Apart from booking flight / train tickets/ paying bills (as tht's
cumbersome process offline), buying books from amazon (after noting that the
book is not available at local book shop) or booking movie tickets(it's cool to
surprise your counterpart with the "smartness" of "online
booking") the country is not yet comfortable to transact online. Reliability is the core, that lacks currently. Then
comes the after sale service... replacement as well as smooth /
uncorrupted money transaction. online business has to earn the faith of
people.. As stated by the blogger Sriram Vadlamani " I have booked train tickets on IRCTC, bus tickets on Redbus and ordered books on Flipkart.
That was a neat little circle I have drawn around me for eCommerce.
For the first time, I came out of my comfort zone and ordered a Samsung
camera on Yebhi.com. What followed is my biggest nightmare and probably the nightmare of many consumers as well...."
Zinnov consultancy report has placed e-commerce at only 12 per cent of total retail sales in India.
here's a report as published in The Hindu newspaper:
Only a small fraction of the roughly 5 million Internet users in the late 1990’s even transacted online. Faltering dial-up connections and text-only browsing made the purchasing process cumbersome. Credit card usage was limited to a few, and even fewer were ready to disclose their card details over the Web.
Zinnov consultancy report has placed e-commerce at only 12 per cent of total retail sales in India.
here's a report as published in The Hindu newspaper:
Only a small fraction of the roughly 5 million Internet users in the late 1990’s even transacted online. Faltering dial-up connections and text-only browsing made the purchasing process cumbersome. Credit card usage was limited to a few, and even fewer were ready to disclose their card details over the Web.
The economics of online commerce, however, have changed so much
since then, that Rana Athreya is now attempting to cut the Gordian Knot of
e-commerce — setting up an Internet pet food store.
In 2011, Mr. Athreya co-founded Dogspot.in, a Gurgaon-based
start-up that shipped over 35,000 kg of dog food last year.
“A number of factors over the last decade have given us the
chance to prove that the pet category can be successful online,” said the
30-year-old entrepreneur. Dogspot.in hopes to break-even next month, ending the year with
sales of Rs.3 crore. Online pet stores are always mindful of the tale of Pets.com Inc,
a publicly-traded firm in the U.S.
that sold pet products online and then went onto become a popular victim of the
dot-com bust over 10 years ago. The California-start-up, founded in the late 1990’s, raised over
a hundred million dollars and went public in 2000.
After spending millions on marketing, it burnt through most of
its cash and laid off over 200 employees — eventually shutting down in late
2000. Today, Dogspot has 10 employees compared to the 350 that Pets.com
had and aims to become a $40 million company by 2015. A combination of factors, including a better ecosystem, increased
credit card penetration and a jump in Internet users has made this possible.
A new litter of online-only niche product stores, including
groceries, women’s apparel and sporting goods have emerged over the last two
years.
Backed by venture capital firms in some cases, these start-ups
represent how the economics of selling merchandise over the Internet have
evolved since the late 1990s. Over the last ten years, the cost of almost every
aspect of launching an e-commerce website has plummeted.
Plummeting costs
A large part of dropping costs comes from the boom of a
tech-ecosystem that takes care of website creation, site hosting and the
servers that are required to create an e-commerce portal.
Overall, it is ten times easier to launch an online retail
business than it was a decade ago, says Suneet Manchanda, former Business
Development Head, SifyMall Ltd.
“Back when we were setting up SifyMall, the technology and people
who could build a website were hard to find. Furthermore, the companies who
could create it were expensive to source from, it was a costly nightmare,” he
said.
The rise of businesses such as Amazon’s web services allows
companies to rent computer power and storage, reducing the need for start-ups
to buy their own servers.
Mr. Manchanda said it cost anywhere between Rs.20 lakh and Rs.25
lakh to start up SifyMall and took over six months before it could go live.
Now, it would cost Rs.3 lakh and could be live in 10 days, eliminating the need
for investors or loans. Mr. Manchanda, last year, founded an online luxury
women’s apparel store (ladyblush.com).
Easier logistics
Another advantage is the growth of a cottage industry that helps
in logistics, mainly storing and shipping of products. A common complaint of
the Indian e-commerce industry is the huge damage and losses that companies
incur in shipping while using India Post.
New shipping start-ups such as Delivery.in or Chhotu.in, however, offer logistics that are
better tuned to the e-commerce industry by reducing damage losses to less than
one per cent, calling customers before delivery and charging their clients only
when they make a sale.
“Something that sets us apart from India Post or even major
courier companies is that we are a straight business-to-business company. This
allows us to reduce our capex, letting us charge much lesser rates.
“We are a natural logistics extension for e-commerce companies,”
said Navneet Singh, CEO, Chhotu.in.
“Right now, close to half of our customers are start-ups. Our
services complete this whole ecosystem that lets them really thrive,” he added.
According to Abraham Koshy, who founded an online sports goods
store last year, it took less than Rs.3 lakh to launch the company, excluding
buying inventory. He was able to hire outside software engineers to create the
website, shopping-cart system and paid a few thousand rupees for Internet
service. Setting up warehouses has also become relatively easier, with
third-party companies charging a storage and per-shipment fee, allowing
start-ups to reduce costs.
“It’s become increasingly easy to join the field without large
investment. Take a simple thing like payment gateways for example. The (payment
gateway) charges on customer credit card use have dropped from 6- 8 per cent to
around 2 per cent over the last ten years or so,” said. Mr. Koshy, who left his
job at Amazon Inc two years ago.
While competition has become increasingly fierce due to dropping
costs, there are already signs of consolidation among the bigger players in the
market.
Flipkart bought Letsbuy, a rival firm, for a reported Rs.100
crore. A few months later, Snapdeal bought online sports retailer
Esportsbuy.com, for an undisclosed amount.
A info-graphic by Track.in :
A info-graphic by Track.in :
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