Business. These are

generally set up in villages because of the availability of the raw material and skilled labor.

When the order is placed, it has to be manufactured maintaining the highest quality and

shipped to the end user. Since these are located in the interiors, shipping is more or less a

challenge. Being handmade, the packaging has to be of spic and span where damage is a

strict no. The returned product has not much value, part of the material can be reused

though.

Looking at this  business broadly, micro management  of the suppliers and products is

generally a huge challenge . Since India is rich in culture and the geography is broad, having

business centers at various places and managing them is a huge challenge. If one can crack

this and micro -manage efficiently, handicrafts is a huge business to reap profits from.

Why Shopping Carts are Abandoned?

Posted by Sunil GR on March 5, 20120 Comments

Ever wondered why there are no sales conversions though you are able to get traffic to the

website? People abandoning carts could be a reason. When you shop, and right at the point

of checking out if one drops the whole shopping basket, its called abandoning cart. So why

do people abandon carts? Here are some of the possible reasons.

1)      Not sure of the product they are buying.

2)      Shipping charge is more than what the buyer thought.

3)      Not many options for payment.

4)      No product comparison

5)      Total value of the cart exceeds the budget.

6)      Too much information to be filled for checking out.

7)      Too many pages to navigate for checking out.

8)      No https page for checkout.

We can capture all these details, thanks to the technology. Quick actions have to be taken to

turn these abandoned carts to successful sales. Always have a chat application where

customers can immediately chat with the executive and get the problem resolved. Call these

people who have abandoned carts and ask for the reasons. You can give options offline and

close the deal. Offer some discounts vouchers to lure them to continue the shopping.

Remember these are very effective customer feedback that you can get and implement

these and make the checkout as simple and lean as possible and convert leads to successful

sales on your webstore.

Top Reasons for Success of Ecommerce in IndiaPosted by Sunil GR on April 20, 20120 Comments

The other day someone was asking me about the prospects of Ecommerce in India, why I am

betting on this Industry, why not change the Industry. But I am betting huge on this Industry

for the following Industry.

The spending power of the middle class family has increased tremendously over

the last couple of years, Indian ecommerce lives and thrives on the middle class

sector. With the comfort levels increasing in spending online, this particular sector

is contributing to the total revenue of ecommerce in India. This sector is estimated

at 300 million and fast growing.

Partciipation of large players like Reliance, Big Bazaar has raised hopes in the

unorganized sector of the Retail Industry in India. With ecommerce, this is slowlt

moving into an organized sectore. Spending power of Indians is contributing a lot to

this Industry which is maturing fast.

Accessibilty and convenience are the factors which have paved a new way to the

urban and rural areas to shop online now. Tier 2 and Tier 3 cities are contributing a

lot to the online shopping domain. They have money, but they don’t have the

access to the branded and other products. This also opened a huge opportunity to

logistics companies to expand.

With the penetration of Broadband connection which is very aggressive across

India, the reachability of online shops has increased to every Indian now. With the

3g and 4g penetration which is estimated to surpass the Broadband connections is

also a huge bet for the increase of this domain.

This Industry is a win-win for both merchants and customers. Merchants have a chance to

open up a new sales channel which will be exposed to the entire world. Customers have

access to all the products that they can think of in their reach now. This time ecommerce is

here to stay.

How to Increase Stickiness on the Webstore?Posted by Sunil GR on April 16, 20120 Comments

The vendor can create a great webstore, do a lot of online marketing with SEO, Adwords and

social media marketing and drive traffic to the website. What next ? Converting these clicks

to sales. Yes, this is the one factor which doesn’t have a formula to implement. There are no

strict guidelines if followed gets sales to the website. What one must do is to innovate and

get the sales done on the website.

I visited a garment shop the other day and I observed how a smart sales man is positioning

the product, offering discount and converting a walk in to a customer. The sale guy is

observing the consumer behavior and then positioning the products and the sales pitch

accordingly. I was thinking if this can be replicated online. Firstly, we cannot get all the

information like the demographics of the customer, the consumer behavior, their buying

capacity. We can only get his navigation style, what products he is looking at and how long

is he spending time on each product page. Merchant has to capitalize on this information

and convert them to sale. One way is to make a great analytical Engine and throw product

and promotions based on the navigation style of the customer. This should take a lot of

data, mining and a robust analytical and logical engine which works at the back end. This

could invite a lot of technology and cost. The other way is to have a chat application and

with the analysis Engine, the merchant can proactively pop up and talk to customer and

guide them on the purchase. Well this is a work around solution for now, but having an

automated process for this activity is a great tool which can increase stickiness to the

webstore. Remember, the longer a customer spends on the website, the more likely he is to

make a purchase on the store.

Price Comparison EnginesPosted by Sunil GR on April 11, 20120 Comments

Price comparison Engines work where we use crawlers and get prices across various

marketplaces or webstores and make a comparison sheet on our webstore.

Revenue Model

The only revenue model that works here is through affiliates or adsense. Big brands like

flipkart, Infibeam has to partner with the webstore and list their prices here for the products

to compete the market. For that to happen, the website should be very famous inviting lot of

traffic. For this to happen the webstore should have branded websites listed. It’s a catch 22.

Website has to choose one path out of the two and bet on it. After all the efforts, the website

may not make huge money out of it because

 There are not many players from which the comparisons can be made. ( we hardly

have 10 good players          in the market)

 The market places or webstores are ready to spend huge money of adwords and

ppc’s to generate traffic. Tough to convince them unless the Price Comparison

website is very famous.

Eventually the price comparison Website has to offer more than just prices. It has to venture

in to two areas.

 It has to become a market place and become a proper Retailer to survive the

market. Apart from comparing prices from only a couple of players, it should

become a market place and start selling the products as well. Sign up with many

vendors and become a retailer and offer more on the webstore.

 Or since it has the technology, price comparison Engine can sell or lease this

technology to market places like Flipkart etc and make money out of it.

Apart from these, the webstore has to invest huge in terms of branding and marketing to

make it famous. This is the only way to get big customers on board.

Commitments and Customer SupportPosted by Sunil GR on April 3, 20120 Comments

I ordered a book from a famous webstore and I only got an email thanking me for placing an

order and my shipment will be done in 5 working days. Waited for more that 10 days and I

still did not hear from them. I called their customer support and I found that no one was

taking responsibility and my call was hopping from one manager to the other. Finally I found

out that what I ordered was a foreign edition and it will take at least 3 weeks to ship my

product. And I was informed about this only when I called their customer service

department.

Indian ecommerce is growing at a very fast pace; commitments and customer support are

very important to survive this growing Industry. Firstly commitments have to be very

realistic. Vendor should have an infrastructure set up in order to fulfill these commitments.

Customer support has to be on toes to reach out to customers to fulfill these commitments.

If there is any delay in fulfilling the order, it has to be informed to the customer immediately.

Every customer will be happy as long as he is informed on what is happening with his order.

In ecommerce, the sale happens without any human intervention. If there is any problem

that happens in the entire sales process or after sales, customer would like to speak to

someone who can solve their issue. Customer support comes in to picture here that should

take care of this experience. If a customer has to chase the support service, God help that

ecommerce company in long term.

Customer support is a very important department in ecommerce business now. This is one

department which will make u stand out in the crowd and kill your competition. Vendors

should invest in customer support with a call center, email support and help customers in

terms of their queries. Vendors should also be pro active and inform customers on the status

of the orders. This not only builds trust and confidence in the minds of the customers but

also give a great sales experience to the customers.

Amazon Wishlist WidgetPosted by Sunil GR on May 18, 2012 0 Comments

We have seen wishlists  in a website where the customers can add the products they wish to

buy at a later point of time. I came across a new widget from Amazon which has a new

concept of wishlist widget.  This is a plug in which asks you to choose the browser and install

there. Now best part of this widget is, when you are browsing product information on non

amazon sites, it throws up an option to add to wishlist and that product lands up in Amazon

wishlist.

This wish list can be shared with friends and family where they can gift them to the wishlist

holder. Amazing use of this wishlist is , Products can be listed from various sites and price

comparison can be done on Amazon.com. This way,the customer has a wishlist of all the

products from various webstores at one place , and also compare the prices on Amazon and

buy them. What more, you can simply search your friends wishlist by their email id. You can

view their wishlist and update your too. This widget helps create stickiness to the website

and increase sales. Amazon not only gets product information and prices from all the

webstores, but also has a loyal customer base with the wishlist who can compare and buy

products from Amazon. Wow, only the leader can get ideas like these.

Why Customers Abandon Purchases on Webstore?Posted by Sunil GR on May 15, 2012 0 Comments

We have heard of Shopping cart abandonment where customers abandon at the time of

payment. Now the analysis also brings up a new concept where the abandonment of the

purchase happens even before one gets into the shopping cart. This can be called Purchase

abandonment. Let us see what could be the reasons for these.

Generally Purchase abandonment happens when the customer is searching for the products.

If the keywords are not tagged properly, the customer will find it tough to locate the

product.

1) Not finding the product because the they are not tagged with proper keywords is a major

cause. Customers don’t have enough patience to search for a long time of the webstore.

Proper care has to be taken so that search engine is intelligent enough to fetch the relevant

product.

2) After finding the product, if there is no proper information, the chances are high that the

customer leaves the site and searches elsewhere. Product information with the features,

reviews, ratings etc are very important to engage the customer

3) Product comparison feature is very handy when the customer wants to compare with

more than one product. These features are must to engage the customer on the webstore.

The more the customer spends time on the webstore, the more likely that he will make a

purchase.

Checkout abandonment comes when the product is added to the cart, but because of the

last minute surprises, the customers may back out at the payment.

1) Shipping charges have to be mentioned and should be transparent to avoid any surprises.

Most of the customers back out only because the shipping charges are high

2) Insurance and other hidden costs which come as a surprise again also should not come as

a surprise to the customer. They need to be mentioned clearly so that customer has the

price clear in mind.

Overall use good analytics and make sure the customer is engaged properly with the

products at each stage of his shopping experience. More he spends time on the site with

proper information in hand, more likely the purchase happens on the website.

What not to do on Home Page?.Posted by Sunil GR on May 12, 2012 0 Comments

Homepage of a website is the only single window a merchant has to engage the customer to

spend more time on the website. Merchants tend to put everything on the homepage to

show the customer what they offer and end up making it complex. Here are some best

practices one should follow on what not to have on home page.

1)      Don’t make it crowded.

Don’t make the home page crowded by putting too many banners, flash files and images.

This not only makes the page crowded but also loads the page slow. Many http requests

from the homepage make it load slower. Remember, no one wants to wait for more than 2

seconds for the page to load.

2)      Gaudy banners

Its good to have banners, but making the banners too gaudy and colorful will drive away the

customer. Banners should be meaningful and should go with the overall theme of the

website.

3)      Annoying pop ups and sounds.

Avoid pop ups. Customers don’t want to get annoyed by the pop ups. It’s like someone

disturbing you with un necessary things when they are shopping. Strictly avoid sounds for

pop ups.

4)      Navigation style.

The navigation should not be complex on the home page. The category management has to

be very user-friendly. Customers should be able to find what they want in less than 5

seconds on the home page. Complex navigation only lures customers to go away from the

site.

Home page is the most important page which leaves positive impression on the customers

mind. It should be rich and designed in such a way the customers feel comfortable shopping

on the site. Brand image has to be reflected on the site and customers should feel that they

are on a trustworthy site.

“Click to Call” for NegotiationPosted by Sunil GR on June 11, 2012 0 Comments

So how does one get a chance to negotiate on ecommerce webstore? There are some

industries which need some kind of negotiation before a purchase is made. Bulk purchases

of products definitely need some negotiation. How does one achieve this?

“Click to call” feature comes handy in these cases. Here, instead of the “Buy now” button,

“Click to call” button is placed. The customers’ phone number is entered there in the text

box. Once clicked, automatically a two way call is placed between the buyer and the vendor.

There will be a minimal charge for this. And the buyer can directly talk to the vendor to

negotiate or clear whatever queries he has about the product.

Industries like Real Estate benefit a lot as there will be a lot of questions that a buyer wants

to know before he selects the property. Websites which offer products on rent can solve all

their issues with this feature. The customer is given a membership card and whatever

product the customer wants to rent, they can simply use click to call feature to place the

order.

This feature also helps in creating trust amongst the customers. They can easily talk to the

vendor and clear whatever the queries they have before placing the order. This feature also

helps in generating leads to the vendor. Used effectively, Click to call can be great feature to

create a trustworthy brand in the minds of the customer.

Building a Brand in Ecommerce in India?Posted by Sunil GR on June 9, 2012 0 Comments

Well, many have asked me how to build brand for the webstore in the ecommerce industry

in India. How to get more traffic and how are the conversions done?. This is a subject that

needs a lot of thought process that should go into it .Because there is no proven formula of

building brand like one has in the offline retail market. Internet is completely a new domain

and everything is quick here.

Advertisement is a no brainer that everyone gets when asked about the brand building for

ecommerce. But there is more to it now. Great service, commitments, keeping promises,

and consistency are the key factors that make a brand. There is an example of a new

webstore that has popped up very recently and I must say that their services are fabulous.

They deliver the product in a day. The product is never faulty and if its one, they give you an

option of 30 days return policy. And they do it. This kind of customer service made them a

huge brand now and it’s competing with the likes of flipkart.

Similarly, there’s one more famous site in which I ordered a watch. Payment was done and

after 3 days, they call me up and say, the product is not available. I will never shop from

that website again. And look at the branding they have created. Even if you spend lots and

lots of money on advertisement, you still will not have great conversions for the simple

reason that the commitments, promises are not kept. Remember Internet is quick and viral.

With social networking sites, blogs, forums information is available everywhere. People not

only browse for products for prices and discounts, but also check the quality of the store in

terms of the commitments and promises. Build your brand around your vision. Do what you

talk. It’s simple and creates a great brand in the minds of the people.

Is COD a Spoiler for India?Posted by Sunil GR on June 1, 2012 0 Comments

Cash on Delivery was very exciting. Everyone thought this will solve all the problems faced

by Indian ecommerce. Market was not ready for Credit card payments, customers were not

comfortable sharing the bank details over Internet. Internet Infrastructure itself was not

robust. When COD was introduced by some major players, every one readily embraced it

and thought this should solve every problem.

Cash on Delivery is primarily launched to enable that generation which doesn’t have credit

cards and debit cards to shop online and that community which was not confident of

transacting on internet. But the monster took over. The total control shifted from merchant

to buyer. Merchant is at the mercy of the buyer. Merchant is not sure of the sale until the

buyer pays the money. Statistics say that there are 40% return on Cash on Delivery.

Merchant has to bear the cost of cash on delivery charges, and if the customer doesn’t take

the product, the warehouse charges have to be borne and the return charges as well. This

not only eats away whatever little profits he makes on each sale, but runs the merchant to

huge losses.

It is a good idea to introduce an alternate payment when the industry and infrastructure is

not ready. But the Industry and players also should quickly correct the market if the ideas

like these are making losses for most of the players. Customers should be educated to use

online payment more. They should be lured with discounts if they choose online payment

over COD. The mindsets of the customers have to change and Industry itself has to drive the

initiative. Only one who is making money out of COD is the logistics providers. Before COD

becomes a loss making activity for the whole industry, measures have to be taken to make

it profitable.

Read the Terms and Conditions sheet.Posted by Sunil GR on July 27, 20120 Comments

How many times did we sign the terms and conditions sheet without reading it? Well,

everytime. And they we fall into a soup when there’s a conflict. How should we really push

the customer or vendor or merchant to read the terms and condition sheet to let them know

each and every aspect and you become a transparent company?

Here is an idea. In each paragraph of the Terms and Conditions sheet, lets leave a blank

where the customer must fill. It could be his name, company’s name or the name of the

company with which he is entering into a contract with. This forces the other party to read

each and every clause. I know this is irritating for anybody to fill in the sheet and go through

the tedious process of reading the whole document, but isn’t it nice to know the clauses,

instead of repenting and running around with the legal team to get you out of soup which u

landed in, just because you didn’t read the Terms and Conditions. Just a thought.

Why does an Ecommerce company fail?Posted by Sunil GR on July 18, 20120 Comments

Everyone is excited about ecommerce in India. This Industry is promising. Statistics are very

good so far. We hear many success stories too in the media and PR. Have you ever realized

how many companies opened Ecommerce shops in India and closed?  There are numerous

companies that signed up for Online Shops and have to burn their fingers and close their

ventures. What could be the reason for their failures? Let’s discuss in brief. These are not a

complete list and are my views and perceptions only.

Suppliers/Sourcing of the products.

If a vendor is starting an Ecommerce company, He or she must be having a good supplier

who gives them the products at a much lower cost than anyone can give them. Otherwise,

there is no point in entering into Ecommerce venture where price war is at its peak. Apart

from good relationship, cash flow is a major issue which makes these Suppliers to look

around for a different vendor. When you have your capital ready, make sure a large chunk is

budgeted for Supplier and acquisition of products. Even if you take a Bank Guarantee, if you

are not selling the goods consistently, both the bank and supplier is after your life. This is

the major reason which can break the shop.

Customers don’t buy from the site

Well, the vendor has a great technology in place; they also appoint a Search Engine

Optimization team which takes care of getting traffic to the website. Enough marketing is

done in the social media to get the traffic on to the site. But the customers still wouldn’t buy

from the site. This is a very common problem for all the vendors in Ecommerce. More money

is burnt on offers, promotions, SEO, Google Adwords, etc. May be a nice analysis on the

website, products, promotions is missing. It’s good to push the throttle to the optimum, but

it’s equally important to check if the direction, speed and approach are right.

Flawless Operations

Many companies fail to streamline their operations. Transparency, communications within

and across the teams is very important now. Updating the stock, delivering the right product

at the right time are very simple but hard to adapt for any ecommerce companies now. I

ordered a product from a famous lifestyle website to gift my wife. They tell me the product is

out of stock after three days. I will never buy from the website again. They lost a customer.

If you looses customers like these because of the operation flaws, you are out of the

Business soon.

Innovation and Adaption

Ecommerce Industry in India now is very dynamic. If you yawn and blink, you missed an

opportunity here. Either you define the trends here, or you must follow the existing ones. I

have seen a very famous company lagging in adaption. When Flipkart offers product

delivery of books in 3 working days, its closest competitor offers the delivery in 3 weeks. If

you are not quick in adaption, this is simply not the game for you. Customers are ordering

online, because they want the product immediately. The vendors should also innovate in

terms of new strategies, offers, promotions. Lack of these, slowly but steadily kills the shop

altogether.

Get and Retain Best talent

Ecommerce is still nascent in India. You will handful of people who are experts in

Ecommerce. The head hunt is at its peak. It’s a no brainer to say domain knowledge puts

you in the front seat now. Acquire best talent, keep them happy and retain them. They are

the people who will define the market strategies and trends. It’s always your employees who

run the company.

Proper research, guts, quick thinking are the key factors a vendor should have to make a

successful Ecommerce company. It’s a round the clock business; Vendors have to be on toes

all the time now. We hear many successful companies, but there are numerous companies

which simple failed at every stage of their growth. Keep analyzing and correct the path,

speed and yes success will be yours.

Consistency for Successful Ecommerce CompaniesPosted by Sunil GR on July 13, 20120 Comments

I was watching the Spider man series. And this particular statement caught my

attention.”With great power comes great responsibility” I was trying to relate it to all those

Ecommerce shops that caught the early Bus and came this far in the great ecommerce

journey in India. How does one show consistency and win the customers and Business?

A happy customer is a sales man for your product. But a happy employee will also be a great

sales man for your organization. I believe sales start with happy employees. Ideally,

organizations also should concentrate becoming employee oriented. Train them on newer

concepts, encourage them on newer thoughts, and keep them happy in every way. This

culture amazingly reflects in scaling up the organization success to next levels. The positive

culture of the company is the most important factor that contributes to the success of the

Organization.

Well, you have done enough work to beat the competition and come to a stage where

Industry recognizes you as a major player. What next. Consistency is the key factor. The

organization should show consistency in impressing the customer with their services. Treat

the customers special. Let them know that you really care and respect them. Staying in the

market and running the marathon without dropping the ball is the key factor here.

Innovate. Finally your energies should focus on innovating newer processes. Think of new

strategies, implement them and set a bench mark to the Industry. Think of new ways on

impressing the customer in every way. You should delight the customer with your

innovation. If you want to stay on top, you should take care of these simple factors and you

become a dark horse which always wins long races.

“Out of Stock” Or “Pre-Order”Posted by Sunil GR on July 5, 20120 Comments

E commerce has picked up in India. Its price war and quick delivery. Every player wants to

grab the market share. But I see some sites are still lagging or overlooking the basics. The

other day I order a watch from a lifestyle webportal. After 3 days, I come to know that the

product is out of stock. My friend also had similar experience.

Firstly, the inventory management system has to be strong, Continuous updation has to

happen between the Inventory management system and the webportal. Yes, please mention

that the product is out of stock if its not available. Customer will obviously be angry when he

comes to know that the product is not available. On top of that the payment gateway

charges have to be borne by the vendor which is again a loss. This out of stock problem

occurs, mainly because the dependency on the sourcing of the product is more. If the

vendor doesn’t stock the product at his warehouse, he doesn’t know if he has to pick up the

order or not.

The best practice to avoid this situation is to replace the Out of Stock concept with Pre-order

feature. Let the customer buy the product as a pre order and pay the money. The vendor

can still arrange for the product if its out of stock.  This will also set the expectation of the

customer in terms of delivery of the product. They will know when they will get the product.

If the Vendor doesn’t want to stock the product in the warehouse, it’s best to convert that

product to pre order and deliver on time. This will reduce your unhappy customer list, save

the Payment gateway charges and leave the customer delighted if delivered before the

promised time.

Ideas to kill COD (Cash on Deliver)Posted by Sunil GR on August 17, 2012 2 Comments

Cash on Delivery has hit hard on the Indian Market. The concept was introduced to help

those customers who don’t have credit/debit cards or for those who are not comfortable

using them online. Generally for our parent generation. Soon this feature became very

customer friendly. Initially it was a nice concept and increased Ecommerce transactions, but

in the long run it became very unprofitable for the vendors. Industry statistics say there is a

loss for every product that is on COD. Because, firstly the money has to be collected by the

logistics providers who deliver the product. And they charge a handsome commission for

this. Secondly, the charge backs are huge for Cash on Delivery. Remember, the sale hasn’t

happened until the customer pays money. There are many cases where the customer

changes mind, or he doesn’t receive the product for various reasons (I am not blaming the

logistics here). Industry estimates around 40% return rate for COD. The cost of warehousing

and return charges of logistics also adds up, cumulating to the total loss.

How do we tackle this issue? I think if we can change the customer’s mindset on using COD

can help cut some of the losses here. Young customers who fall in the age group of 18 to 35

shop more online. These are tech savvy and comfortable using cards online. They opt for

COD because it’s convenient. We can implement ideas like, at the checkout, if a customer is

choosing COD, let the vendor give the customer some %age of discount or throw a freebie

or give away a gift certificate or voucher code for next purchase if he chooses to pay by

credit/debit/net banking instead of COD. Remember, customers buy online mainly for two

reasons, best price and convenience. This way slowly the customer’s mindset can be

changed and losses can be cut. What’s wrong in trying?

30 Day Returns accepted, why?Posted by Sunil GR on August 4, 2012 0 Comments

A new trend has popped up in ecommerce in India now. 30 day, 60 day returns accepted, no

questions asked, we will return your money back. Now how practical is this? It raised couple

of thoughts in my mind.

Firstly, if the vendor is extending this offer to satisfy those customers who get defective

orders, we all welcome the kind gesture. But, the vendor has to make sure the product is not

defective when packing. If you are not doing it, you are not doing ecommerce right. Let’s

say even if the product gets damaged in transit, you didn’t pack the product properly. Of all

the odds, if the product is still defective, customer will anyway call you and blast you for

shipping the defective or wrong product. Then why in the first place are you offering this

particular feature. Are you not confident of your processes and products?

Secondly, from the customers’ perspective, customer has a huge option to spoil himself

now. He orders a product, uses it for 10 days, and says I want to return the product. Vendor

accepts it. What will happen to the product now? It’s a used product and vendor can never

culminate it, because he is already making losses on free shipping and cash on delivery. So

it might be culminated or will join the stock again. The next customer might get a used

product which might leave a bad taste on his experience and ultimately killing your brand

image and overall ecommerce market in India.

Instead of all these unnecessary complications, make a proper process, deliver right product

undamaged and gain trust. Indian customers are already spoiled to the core by the offers,

free shipping and cash on delivery concepts. Crazy return policy is not only spoiling the

attitude of the customer, but is hurting the whole industry. Capture the market share with

genuine products and experience, instead of crazy concepts like these. This will help

everyone grow in the right direction in the long run.

Gift vouchers to retain customersPosted by Sunil GR on September 28, 2012 0 Comments

Adding to the previous post, the web portals also can use gift vouchers to retain their

customers. AN interesting way to lure the customers to use these gift vouchers is to actually

gift them a voucher. Whenever the customer buys a product from the website, with the

delivery of the product, send them a gift voucher as a gift. This gesture will not only make

the customer happy and leave a positive branding in the minds of the customer; he will also

come back to the website to use it.

If the merchant has a doubt of running into losses with the gift vouchers, they can make it

conditional. In the sense that, if the customer buys some products worth X amount, the gift

voucher can be redeemed for y%. Or the merchant can innovate some more ideas to bundle

the products or increase the cart value to use the GV’s. An easy way to use GV is to make it

conditional to use them on stock that is not moving in the warehouse. This will not only clear

the stock, but the customer will be delighted with the idea that he is really being

appreciated for purchasing on your portal.

Customers are always happy when they get surprise gifts. Let’s make the GV’s conditional,

to increase the stickiness on the website, by making the customers make repeat visits,

repeat purchases. Customer is delighted and so are merchants.

Retaining CustomersPosted by Sunil GR on September 25, 2012 2 Comments

How does one use the customer’s data for Business Intelligence in Ecommerce portals?

Sounds like we are already doing it?. There is a lot of data about customers that’s landing on

the portal each time a customer visits. If we can get them register with certain basic fields,

we have a huge amount of data with us. The age, location, gender, their navigation style,

the products they are interested in, the time of the day or night that they visit the website.

All these can be intelligently used if we can mine the data properly and profile it.

For instance, a customer browsing the portal from south India, if we have all the mentioned

data with us, we can suggest him with various options to buy even suggesting the trends in

lifestyle. South Indian go crazy in shopping for apparels and jewellery in the last part of the

year. We can suggest the latest trends in fashion, offers at that particular time, keeping in

mind the buying trends the customer gives us. For repeat customers, we also know how

much they generally spend online; this also can be used intelligently to throw products at

them at their price range. Data is very precious and if used intelligently, conversions can

happen easily on the website. Of course, one should have a robust technology to implement

this. Given the trend happening in Ecommerce in India, acquiring the customer alone is not

important, retaining them is.

Browsing Vs SearchingPosted by Sunil GR on September 20, 2012 0 Comments

I wanted to buy a scarf and I visited many lifestyle websites and started browsing through

the sites. In these websites, there are like more than one lakh products. I started browsing,

dodging through various offers, other products which obviously of no interest to me as I am

not an impulsive purchaser. I had to spend around 2 hours to buy a scarf worth Rs. 500. I

had to spend so much of time researching to buy the product that I want, thanks to

ecommerce, I don’t have to visit lot of stores and spend lot more time. But the obvious thing

that worries me is, do I have to spend so much of time browsing through various categories

for every product that I had to buy?

The entire ecommerce store that I visited, categorise the products and list them on their

portals. Unfortunately, the depth of the categorization will be missing for various reasons.

Browsing through all these categories and finding the product is again a tedious task for

customers like me who know what they want and want them immediately.

An alternate solution would be the search capabilities of the portal. If the portal has robust

search capabilities, it would be a great help for customers like me. The tagging has to be

perfect and the SEO has to be done meticulously so that the searching would be easy. The

back end engine has to be designed and programmed properly. Various kinds of search

options need to be given. Product suggestion on each product page is a great idea which

saves a lot of time for browsers.

All in all, if the portal has the capability of showing the right product for the customer who

searches, saves lot of time for the customers, and increases conversion rate. Customers

want products available online and they want them quickly. Let’s gear up the site for this.

Stay Low and Still Make ProfitsPosted by Sunil GR on October 17, 2012 0 Comments

Well, we all have the same question, where will the consolidation lead to in Ecommerce in

India? What is the future?. The prediction is tough. So how does the vendor run the

Ecommerce Business in India? If spending huge revenues on advertisement, SEO and on

other marketing efforts are not working, here is something you can do to still run the

Business without making losses.

I would like to call this particular phase of Ecommerce in India as Marketplace phase. It’s

marketplaces everywhere. Since they provide only platform for vendors to sell their

products, they dont really run into operation costs. Typically a market place gives an

opportunity for a vendor to list their products on the portal. When a customer buys the

product, the order is simply transferred to the vendor, where the vendor fulfills the order to

the customer. After the delivery, the money is transferred to the vendor. The shipping costs

are generally borne by the vendor, or he can transfer it to the end user. So the vendor,

decides the price of the product, with whatever margins he wants, and starts listing the

products on the marketplace portal. Marketplace main job is to promote their portal and

manage the technology. Its a nice win-win situation for the vendors where he can make

whatever ever margins he wants and still make decent profits.

Becoming an online vendor and listing the products on marketplaces is a nice idea, given

the situations in Ecommerce industry right now. Well, when we dont know what to do in a

given situation, we can either sit back and do nothing, waiting for something to happen or

we can still make some decent money by adapting to certain conditions

How long Etailers have to wait?Posted by Sunil GR on October 15, 2012 0 Comments

What is the future of Ecommerce in India?. Which route is the consolidation taking?. What

are the exit routes for the etailers?. These are the million dollar questions running in

everyone’s mind now. Ecommerce is evolving in India. There is no specific prediction as to

where this will lead to. Everyone has their own theory and hopes as to what will happen to

this Industry. Some are losing hope, Others are still hanging on to it. Investors are holding

their pockets for now. The truth is not many companies are making profits in the Industry.

The reasons can be many. It can be the Infrastructure which is still not ready. The

customers’ mindset which has been spoilt to an extent by aggressively giving freebies like

COD, free shipping etc. Thanks to FDI, this backend operations can be streamlined. It’s

Marketplace era now, as no one wants to stock the products and bleed. Marketplaces gives a

platform where vendors and buyers can interact and make transactions. This is a safe game

for now. Marketplaces can also invite more investment as long as the model is only a

platform. The doubts are many, but it’s only 3 years that India has seen the growth

and evolution  Customers are willing to buy online. Transaction are huge. No one knows

what is the perfect formula for a successful Ecommerce venture. Industry is slowly taking a

proper shape now. Etailers had held their nerve till now. Now it all boils down to how long

can they still hold it. It’s time to shape the Industry. If the Industry is streamlined, Everyone

will make profits. It’s all patience and hope for Ecommerce in India now. The longer the

Etailer holds on to this hope, the chances are high that they will emerge as market leaders.

Its all wait and watch for everyone in the Industry now.

Using Abandoned Cart feature effectivelyPosted by Sunil GR on November 29, 2012 4 Comments

The other day my brother was shopping for a jacket online in a very famous Indian Apparel

site. He had lots of things in mind regarding the size and fit of the jacket. Everyone always

has a problem as one cannot try it online and different brands with different sizes and

makes. Well, the point is not that. He anyways wanted to try, but at the point of making

payment, he changed his mind and discontinued shopping. What happened next was

interesting.

The executives from the website, called him immediately, and asked him what exactly the

issue was and they were ready to give certain discount over phone. This discount was not

available online. This surprised me a lot. Is it out of desperation or is it a gimmick to retain

the customers? Whatever it is, this act actually lured my brother to buy from the website.

The reasons are simple enough, the website was caring and paid attention to the customer,

it offered discount and it gave confidence to the buyer that if something happens, they are

ready for an after sale service. This is what is expected of Ecommerce industry in India. I

couldn’t stop appreciating the level of commitments the Ecommerce portals are showing to

gain customers confidence.

The way abandoned cart feature is used is amazing here. This way, all the customers’

opinions, who are discontinuing shopping at the last moment, are taken and greater

assurances and confidences are given to the customers so that they not only shop more but

also spread the word across. Nice way to handle the crisis and make sales.

Making Money From ShippingPosted by Sunil GR on November 7, 2012 4 Comments

Looks very confusing right!.  We all know that Shipping is the major burner for every

Ecommerce website. If the shipping cost is reduced, I feel every Ecommerce company will

be in profits. We have discussed in the earlier posts that shipping costs can be reduced by

using hybrid delivery methods. Managing the last mile logistics also will reduce the cost of

the shipping to  great extent.

Now here is an interesting concept where we can make money out of shipping also. Yes.

Now every product is neatly packaged for delivery. If you observe, there is a lot of Ad space

available on the packaging. This blank space that is available on the packaging can be used

for advertizing of various brands, products etc. This is a very interesting concept where the

revenue can be generated from shipping. And one should be careful in not overdoing this

advertizing, as it may irritate the user and kill the brand image of the Ecommerce site. But if

used judiciously and cleverly, one can make some money out of these advertisements and

run into profits.

Maximum utilization of the resources and space that we have is the name of the game here.

If we cannot innovate new revenue generation models, it’s better to use the existing

resources optimally and make profits.

Making the most of Television for Ecommerce in India.Posted by Sunil GR on November 1, 2012 1 Comment

The other day I went window shopping to check the latest TV’s in the market. I saw many

versions of the latest technologies incorporated in the television. There were some where

one can also access internet on TV. They give you a browser and you can connect the TV to

internet with WiFi technologies. There are some more which have internet and also 3d

technology. Now these products raised curious thoughts for ecommerce in India.

Yes, Now the whole family can shop sitting at home. Gone are those days when the whole

family or bunch of freinds go together for shopping. These technologies are going to open up

that old habit again. The whole family can sit at home, browse through various ecommerce

sites, make comparisons, get the best prices and what else they all can shop right from

home. The interesting fact is TV is a commodity which we find in almost every home in India.

The penetration of ecommerce will be very high if these technologies barge in to every

home. The reach of ecommerce will be absolutely high. Well, I know it will take a lot of time

for this to happen, but it will definitely.

What should ecommerce sites do? Well, be prepared is the thought that comes int my mind.

Ecommerce is on a bumpy road right now, but with these developments that might happen,

Shopping is the next best thing people will do apart from watching TV. The Ecommerce sites

should gear up with new technologies like, product presentation, 3D viewing and ofcource

the augmented reality. Remember TV’s have larger screens and better quality. So the

product presentation has to be outstanding. Be prepared is all I can say. All these might take

a pretty long time, but yes the future of Ecommerce in India is this.

What is a Marketplace?Posted by Sunil GR on January 30, 20132 Comments

I was approached by a budding entrepreneur and he wanted to make a Marketplace. And

the concepts of Marketplace that he has in mind were completely different. That is the main

reason for me to write these few words. Now there is a very large difference between a

Marketplace and a regular Ecommerce website. In a regular Ecommerce website, the

product catalog is displayed with PG and shipping integration.  When order is placed by a

customer, the website ships the product. It’s as simple as that. Now when it comes to

marketplace, there will be vendors who come into picture. A product can have many

vendors. Here the Website acts as a platform for various vendors to showcase their

products. The end customer has an option to choose the vendor from which the product has

to be purchased. Once the order is placed, the vendor ships the product directly to the

customer. For this to happen, Vendor should be given total or partial control over the

website in order to upload/update his product catalog and receive information about the

orders placed for his product. The Market place should give all these facilities to the vendor.

Of course the payment transactions will happen on the Marketplace website, who in turn will

share the monies with the vendor as per the orders the vendor receives. So in Marketplace

model, the shift and focus is more on the vendors. This I think is the main difference

between a Marketplace and a regular Ecommerce website.

Ecommerce Consulting in IndiaPosted by Sunil GR on January 29, 20130 Comments

Dear All,

I am glad to inform you all that I am taking up independent consulting works for Ecommerce

domain. I can provide you with functional consulting in setting up your Business in

Ecommerce. I can provide End to End Solutions for your Ecommerce Business. These will

include

Setting up Business

Ecommerce functionalities and features

Vendors and Vendor Management

Payment Gateway Solutions

SEO and online marketing

Consulting for Marketplace model

Setting up processes for Order Management and after sales services

Unique advises for speeding up sales

Please write to me at sunilgr@gmail.com for any inquiries.

Revisiting Return PolicyPosted by Sunil GR on January 25, 20130 Comments

Return Policy was initially introduced to do justice to those customers who get wrong or

defective products. This is actually a nice practice which will induce confidence to customers

who order online. Well there is also a cost involved in the form of reverse logistics. Already

many eCommerce sites are bleeding a lot in terms of logistics. Though reverse logistics and

delivering the right product again is a pain, it will finally gain customers confidence and

helps in retaining them.

Sometimes this feature is misused by many customers. They order a product, use it for

couple of days and return the product within 30 days. They either claim a new product or

get their cash back. Either way, it’s a huge loss to the Company. Beauty, cosmetics is the

worst hit in this scenario as the products cannot be refurbished and sold again. Once a

beauty product is used and returned, it cannot be used again.

The best practice for this kind of issue, which some of the Ecommerce companies are

following is to get the confirmation that the right product is received by the customer on

delivery. Yes, when the product is delivered, let the customer open the product in front of

the delivery boy, check if the product is what they ordered, take a confirmation and end the

story there. If the product is a wrong one, they can return the product then and there to the

delivery boy who will get the product back. This way, Ecommerce company can save lot of

money on used products, which are returned.

Resellers for Ecommerce WebsitesPosted by Sunil GR on January 2, 20132 Comments

Internet penetration in India is boasting of an increase at 10% year on year. But till it

reaches every nuke and corner of India, how do we penetrate Ecommerce. There is still a

large crowd out there in urban and rural areas that still have doubts on online shopping. It

could be lack of trust and use of Credit and Debit cards.

Having Resellers in these areas for Ecommerce websites is a nice idea. Here, anyone can

become a reseller as long as they have a laptop and decent internet connection. Chances

are high that people will believe their uncles are aunts about the products that they sell,

than the Ecommerce websites. These Resellers can show the products online and if someone

wants to purchase the products, they can place the orders to these Resellers’, who in turn

place the order on the website ( It can be online of offline). The product will be delivered to

the Reseller who in turn delivers it to the end user.

We are trying to capitalize the point of trust that people have in their peer groups. It could

take some time for people to trust the Ecommerce in these Rural and Urban areas. But till

then, this Reseller model could work wonders. This is also a kind of Employment generation

scheme as the Resellers will have their own commission on each sale. What’s wrong in

trying?

Waiting time – Shopping timePosted by Sunil GR on March 1, 2013 0 Comments

Many people spend lot of time traveling. And they spend an equal amount of time waiting at

Bus Stops, or Railway stations. I was watching a video, where one of the largest Retail store

has implemented a unique solution of using bar codes to shop through smart phones at

these places. Well, it is not really possible in Indian scenario, but what is possible is this.

The Ecommerce stores can plant kiosk machines at Railway stations or Bus Stops.

Remember, people spend a lot of time waiting here at these places. Kiosks machines can

show case the products, enable people to buy the products and choose the delivery date

and time. This way, Ecommerce stores can virtually create their shops across every nuke

and corner of India. They can reach the customers effectively. What more, all the people

who wait there, instead of sitting and waiting, they can jolly well start shopping. Well, it’s

converting waiting time to shopping time.

The technology has to be worked out, making sure the navigation and product presentation

is impeccable. It should be as interactive as possible so that every one should be able to

use. Remember there is a lot of crowd out there, waiting to use their idle to something

useful. Shopping is the next best thing to waiting

Time for a Marketplace.Posted by Sunil GR on May 11, 2013 0 Comments

It’s raining marketplaces in India. Why is everyone shifting their focus to Marketplace?.

That’s a question lingering in my mind too. 2013 has been a dumb year so far for

Ecommerce. No one is making a move. Losses are flowing by in Every Ecommerce portal.

Many Ecommerce companies failed to make themselves special in a particular area. Every

one ran after the market share, not offering that special thing and thus carving a special

niche. Result, Every customer in India is adapted to only one thing, price. Customers are

running after best prices only. Ecommerce companies in India failed to turn customers to

brand loyalty. So losses are bound to happen unless companies target a long-term strategy,

than to plan a short term exit.

So what is the next best model that can work in India? A marketplace. If you have a good

team to build you a marketplace platform, opening a marketplace is the risk free business in

India. All you have to work out is a nice group of vendors, who can give you a good price,

and deliver goods on time. You place the products on your marketplace; let customers order

the product, the vendor will deliver the products. Sounds pretty easy. The marketplace has

to market itself well, and announce nice deals. You will not have the risk of stocking the

product, managing the deliver. All you have to do is to make sure customer has a great

experience when shopping on the Marketplace. This part is tough, as everything that is

concerned to vendor is not in your hands. The qualities of the product, the delivery, the after

sales service are all to be managed by vendor. If you can manage these processes well and

give a great experience to customers, Marketplace will win.

Everyone is shifting their focus to marketplaces now, be it service providers, consultants,

platforms or groups, payment gateways, Banks and many more. Everyone will open up

marketplaces. No wonder, India will be crowded with Marketplaces soon. Unless you are

unique, you will become a crowd again. Wait watch is all we can do.

Ecommerce project – ExecutionPosted by Sunil GR on June 28, 2013 2 Comments

Lets talk about how to implement an Ecommerce project successfully. These are my views

and may defer with many in the market.

In general, there are three phases where the Ecommerce project can be divided. Product

Management, Software Engineering and Execution.

Product Management – Here we define the scope of the project. The Kind of Ecommerce

portal that one wants to make. Defining the categories, Vendors, Vendor Management,

Sales, After sales, Logistics, Customer Support and the like. Remember, this is only defining

the scope of the project and making the blue print of the project. Once we have this in place,

we basically have a clear idea of what we are going to do and how to achieve it.

Software Engineering – Next comes the software Engineering. Here we decide what

softwares we use to develop the project and for each department. The interactions both

internal and external need to be profiled here. For instance, Internal communications could

be the information exchange between vendor and Accounts. Vendor and catalog manager.

External could be the delivery and logistics. The information exchange and integrations have

to be defined impeccably.Deciding on the softwares that need to be used to develop the

project keeping in mind the scalability is done in this phase.

Execution – The third and the most important part is the execution of the project. Here the

roles and responsibilities of the Human resources are defined and delegated. The operations

manager plays a major role here as this resource will coordinate and check the day to day

activities of the development and smooth running of the project. All the resources like the

program managers, programmers, catalog managers, vendor managers, sales, after sales,

accounts , customer support have to work hand in hand keeping in mind the scope of the

project and using the blue print of the software Engineering and the operation head takes

care of the execution of the project.

Well this subject has to be discussed in detail, but here is an overview.

Big Daddy is HerePosted by Sunil GR on June 18, 2013 0 Comments

Well, The Big Daddy of ecommerce has arrived in India. Yes, Amazon.in is launched. The

launch has already created some ripples in the industry. Small time players are already

asking me, is it worth opening an Ecommerce portal now. Big players of the Indian Industry

are already shaking and it’s clearly visible in their services.

So what will happen now?. Ecommerce in India this year has done not so well so far. Agreed

that the industry is well, there are lot of opportunities etc, but this year, Ecommerce has

seen a steep and steady downfall. Many players have closed down their Ecommerce

businesses. Some have turned themselves to full time vendors to large marketplaces. Even

the service providers failed to predict the market and advise and drive the small time

ecommerce ventures to success. The buzz was and is all about marketplaces. The

predictions are that marketplaces will rule the Ecommerce space in India. Looks like this

space is being threatened by Amazon in India. Lets not forget that amazon has muzzle and

technology beyond imagination to capture the market in India. In terms of ecommerce, India

is still not organized. There is no differentiation factor for any marketplace or any

Ecommerce shop in India. This attitude has actually killed the market to a large extent.

Everyone is offering everything. The price war is huge. This strategy will work as long as

there is enough money in the bank to spend. Once market is captured, it’s either selling it to

a larger company or closing the shop down in losses. This eventually is killing the market.

Companies which want to open marketplaces in India can take a walk now as the market is

largely captured and killed. With the arrival of Amazon, the dreamers can wake up now and

watch what’s going to happen. Unless one has a very unique strategy, and offer impeccable

service and nice user experience, one cannot survive the Marketplace space in India. Let’s

see what the marketplaces will do?

Process and CulturePosted by Sunil GR on July 27, 2013 0 Comments

A company’s success largely depends on the process and culture that they imbibe in an

organization. My stress would be on the process that is designed for the execution. You can

recruit hundred employees for every idea and strategy you implement. Or you can design a

nice process and let the process take care of the success of the strategy and idea.

The culture of the company comes from the vision and people of the company. The DNA of

the company is very important for the success. The vision and the people in the company

contribute to the process to be implemented in the organization. This process automatically

defines a culture which contributes to the success of the company in the long run. Of course

there will be lot of hindrances in setting up the process, but the vision and the consistency is

important to get it right.

So, having a nice vision and employees are very important to run a successful company. The

process and people have to be continuously reviewed and have to be put on right track in

sync with the vision. Once this is done, you don’t need hundreds of employees to be

successful, but a handful of people with a nice process is enough to get to success.

Idea to increase salesPosted by Sunil GR on August 28, 2013 0 Comments

My friend is a professor in a fashion college here in India and I had a chance to go attend

one of his lectures. The topic was how to train your mind to perceive things at a glance. And

the students were discussing on innovating games to train the mind.

Something strikes my mind then. Why not have a marketing angle to it. If we can somehow

engage customers who are coming to the Ecommerce website with innovative activities,

there is a chance that the customer will stay as long as possible and likely to buy something.

This is what happened with Facebook way back when they introduced games like Farmville

and mafia gangs. It might work like this. Let’s take an example of an apparel site. The site

can introduce some activity like, find 10 colors with this kind of fabric and you get 10%

discount. The technology is very simple where we can have a counter which validates and

then the person gets discount.

There are two things to be observed here. Customer unknowingly will browse through most

of the products on your website. He will come to know what variety you have. Secondly, he

spends a lot of time on the website and with the discount coupon he earns, he will most

likely end up buying something. Well the focus is on buying. Why not try something different

Promotions RedefinedPosted by Sunil GR on August 23, 2013 0 Comments

In the previous posts, we discussed how the promotions have to done for the products. It

could be with discount vouchers, coupons, and cart level promotions. Well these work nicely

and results are being seen. There is a new concept of promotion that has come into the

market. It is called as Bundling promotions.

This is how it works. On the product image, three or more products are added and bundled

as a set. Like in the Women garments, apart from the kurti shown, bangles, footwear, etc

are included in the picture. A customer should be able to change the products that are there

in the image and choose what goes with it. Here comes the interesting part. Whatever be

the product selection by the customer, the price of the total image remains the same. Little

tweaking and product category sorting will do the trick.

The advantage is that this helps in cross selling of the products. The excess stock can be

pushed away and customer is happy to choose from a variety of list and is happy to buy

products that go along with the original product. Let’s try this and increase stickiness to the

website and invite more sales.

A Dash Board for MarketplacesPosted by Sunil GR on August 7, 2013 0 Comments

Many of my customers who are regular vendors and Ecommerce players have a common

problem. Managing the products on the marketplaces. We have seen in recent times that

many vendors are looking at listing their products on all the marketplaces in India as it gives

them decent number of orders. And the money spent on acquiring clients on their regular

ecommerce sites are pretty high. So what are the issues faced by these vendors and what

could be a possible solution?

Well, manpower is the first problem that these vendors face when it comes to managing the

catalog on the marketplaces. Activities like talking to the marketplaces, listing the catalog,

running promotions on regular basis, receiving the orders, shipping them as per the

commitment to the marketplaces, generating invoices to the marketplaces and receiving

money from them. All these need at least one resource to manage from the vendor. Imagine

this activity for more than 10 marketplaces. Its tough to manage with few resources. When

the vendors are running into losses with each shipped product, it really is a nightmare to do

business in India in Ecommerce.

A possible solution is to have a dashboard which seamlessly connects to all the

marketplaces. From this dashboard, one can choose the products to be listed on various

marketplaces. The orders can be received here and payments to be received also can be

viewed and managed here. It will be great if the marketplaces can give you analysis about

your catalog right in this dash board. This will make the lives of all the vendors very easy.

Lot of cost can be saved in terms of man power, the operations can be managed in a simple

and efficient way. But how does one make a dashboard?. You have to talk to the

marketplaces and ask for API’s that can be integrated to your website or your application.

Platform service providers can also take this initiative and extend it to their customers. Not

all the marketplaces are ready to open up the API’s now. But, this should eventually happen

and every marketplace has to open up the API and integrate. Life in Ecommerce will be

simpler with this Dashboard.

Ecommerce for Optical BusinessPosted by Sunil GR on October 16, 2013 0 Comments

I got couple of enquiries from opticians to setup an Ecommerce store. It’s a nice Business to

go online, but there are lots of challenges. The major one being, the variants for lenses.

There are hundreds of variants which include power, shape, anti-glare and for both the eyes.

And each variant has different prices. The product page has to be built in such a way that

the customer has to choose from the huge drop down list and for each eye. Then he checks

out. If the technology supports this particular feature of many variants for one product, the

Ecommerce store can be setup easily.

Second major challenge I see is on the customer’s end of gaining confidence and trust. What

if the wrong product is shipped? Can the customer check if the product is right? If the

customer ignores it and start using it, there are high chances that the power goes up. The

Ecommerce site’s quality check has to be impeccable. High standards have to be defined

and a good return policy has to be made for these products. Customer should be able to

return the goods and get back the right product easily and conveniently.

Unless the service levels are high, technology is good and policies are fool proof, the Optical

lenses or contact lenses business online can never be successful. But this is a huge

untapped market in India. And with high levels of commitment to services, one can master

this market.

How not to run an Ecommerce companyPosted by Sunil GR on October 8, 2013 0 Comments

I will tell you all a story about a startup company, which sent shivers in the hearts of big

wigs of Ecommerce solution providers in India, but failed to catch up with the Ecommerce

blitzkrieg and with lack of adaptability, focus, it eventually collapsed.

This company had the first mover advantage in Ecommerce Industry in India. They set up

the platform business, made a good solution and powered many stores. It was famous, until

the young platform providers entered the market and grabbed the market share. Though

they had a good head start, why did they eventually fail? What should any company learn

from this?

Firstly, to run a company like this, you should have a strong, dynamic team or a deep pocket

investor. This company had neither. Money is still a secondary part; a sound team is what

was lacking in the company. Every other member in the team is either a relative or from the

same geographical area as the management. It was really tough to penetrate into the

management with any good idea. Well, the so called heads of the department were not

really masters of their area. The same culture eventually flowed into the lower departments.

More than working for the company, every individual was working for himself to survive in

the company for as long as possible, playing politics. Lesson to be learnt, one should have a

good team to succeed.

Secondly, the process. Well there was no process in the first place. There was only one

process. The employees have to listen to the management. If they don’t, eventually they will

face the heat in some or the other way. The result, no ideas flow in the system. Management

is not ready to buy ideas. If you give any, you will be rejected. If you debate a

management’s idea, you will face the heat. Well, how can an employee get motivated in this

environment. Lesson learnt, Management has to listen, be ready to listen. Employees are

not your enemies. They are trying to help you grow your organization.

Thirdly, The people, precisely senior managers. The senior managers and management

looked like they teamed up together against the rest of the employees. There is no proper

information flow. I could see there were more egos flowing than the ideas between the

teams. The senior management was busy impressing and buttering the management. The

middle management was busy impressing and buttering senior management and so on and

so forth. Whatever revenues got generated was due to the Industry picking up as a cycle.

Fourthly, the Technology. When the product development started, the technology was good.

As it should happen with every successful product, the technology kept falling down rather

than improvising. It has become so complex now, that it can never compete with much

simpler solutions in the market now. This again is because of the lack of Vision, foresight

and of course the people.

Finally, the vision of the company was never clear. Every other month there was a new

strategy, be it in technology, sales or the Business Expansion. And these strategies were

never analyzed and learnt from the mistakes. Well the real problem was assigning wrong

jobs and responsibilities to totally wrong people. You can’t expect a football player to score a

century in a cricket match.

Well this is a nice case study, which helps us learn how not to run a company. It’s on the

verge of closing the Business and pulling the shutters down. Let’s all remember one thing.

Business, emotions, favoritism will never go together. If you want all these, then the road

ahead for a company is grave yard.

2013 trends for a maturing E-commerce space in IndiaArvind Sivdas, Co-founder, OfficeYes.com0 Comments

2012 was an exciting year for Indian e-commerce, which capped off an incredible 5 years of

exponential growth, from approximately $1.75 Bn in 2007, to over $14Bn by 2012. A lot is

being written about 2013 as a year of possible consolidation for the industry. But regardless

of how things develop in this sphere, 2013 will see more interesting trends and more

interesting innovations in the Indian e-commerce, as the market matures.

The rise of M-Commerce

Kleiner Perkins (one of the world’s largest VC firms) research into mobile Internet usage this

year uncovered some fascinating insights for the Indian context. Globally, the share of

mobile Internet traffic is approximately 13%. However, in India, the % curves for desktop

internet .v. mobile internet usageintersected in May 2012 and have since diverged: mobile

Internet traffic in India now outweighs desktop traffic. Assuming this trend continues, and is

perhaps accelerated by the emergence of increasingly affordable in mid-low end

smartphones (with even Apple rumoured to be entering this market), India will be the first

true-mobile-first market. Indian e-commerce firms prepared to invest in creating world-class

mobile platforms are best-positioned to capture more market share. 

 

 

 

 

 

 

 

 

 

 

Bridging Thee-Commerce Product ExperienceGap

The essence of e-commerce still means that customers must feel a certain degree of

comfort that what they are buying will fit them / look good on them / look right in their living

room etc., and clearly many Indian shoppers still have major concern over this (despite

generous returns policies).

In 2013, we expect to see some interesting initiatives in India to bridge the information gap

between what the consumer wants and what the product is. In fashion and lifestyle this may

include innovations that leverage technology to help a consumer to find an item of clothing

that is a perfect fit via a ‘virtual try-on’ experience, or perhaps how an item of furniture will

look in your own living room.  

Social becoming more about Online Reputation Management (ORM) and less

about catching attention

E-commerce adopted the use of social media early on, but for a long time social media has

been about eyeballs, offers and other ways of grabbing the attention of potential customers.

The thinking was that wherever the customer is, your brand should also be. Simple. Well, not

really. Your brand’s online reputation management must be characterized by the existence

of one seamless ‘voice’ across all channels: Facebook, Twitter, Linkedin and so on.

Customers in 2013 will more and more value brands that stand for something, or are

differentiated in ways other than low prices and wide product ranges. We have seen just

how important this mix is with our recent focus on Apple products. Customers are buying

MacBooks, iPads, and iPhones from us directly from social media engagement that is not

limited to offers and features. Our ORM across our social media platforms has been a focus

of ours of late, and companies more and more will understand the value of this in 2013.

Product Videos: Engaging and Informative

Most e-commerce companies are very much aware of the importance of including high

quality product images on their product pages. Typically, products are photographed from

several angles, with the photos touched up to give a glamorous look. Photos tell part of the

story, but in 2013 we believe video will start to be a significant differentiator in e-commerce

for a number of reasons. Firstly, you can create more impactful content via video. Sure, that

laptop bag looks nice from several different photo angles, and I can read all I need to about

the product in the product description section, but how does it look on someone’s arm? Does

it look sleek and professional or a little tacky? How many compartments does it have? How

big are they? Could I comfortably fit a laptop in there along with a couple of books and a few

snacks to keep me going throughout the working day? What are the best features of the

bag? What would a young business professional think of it? These questions and more, could

all be answered with a simple 60 second product video, with someone showcasing the

product, putting it to use, and laying out its strong points in a way that appeals to the

viewer. Product videos are not easy to execute, but if done well they can have a significant

impact on product page conversion rates. We expect to see this as a major trend in Indian e-

commerce for 2013. 

‘Shoppable’ Images & Videos

And even going one step further, interactive, or ‘shoppable’ images and videos have

recently been experimented with by several large players, includingIKEA and Gucci.

Shoppable images create a vision of how products will look in the place where they are

meant to be placed. So rather than browsing through an array of product pages to look at

images of chairs, tables, sofas (all with plain white backgrounds) customers can browse

through images of a fully-furnished home, tastefully designed with a selection of products

available from that company – each product viewing in its natural setting, with of course a

clickable link from the product image to the product page. Shoppable videos can be used in

a similar way. With the typical high-production values of a fashion video, a company can

display this season’s must have products – the difference being that the products in the

video are clickable (even as the video plays) and when clicked, bring the viewer to the

product pages of the selected product. 

Emergence of B2B

The Indian e-commerce story so far has been dominated by B2C e-commerce companies.

However, there is one trend that has yet to really hit the subcontinent, which we believe will

begin to feature more and more in 2013. This trend has revolutionized how business is

conducted in the developed world and the numbers involved are incredible. The trend is B2B

e-commerce.

In the 2012 US Dept. of Commerce report, B2B commerce in the US was measured at $3.7

Tn. While this figure includes transactions carried out over EDIs (eg. how Wallmart manages

electronically its inventory requirements with 60,000+ suppliers) the figure is very much

representative of businesses adopting e-commerce en mass. In the same report, B2C e-

commerce is measured at $400 Bn. A huge figure on its own, but it is a mere 1/10th the size

of B2B.

Indian B2C e-commerce is currently valued at $14 Bn, with many commentators predicting it

to reach $60-80 Bn by 2025. But looking at the US, the giant opportunity of tomorrow in

Indian e-commerceis clearly B2B. Companies that can win the loyalty of businesses and

leverage technology to assist them in their efforts to increase efficiency will be able to grow

to a scale that will be the envy of the B2C portals. Businesses buy larger basket sizes, and

they buy more often in comparison to consumers. The question is not ‘if’, but ‘when’ this

macro trend will really hit India.

We believe that the B2B e-commerce wave could soon hit India because of the educational

role that B2C has been playing for the past 5 years. The advancement of B2B e-commerce is

very much supported by the prior establishment of a strong B2C market. In a nascent

market like India, potential business buyers may be resistant towards embracing e-

commerce for reasons of trust, skepticism, or just general inertia that sometimes hampers

the adoption of would-be beneficial innovations within an organization. However, with the

penetration levels of B2C e-commerce increasing month-on-month, and with 800% growth

over a 5-year period, B2C e-commerce has reached a point of critical mass. In 2012 e-

commerce has very much been on the business agenda, and many business professionals

have by now bought online - it’s much easier to hand over Rs. 200 for a book on your first

online purchase than it is to spend several lakhs on a bulk order consignment of laptops for

your business. But those first few B2C purchases, if a satisfactory experience for the

customer, are laying the foundation for adoption of e-commerce in Indian business by those

same customers who have gained comfort with e-commerce via B2C. It is certainly our

experience with the majority of our customers. Almost all have prior experience as B2C

customers with the established players. So not only are they well-educated about e-

commerce, but they expect nothing but the highest standards of customer service.

Companies of all sizes are adopting. While we serve smaller orders via our website very

efficiently, we’ve gone an extra step further with our corporate microsite offering for large

businesses: we offer tailor made e-procurement solutions for large businesses to streamline

their operations in this area.

And if today’s business professionals are gradually adopting e-commerce, the business

leaders of tomorrow are already full-blown experts. The age profile of Indian Internet users is

overwhelmingly young: 75% of users are in the 15-34 age bracket. Today’s young Indian

web-users are already booking cinema tickets, and buying shoes online and are extremely

comfortable using e-commerce. The same individuals who are buying movie tickets and

shoes for themselves today, will be the MDs and admin buyers of tomorrow – thus, even if

the B2B e-commerce wave does not break fully in 2013, its arrival over the coming few

years is very much certain.