eCommerce in India - A blog by Darpan Munjal

Last week I flew back to Chicago from Delhi and although I cant really say that I enjoyed any part of that 14 hours + flight, I did get a lot of time to think about the cultural differences between American and Indian consumers. For retailer to be successful in India, it is important to take into account these differences and customize the offerings to better meet the motivations and preferences of the Indian customer.

First and foremost, Indian customers love to touch and feel the products before making the purchase decision. This is one of the major disadvantages for an eCommerce environment where the touch and feel aspect is almost missing from the shopping experience. However, there are technologies and solutions that the retailers can implement to help reduce this gap. For example, Endless.com does an outstanding job of offering high resolution imagery and dynamic HTML to help customers look at every minute detail of the product before making a purchase decision. Augmenting this information with detailed product description, specifications as well as unbiased customer reviews can actually serve as a good proxy for the physical product.

2. Love to show off

One of our neighbors in

India invited us for dinner because they wanted to show us the brand new LCD TV that they just purchased. One of the traits of Indian culture (especially northern Indian) is that people love to show off what they purchase. Whether it is that expensive piece of jewelry or that new car or the latest home theater system, a purchase cycle is not complete until the friends and neighbors have seen and appreciated the product. An online retailer can provide a channel for its customers to show off their purchases to the virtual community and get their instant feedback. In addition, these online lists can also help other customers make their own purchase decision. Kaboodle.com does a good job of letting communities create the list of products and share with others.

3. Big Brother is watching

As my neighbor was demonstrating every excruciating feature of that LCD TV during the dinner, he inquired about my job. When I told him that there is a huge opportunity for eCommerce in

India, he said with utmost confidence that eCommerce wasn’t going to fly in

India and that I should seriously consider moving to a more “stable” job. After considering whether to take offence to what he just said or to find out more, I politely asked him why he thought that eCommerce wasn’t going to fly. He explained that most people wouldn’t consider buying online because of concerns that it might leave an evidence of purchase and the tax department will come after them to disclose the source of their income. He did have a point – a large number of customers prefer to pay via cash for this very reason. I actually see this as a huge opportunity – online retailers can target this group of customers by offering completely anonymous checkout process and by advertising forms of payment such as Cash on delivery, Demand Draft etc. so that the online purchase process can be as anonymous and as close to a physical store purchase as possible. In addition partnerships with local dealership can be developed to offer “buy online, pickup in store” capabilities which can help in bridging the gap between online and B&M channels.

4. EMI means more than Electromagnetic Interference

Traditionally, Indian customers have been fiscally conservative and they have stayed away from financing and loan options. However, the boom in Indian economy and the easy availability of financing options has made purchasing a lot easier for the middle class segment. EMI or Equated Monthly Installments has been a welcome addition to the Indian vocabulary. Online retailers can significantly improve the conversion for big ticket items by offering creative financing deals so that more and more customers can afford the products.

5. Bargain, where?

Indian customers love to find and shop for bargains. However, strategies like Hi-Lo pricing are very rare to find in the Indian retail industry and the product prices remain fairly static for a long time. Retailers can make a significant impact by promoting few “image” items at a significantly low price point and then by using Hi-Lo pricing to offer a large number of items at promotional/discounted prices that change on a day to day basis.

By customizing the offerings to the Indian context, online retailers can significantly improve the adoption of eCommerce in

India. As for me, an unofficial benchmark indicating strong adoption of eCommerce will be when my neighbor invites me for a dinner to show the new home theater system that he purchased online!