In the summer of ’99 a thousand i-entrepreneurs bloomed. Fabmart and Firstandsecond.com wanted to be Amazon — the giant retail store — of India. Rediff was selling knick-knacks on its e-commerce channel. Sify too joined the bandwagon. Apnaloan was promising to ‘sell’ loans online. Shaadi.com wanted to find your dream “other”. And then on April 4, 2000, Nasdaq crashed.
The Second Coming
Digital technology has changed many things; the way we communicate, the way we work, the way we buy things. Today’s young netizens do many amazing things like buying pizzas to selling shares, doing banking, buying tickets, planning holidays and paying bills online. Clubbed with it that we are moving slowly but surely towards a capitalist economy means the consumerists are taking over.
Retailers and merchants venturing into e-commerce are leaving no stones unturned to make sure that the consumers have a great experience. Most of the e-commerce ventures now offer you a choice of Payment Gateways as well as the flexibility to pay cash on delivery.
The success of ecommerce in India is inevitable. Physical stocking costs money and real estate is not cheap. And even if it is, getting footfalls in the wake of poor infrastructure, more and more traffic and lack of time is going to become a significant challenge.
The essence is and will continue to be customer experience. The key for retailers here is to create a Blue ocean – carve out a new market – a market yet untapped! Make people aware of the fact that there are sellers who are willing to get stuff you like to your doorstep. And they are willing to take it back too, if you don’t like it. In addition, they give you substantial discounts too. Make them used to making online purchases.
Ecommerce in India has evolved over the past decade in terms of size. Indian e-commerce market will gallop at an impressive growth rate of 47% to over ₹ 46,000 crore in the 2011 calendar year (US$ 10.6 billion).
Indian netizens have emerged as the third biggest credit card users globally (84%) for online purchasing, next only to the Turkish (91%) and Irish e-shoppers (86%).
India has over 3,311 e-commerce hubs from all 28 States and 7 Union Territories. The Top 5 States with the most transactions are Maharashtra, Delhi, Tamil Nadu, Karnataka and Andhra Pradesh.
There are over 1,267 rural hubs online with 1 out of every 10 purchases from rural India as well as 1 out of every 20 sales from rural India.
The journey of online spending that started with an increasing number of buyers of travel and holiday plans in the last decade has now extended to an increase in spends on household appliances and luxury products. While segments like apparel and luxury products have registered unprecedented growth in 2011, jewelry, electronic appliances and hardware products have shown promising growth trends as well. Indian consumers are showing greater appetite to transact online, fueling the e-commerce boom.
With e-commerce acquiring greater social media clout, social media platforms are becoming the anchors that are triggering the onset of greater social commerce across categories. For instance, deals on e-commerce site gets shared and re-tweeted on social media. This generates a lot of buzz for these brands.
Even travel websites depend on their social media fans to further reach out to the online target consumers. Then there’s the organized brick and mortar retail brands like Shoppers Stop jostling for space online alongside pure play e-tailers. E-commerce sites will acquire more social ‘skin’ and social sites are extending into the ecommerce space to use the power of personal influence and micro-networks.
New e-commerce sites are popping up all over the place in India, and they’re being funded pretty quickly too. Some pundits assert that it is a bubble but for the time being, there is money in that bubble.
We have also seen the growing fondness towards Facebook, so a gradual evolution of e-commerce to social commerce seems like a logical next step. We have already seen lot of e-commerce brands such as Fashion and You, Flipkart, Fetise, and MyGrahak, doing an amazing job on social media.
However brands will also have to understand that social commerce means far more than creating a Facebook fan page. They will have to offer fans with a positive experience, keeping the social aspect in focus, evolving from just liking and commenting on products.
Social media facilitates a Zero Moment of Truth
The principal role of social media in commerce and marketing is ‘social utility’ – helping people shop smarter with their social intelligence and profit from social situations. In other words, don’t offer campaigns – offer social utility; your social strategy should be about using social to help people discover and decide smarter; i.e. Assistive Consumer Technology.
Social media facilitates a Zero Moment of Truth (pronounced zee-mot), which is the ‘borrowed experience’ of someones’s second moment of truth when shared; i.e. product experience shared online. Zmot is essentially the familiar ‘word of mouth reality check’ humans have used since they first started talking; a wise man learns from the experience of others – a fool by his own.
Zmot acts as first reality-check in the consumer journey, it is the gate-keeper and agenda-setter for customer acquisition. 25% of Dell’s new customers are the result of a positive Zmot. That in turn means that your advertising should line up with the product experience – since a shared experience is what links advertising to personal experience. Start with the smile of product experience, and work back.
ORM becomes important
With more and more brands opting for social, brands will need to become more careful about their online reputation. 2011 saw Vodafone fail in this area. Having witnessed such catastrophes, other companies will be trying to avoid these kinds of mistakes in 2012.
This growth story is albeit not devoid of challenges that the industry is confronted with, both global and local. As more global players enter the e-commerce space, lack of common taxation rules can hinder growth in future. In the online shopping industry, especially, the need of the hour is a uniform goods and services tax (GST) across the country. Currently, inter-state movements of products often pose a problem, given the different taxation rates. This would need to be resolved in order to extend the reach and improve the e-commerce experience.
On the local front, online shopping predominantly remains a practice of urban and middle class consumers. Though consumers in small towns have started using Internet actively, conversion from visitors to shoppers would take some time. Then there is logistical and supply constraint for retailers. While online shopping is expected to find some share in smaller Indian towns too, increasing supply of products and lack of logistics like warehouses can be a challenge for retailers.
“Indian e-shoppers will have a good time getting great deals and services online, online retailing will explode in 2012 and beyond. More users will use the Internet through smart phones, tablets, net books, etc. With this, there will also be an explosion in usage of mobile applications”, says Anurag Gupta, Managing Director, DGM India Internet Marketing Pvt Ltd.