eCommerce Blog

I recently ordered a Boston Acoustics subwoofer from an Amazon marketplace seller because it was significantly cheaper than buying directly from Amazon or from a local retailer. 15 days later, all I hear is a whistling sound from that piece of equipment. Now I am not a big audiophile but if all I hear is a whistling sound while watching a loud thriller movie, I can tell there is something wrong with the sub. I know – hindsight is 20-20 but I should have probably purchased that item from a local retailer so I could have at least returned that 40 pound brick without much hassle. I can’t even imagine packing such a heavy piece of equipment and shipping it back to a 3rd party marketplace seller.

Marketplace concept has been fairly common with online retailers such as Amazon.com and buy.com. However, it seems that multi-channel retailers are also joining the bandwagon. Sears and Walmart have both opened up their online platforms to allow third party sellers to list and sell their merchandise. This definitely opens up an alternative source of revenue for retailers and in these trying times, who doesn’t want to have additional revenue sources. Read the rest of this entry »

Over the past several months, I have been in touch with several bright entrepreneurs who have recently launched or are planning to launch an eCommerce related offering in India.  I am really excited that we have so much focus and energy around eCommerce and I really think that the landscape is about to change in India.

There is a perception out there that eCommerce is not really picking up in India and that companies are struggling to scale up their offerings. There is no question that the overall market is still pretty small in terms of numbers. However, we shouldn’t ignore that all factors are slowly moving in favor of eCommerce. Retail is getting more and more organized, availability of global brands is larger than ever, internet penetration is climbing and some internet retailers have started to focus on customer experience as a way to differentiate. Most importantly, and I can personally attest to this one , there are some extremely talented individuals who have recently launched new ventures and are passionate about making a big difference in the eCommerce space in India.

I’ve been thinking about this for a while – Read the rest of this entry »

Wow! What an interesting year! This economy has had a sobering effect across all industries, especially the online industry! Several businesses that appeared to be immune to any down-turn are now thinking hard about survival. However, there are signs that the worst may be behind us. Little rays of sunshine are visible in the form of new ventures and start-ups that have done extremely well despite of the recession. I think the last 12-15 months have forced everyone to think hard about no-frills business models and getting back to basics. More than ever, these are the times that require a strong commitment, passion and a strong focus to get across the other side of this storm. I strongly believe that in the next 3-4 years, when we look back, this would definitely be a pivotal year for the online industry with highly sustainable and healthy online business models emerging from it.

I’ve been following the US and India eCommerce industry very closely during the last several years.  I have met quite a few talented individuals who are either in the process of or have already built a good online offering. However, I feel there is still a huge opportunity to take the online shopping to the next level and this may be just the right timing to go after that opportunity.

I have now decided to focus on building a next generation shopping portal for US and India market that combines the power of communities, user content as well as product customization in a game-changing way. Read the rest of this entry »

It is about 6 weeks before Christmas. One can feel the holiday spirit in the air. However, something is missing. Even though one can see people shopping in the malls, there is a general gloominess in the air due to the worsening economy. The coming months look certain to bring more turmoil. Even if events do not turn out to be quite as bad as those of recent weeks, it is still highly likely that we will – in the words of US treasury secretary, Paulson – live in “extraordinary times” for quite some time.

Obviously this is not good news for online retailers. Although the US online retail has been hit much harder, there is clear evidence that eCommerce in India is slowing down as well. The question has now shifted from “will the internet economy be affected?” to “how bad will the internet economy be affected?”

There is no question this downturn will be deadly for a considerable number of internet startups. However, some of the victims will not be killed by the recession itself; many would have inevitably failed because they didn’t have a sound, fundamental business case to begin with. A recession that makes it harder to generate revenue and to raise additional capital will simply speed up the dying process.

However, I am an optimist. I think there are plenty of reasons to believe that Read the rest of this entry »

The stakes are getting high in the eCommerce space in India. As more and more online retailers enter the market, they are driving up the cost of customer acquisition. Although this level of entry in the eCommerce market is good from a long term perspective, the challenge is that most entrepreneurs don’t have the resources or capital to wait for years before they can see some signs of profitability. The good news is that there are still some business models out there, which are mostly untapped. If you execute these well, you can not only create uncontested market space, you can make it difficult for others to compete in the game. These ideas do require some innovation –however, I am not talking about a significant technological innovation – I am talking about innovation in service offerings that can help you leap outside the traditional industry boundaries. I have written most of my articles around B2C opportunities, in this article I will focus primarily on the B2B opportunities within the online space in India.

So what are some of these ideas? Well, before discussing the specific ideas, I want to start with some of the key traits of these business models. Most of the ideas that I will discuss have one common theme – low cost of initial acquisition and high switching costs. Read the rest of this entry »

The online shopping space in India is getting more and more crowded . Even though, the overall pie remains small, today’s customers have more options than ever when it comes to online shopping. This certainly is good news for aggregation platforms such as price comparison engines. The more options shoppers have, the greater value they would see in platforms that offer a one stop comparison of products and prices across retailers. Not surprisingly, several comparison shopping platforms have been launched in the Indian market. Tolmol.com and Bechna.com are the two most prominent ones. So if we have these comparison shopping platforms available, why aren’t people using them? Or are they?

Today’s Environment
Before we try to answer these questions, let’s try to explore the value proposition offered by these comparison shopping platforms. At the most basic level, a comparison shopping engine must deliver on a promise of accuracy, and unbiased price comparisons across a wide breadth of online retailers. The overall value proposition offered by these platforms is to help customers save time in making more informed shopping decisions. The question is how well are these comparison shopping platforms able to deliver on these basic promises? To explore this further, let’s take an example. Suppose, you are looking to buy a Nokia N70 phone – instead of visiting individual shopping sites separately, you decide to start with a comparison shopping platform like Tolmol.com. Performing a search for N70 on Tolmol.com quickly displays about 9 different online retailers selling this product. So far so good, however there is one little problem. Read the rest of this entry »

It is human tendency to resist change. The most natural instinct is to continue doing things the old way. And when changes are implemented, we try to fit them back into the mold because of our comfort level with how things used to work in the past. That is kind of how online shopping has evolved. Even in the western world, not many physical retailers believed in online channel during its infancy – they looked at it more as a distraction. However, when they started understanding the potential of online shopping, more and more retailers began to build an online presence. However, they did everything in their power to ensure that the online shopping works as close to the physical channel as possible – whether it was pricing decisions or merchandising decisions or logistics – everything was designed to work similar to how it works in the physical store. Most of the online retailers overlooked the power that internet offers around connecting individuals so that they can help each other in making better purchase decisions. Since then several new age online retailers have come up and have started capitalizing on the true potential of internet, and the role it can play in changing how people make their purchase decisions. These new players have started questioning the well accepted norms such as “category managers are the ones responsible for selecting the product assortment and making the pricing decisions” – Why should an internal category manager’s intelligence be better than the collective intelligence of hundreds of thousands of online users – who use these products day in and day out?

This question is the premise of my topic today – a topic that is near and dear to my heart and the one that happens to be first in my series of new venture ideas – Community based shopping. Before we go further, let me just clarify what I mean by community based shopping. At the most basic level, this describes an environment where online communities or users play a key role in helping other people make their purchase decision. As you read this post, I am sure one thought would certainly go through your mind – is India ready for this? At a time when internet hasn’t reached the home of a common man, when users aren’t even able to do their own online shopping, how can we expect them to help others shop online? This is a good thought and at a high level, it makes a lot of sense. However, we really need to dig a bit deeper to understand the real opportunities.

For a few minutes, let’s keep the issue of internet adoption in India aside (I promise, I will come back to it later). Let’s just evaluate, at the most basic level, whether the concept of social shopping makes sense. If we look at most online players today, the notion of human touch is missing from the online shopping experience. For all its power, Google can’t tell shoppers what’s cool or what their friends or like-minded consumers recommend. Same is the case with majority of the shopping sites. A search for men’s shoes on a typical shopping site Read the rest of this entry »

As the internet penetration reaches the average household in India, the digital eco system would need to evolve, opening up several gaps in the value chain. If you are an entrepreneur or dream of becoming one in the near future, there are significant opportunities related to internet/eCommerce that might give you a first or early mover advantage for the Indian market. Until now, my blog has focused on discussing trends, opportunities and best practices at a macro level. Now, however, I think it is time to make things a bit more interesting, and start focusing on specific concepts or business ideas that can be monetized in the Indian context. Over the next several weeks, I will be posting a series of blog articles which will showcase different business ideas in various categories related to internet/ online commerce in India.

Needless to say that these are just ideas and an idea alone cannot make a venture successful. End of the day, it is about execution and the team. If you have a strong team, with solid execution, the chances of your success are significantly higher even if you don’t have a killer/unique idea. Read the rest of this entry »

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. Read the rest of this entry »