eCommerce in India - A blog by Darpan Munjal

The online retail environment in India is eerily quiet. The overall online pie is still very small. Broadly speaking, Indian consumers aren’t shopping online. The distributors or local vendors still look at the online channel as a drop in the bucket. New online retailers are slowly emerging – however Indian ecommerce just can’t seem to hit its stride. What does this all mean? Is online retailing not for the Indian market? Are the cultural preferences of Indian customers so unique that ecommerce will never achieve a mainstream status? Although the current state paints a very somber image for eCommerce in India, it reminds me of the time when we went on a vacation to Florida, only to find out that the area was about to be hit by a category 3 hurricane. Standing in balcony of the hotel room, I could feel an uneasy quiet. Wind was calm however I could feel something big was about to happen. Two years later, I find myself standing on the verge of another perfect storm – a storm that will change the face of online shopping in India.

It is not a mystery anymore that the retail industry is going through a significant organization in India. Some would argue that this opens up more exciting options for consumers to shop in a physical store, which would further impact the adoption of online shopping in a negative way. Fair argument, however, I would like to share some specific reasons why I strongly believe that a reverse phenomenon is inevitable – organization in physical retail will fuel an explosive growth of online ecommerce in India.

Why has eCommerce adoption been slow in India?
Before we look at the factors that will drive an explosive growth in eCommerce, it is important to look at why eCommerce hasn’t taken off so far in India. Continue reading �

US based online shoes retailer Zappos.com was mentioned in this story that it has reached 6 million paying customers.  Although this is a major accomplishment, what is even more amazing is the fact that three fourth of shoppers who make purchase on Zappos.com are repeat customers. This got me thinking – how many retailers use “repeat customers” as the metric to measure success. Most of the online retailers that I am aware of think of Revenue or Gross Profit or EBITDA or net-profit as a proxy for measuring success. These metrics are certainly better than the dot com days in 2000 when online businesses were happy with just measuring the online visits – primarily because they didn’t have any real sales to report on anyways. However, are these metrics telling anything about how the customer’s purchase experience has been on the site? I would argue that these metrics are lagging indicators of performance. In other words Continue reading �