Business Ideas for the digital India
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Loading ...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. However, everything else being equal, a differentiated idea will help further improve the chances of success as long as you are filling a genuine gap in the marketplace. So here are the categories in which I will be posting new business ideas – my hope is that some of these ideas turn into reality and when they do, the overall eco system for eCommerce will significantly improve, resulting in a far bigger pie for everyone.
1. Community based shopping:
In this category, I will be posting some ideas around the next generation of online shopping which will leverage the online communities at all levels of ecommerce value chain. We have already seen some of the successful Web 2.0 models for India outside the online shopping space; it is time now to look at some interesting models that fit within the online shopping space.
2. Content Management
As more players enter the eCommerce market, companies will seriously need to reconsider their content management strategy. There will be an obvious need for third party service providers who can provide value added content for products (e.g. detailed attributes, images, videos etc.). There is no need for eCommerce companies to keep this function internal, and outsourcing it to a mature service provider might help improve the overall user experience, and ultimately, the conversion rates. I will be discussing some business ideas for service providers who can rule this virtually uncharted space.
3. Aggregation Platforms
We are already seeing activity in this space. Portals like TolMol.com have started seeding this market and influencing customer behavior around online price comparison. However, is that enough? Are there additional opportunities to leverage the motivations of Indian consumers, and improve standardization across online retailers? I believe so, and I will be sharing specific opportunities around price comparison and other aggregation platforms.
4. Online Marketing
Ok - this is not a new concept and companies have been doing it for years. The question is whether traditional approaches such as SEM or banner ads are enough? What are the opportunities for service providers to offer end to end services around execution of online marketing programs as well as measurement of the benefits? I believe there are significant opportunities in this space, and will share some specific concepts.
5. Analytics Services
Most online retailers use some type of web analytics product – whether it is Google Analytics, Omniture or Web trends – a lot of data is being collected. However, the question is what is being done with that data? What can service providers do to help business managers of these online retailers make more informed decisions and act on this data?
6. Fraud Detection & Security
Credit card fraud is a concern for most online retailers as well as banks. There is a lot of work being done in India such as 3D Secure to minimize the likelihood of fraud. However, I would argue that although several measures have been incorporated into websites to ask additional questions during the payment process, not much thought has gone into the implications of these additional steps on the user experience. How many “authentic” users are abandoning their online check out process because of additional “speed bumps” that they have to face? Are there opportunities for service providers to offer “non intrusive” services that can help detect fraud, and at the same time, improve the overall customer experience. I believe there are, and I will share some specific examples in this category.
. Specialized e-Commerce offerings
Today, with the exception of few online portals, most of the shopping portals look and feel the same. Most of them carry similar assortment of products, at similar price points and a level of customer experience that leaves a lot to be desired. So what are some specialized/focused ideas that can target specific demographics or unique customer needs? In this category, I will be discussing various opportunities for the NRI community, online concierge services, assisted e-commerce opportunities for mass market etc.
8. Loyalty programs
Today, the online players don’t look at loyalty programs as a strategic differentiator or a tool for building lifetime relationship with their customers. Most of the programs available today offer basic point accumulation and redemption options. This area has a lot of opportunities for 3rd party service providers who can help execute integrated loyalty programs that reward the most profitable customers of online retailers.
9. Logistics/ Customer Service
Although this category doesn’t seem as exciting as some of the categories above, this is certainly a category that can help in strongly differentiating an online retailer from others. Ironically, this category has received the least amount of focus and investment among online retailers in India. There are several business models and opportunities available for service providers which can help online retailers significantly improve their overall service levels and consistency in execution.
I do hope the ideas that I will be posting during next several weeks will provide food for thought to entrepreneurs within this online space. So stay tuned and get your thinking hats on – let’s collaboratively build upon these ideas to help drive eCommerce in India to the next level.
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February 5th, 2008 at 12:57 am
I found your site on google blog search and read a few of your other posts. Keep up the good work. Just added your RSS feed to my feed reader. Look forward to reading more from you.
- Sue.
February 5th, 2008 at 10:44 am
Great job done! I would love to read more from you.
February 5th, 2008 at 7:50 pm
Great article. One thing I have observed is that, thanks to frequent news items about online fraud, phishing etc, potential users are put off..By ‘potential users’ I refer to say people in 40-50s who have their children work on internet at home, but are scared to try it out themselves..
So, what I see is that for an online model to work successfully through these diverse users, it is has be “part-online, part-offline” model.
How about ‘order online, pay offline’ kind of services. I know this is not something revolutionary and there are already several websites doing this (including matrimonial sites like Jeevansathi). But I see this model as the one that will make online penetration all the more successful..
February 6th, 2008 at 2:29 am
Great post Darpan. I am myself very interested in the ecommerce space in India and totally agree with you on the gaps that you point out that need to be filled. Although one question that I keep coming back to is regarding the time horizon. Given the relatively slow growth of current Internet companies, what is the time frame that one should be looking at when ecommerce will really take off? Is it just because of these inefficiencies that we are lagging or is there a more fundamental problem - like broandband penetration, etc.? Will pure play Internet models ever work in India or should we be looking at m-commerce as a necessary component in the business model?
February 7th, 2008 at 8:52 am
Thanks Sue & Khushi!
Anand, you mention one of the big opportunities for the Indian market. I see assisted eCommerce as one of the primary vehicles to grow the adoption and offline payments play a large role in that. This is the reason why COD (Cash on Delivery) payment method has a much better adoption in India compared to other countries.
Madhur: You make a great point that bigger issues related to broadband adoption need to be addressed for eCommerce to really take off. However, my perspective is that entrepreneurs should not wait for that penetration to happen because of following reasons -
1. Several models (in the form of assisted eCommerce) are viable even today with a low PC/broadband penetration.
2. If we believe that the basic fundamentals of eCommerce are correct then it is only a matter of time that the other factors will become favorable for eCommerce adoption
3. Sites like Orkut are doing extremely well, even with a low internet penetration in India. This suggests that if there is right value proposition for the customers, economic rents can be had even in today’s environment.
Finally, I will say that starting an eCommerce venture in today’s environment is certainly not for the faint of heart. There will be ups and downs in the eCommerce adoption and the cash flow will need to be very tightly managed - but at the end of day, ventures that have created a positive presence (read: a trusted brand) will have significant early mover advantage over others.
February 11th, 2008 at 11:46 am
[...] Munjal has this great post on ecommerce in India, where he talks about what are the gaps that need to be filled and what it might take to create a [...]
February 13th, 2008 at 9:59 am
[...] 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 [...]
February 13th, 2008 at 12:10 pm
Awaiting for your next blogs. As you have shown light to the people who wants to create a niche being entrepreneurs, I would like to share my piece of information that I came across which will definitely be helpful. I found a link forwarded by my friend which helped me to make my network for my career growth. SiliconIndia is the site which helps find business contacts, search jobs, create groups, write blogs, and get updates on business & tech news with lot of other valuable information. Maybe you can check it out too. http://www.siliconindia.com/register.php?id=KTwAeszh
February 14th, 2008 at 1:44 am
Excellent post Darpan!
3. Aggregation Platforms: I see immense opportunity in this segment. For online price comparison to succeed, the big online retailer in India will need to provide their data through Web Services or through other medium like XML feeds, CSV etc. Currently none of the retailer are willing to share their data or they do not see the value in it. Tolmol is doing a great job being the first mover in this space. But I think that they are manually searching different shopping portals and keying in data to show some comparison. With this approach comparison site may not scale up to return rewards.
I look forward to your next post.
Cheers,
Praveen
February 20th, 2008 at 6:22 pm
Good information.Thanks
March 4th, 2008 at 4:06 pm
Hi Darpan,
I was wondering if you could shed some more light on the state of “Personalization” of shopping portals in India.
I think that amongst other failures, personalization is another area where most of the Indian portals have failed.
By personalization I mean , going beyond the Welcome message and actually serving data and offers based on users past browsing pattern and demographics, something that Amazon does pretty well.
The portal managers need to realize that every “session” is an important interaction with the customer and that it should be leveraged to the max. Sadly, no one seems to realize the importance of the same in India .. At least none of the bigger portals.. Have you come across any Indian site that handles personalization pretty well??
In case of the international scenario, is there any one better than Amazon in this domain.. ??
Do let me know your thoughts on the same.
Regards
Sumit
March 7th, 2008 at 2:00 am
Thanks Pooja and Praveen for your comments.
Sumit, I do agree that the power of personalization hasn’t been tapped within the Indian market. In fact, if done right, personalization should not only drive the recommendations on the site, but should also help in sending the appropriate types of offers and product recommendations via other channels such as email. I will be soon writing a dedicated post on opportunities related to personalization and recommendation engines in the Indian context.
April 15th, 2008 at 9:54 pm
I would like to add Product Sourcing as one of the Item which can be discussed when we are discussing ecommerce in India, we dont have many places where we can source the products from, that is why all players are selling the same products with same price points and terms.
Would like to hear your inputs on that.
Anyways an Excellent Post
April 21st, 2008 at 1:48 pm
Dear Sir,
These are indeed great ideas.
What I would like to know is what kind of investments are required to execute these kind of e commerce ventures and what will be the approximate investment required for the same. Is there any qualification required for executing these projects and how long will it take to get the results.
Reqards,
Cdr Vishwas
May 24th, 2008 at 11:12 am
of the above ides ..content management seems interesting ..will appreciate if you can delve more into this topic..
regards.
June 8th, 2008 at 2:55 pm
i appriciate your posts and request you to provide more information on this topic