E-COMMERCE SPECIAL Click and buy

E-COMMERCE SPECIAL Click and buy 





With numerous benefits of shopping online, aided largely by easier access to technology, e-commerce in India looks set to touch record numbers this year.

According to an ASSOCHAM Deloitte joint study released this year, e-commerce has emerged as India's new sun rise industry, and is set to cross the US$16 billion mark in business by the end of 2015. The study, entitled `Future of e-Commerce: Uncovering Innovation' reveals that the digital commerce market in India has grown from US$4.4 billion in 2010 to US$13.6 billion in 2014 and is likely to touch $16 billion this year.

It's evident that Electronic Retailing, or E-tailing, is reshaping the retail sector in India in a manner that has affected the brick-and-mortar businesses. Sid Taparia, CEO and founder, Voxpop.com says, “We are a completely online-based business, which gives us access to a larger consumer base. This would've been difficult to reach through a brick and mortar setup, especially in our product category.“ Currently, Voxpop.com offers a range of merchandise, which includes t-shirts featuring various themes. “Other benefits such as safe transactions, convenience, flexible payment options including cash-ondelivery (COD), a return policy, attractive offers, etc. are making online shopping more comfortable as compared to offline shopping,“ says Praveen Sinha, co-founder and managing director, Jabong.com, pointing to a ruling trend in retail.

PRICE CONSCIOUS

The price-sensitive nature of the Indian buyer is legendary. “The Indian online consumer is extremely price conscientious. They research several price points to make sure they are getting the best deal,“ says Rohina Anand Khira, owner and head designer, AA Living. E-tailers have often been accused of gaining market share at the cost of profit. “Currently, we are in midst of a price-war. However, this phase won't last forever and we will need to consolidate, which will happen over the next 18-24 months,“ agrees Aasheesh Mediratta, CEO, Fashionandyou.com. He predicts that the Indian e-market will evolve like the global e-market, with clear winners emerging.

“We do strive for lowest prices and fast deliveries, but that is not our anchor. Our anchor is design,“ says Vikram Chopra, CEO and founder, FabFurnish.com. Defending the price issue is Peyush Bansal, CEO and founder, Lenskart.com. “Most e-tailers, today, are able to offer better discounts because of their scale and savings in overhead and infrastructure costs, which are passed on to customers as better discounts,“ he explains.

NOT WITHOUT CHALLENGES

Logistics, especially third party logistics, is an area that e-tailers have to tackle head-on. According to Suchi Mukherjee, founder and CEO, Limeroad.com, a major challenge is that not many e-tailers are focused on building brand loyalty. “One must find a value proposition beyond price that gives customers an incentive to return,“ adds Rebekkah Kumar, founder and director of Fourseven.in.

Online marketplaces for luxury goods face their own set of problems.“Lack of immediate gratification and touch and feel are barriers, which could be overcome with multi-channel presence and augmented reality technology,“ explains Gaurav Singh Kushwaha, founder and CEO, BlueStone.com.

“There are several issues such as reliable third party logistics, support infrastructure, distribution net work, customer friendly and se cure payment systems, buying a habits based on value and quality rather than price, reducing conversion cost and yet building brand awareness and trust,“ says Kumar. Kunal Bahl, cofounder and CEO, Snapdeal.com, points out that Internet penetration in India is only about 20 per cent as compared to 50 per cent in China and America. “Multiplicity of languages and high COD transactions are the other issues,“ he states.

While these challenges remain, the e-commerce industry is already one of the most sought after investment choices (think back to Ratan Tata's personal investment in the online furniture company Urban Ladder). “Most businesses start with huge risks.Customers will choose the best option and businesses will run only if profit potential exists,“ asserts Sinha.Will this initial burst to strengthen the platform thus continue? Only time will tell.

Dhanishta Shah

ETP30JUL15