With
all due respects to the e-commerce ventures...
The
survey reports by those fancy researches always show the graph of e-commerce
market India soaring northward, exponentially!!! No doubt everybody wants to
get a slice from this pie. But what
fascinates is everybody thinks they can get it easily, just because it is a
growing market. What does it take to start a online business? You may find step
by step guide to start an online business starting from 1. Create a logo with
any domain name available, 2. Host an open source or paid e-commerce engine
3.Run Google ads and spam campaign daily on mail and SMS 4.Start
shipping through any courier service and rake in profits. Even the Terms and
FAQs are copied verbatim. Try Googling them with quotes ;)
It
sure does seem simple and this is what 90 %(a conservative figure) of
e-commerce sites are doing. This is exactly the reason for many 'passionate',
'dynamic', 'Alumni from II (Insert your favorite alphabet) ' jumping on the
bandwagon with generous VCs giving them tickets. Now let’s analyze some of the
trends in this scene.
1. Creating Niche segment - Do this simple exercise.
Make a list of all the product categories and sort them according to
need-for-look-and-feel in descending order. On the top you will have Jewelry,
Home Décor, Apparels and on the bottom you have Books and Electronics and many
other categories lying in between these two extremes. Amazingly, the number of
e-tailers catering to all these categories from top to bottom is equally
distributed. The top ones try to cater to the niche segment and the bottom ones
think they have a large market to cater. Both are failing miserably, because
people do not trust sites on the top for their luxury needs and the bottom ones
cannot compete with each other on price. Some shut shop before anybody notices
it while some try to expand their product lines forgetting what they wanted to
be initially. Examples being daily deals site becoming an e-tailer and vice
versa and creating multiple domains for every segment.
2. Carrots - Register and stand a chance to win a
iPad 2. Pay Rs.50 and get Rs.500 off (90% off) on your purchase at
metoo-commerce.com. Needless to say, terms and conditions apply. Rs.250 off on your next purchase for every
referral is again a common strategy. Only people who think these strategies
work are the BD Guys. The reason they think it would work is that somebody
else is doing. Of course, who wants to be called old-school? There is
definitely a need to innovate in user acquisition, far more than accumulation
of likes on Facebook fan pages, again in return of Rs.500 gift points.
3. Some more signs - What should you say when ‘popular’
e-commerce site start selling bikes and cars online!!! Of course, you cannot
pay online for those but you can leave your phone number to get a prompt call
from the dealer. e-commerce or a wannabe craigslist, left to your imagination.
Open your spam folder and Google any e-commerce name you got email from, and look for the reviews. You will most probably find the reviews in 80/20 proportion, 80 being bad and 20 being good, among whom again 80 being engineered and 20 being genuine ones.
Open your spam folder and Google any e-commerce name you got email from, and look for the reviews. You will most probably find the reviews in 80/20 proportion, 80 being bad and 20 being good, among whom again 80 being engineered and 20 being genuine ones.
4. Daily Deals - The list won’t be complete without
this. Go to any of the daily deal site and take a critique look at the deals.
You may find hundreds for each city. Now read the details of the deal and try
to arrive at a price for the product/service. You can’t. Pay Rs.199 and for a
Health/Dental/Spa/Astrology/Vehicle service worth Rs.2999. Does it really mean
that the service is worth Rs.2999. No. There are hardly any deals that you can
call them as genuine deals. The reason that deal sites won’t work, at least for
now, is that we Indians are deal-hunters, not deal-givers.
So who's winning?
Hardly any
e-commerce player is making money. Still it is good for the ecosystem. There are
Web firms, ERP and CRM providers providing customizations according everybody's "unique" model. There are ad agencies and PR firms making money, not to forget
ads ka baap, Google. Courier services have found a new revenue stream while
newer ones are emerging exclusively for e-commerce. Of course, the customers
are able to get products cheaper, thanks to the price wars. It feels really
great to see many world-class SaaS companies starting up in India to cater to
e-commerce.
Future?
I completely
believe that e-retailing is here to stay. But once the tides are down, we will
know the reality. I give 2 years for this to happen starting from today. Only
handful will survive who have invested in infrastructure, including warehouse,
logistics, technology and payments. Rest will come out of their ostrich time.
We cannot expect any government regulation promoting e-commerce, though we can
wait till FDI in retail gets a clearance and see a bloodbath.
Though I haven't
done any name calling, you can do a fact check by a match-the-following
exercise with these names - snapdeal.com, taggle.com, flipkart.com,infibeam.com, caratlane.com, fashionandyou.com, chhotu.in and many others not
worth to be mentioned.
Disclaimer - The
views expressed are purely personal and not the opinion of my employer,
20North.com
Awesome and interesting article. Great things you've always shared with us. Thanks. Just continue composing this kind of post.
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