Off late, I’ve been collecting some thoughts on e-Commerce in India – the perpetual questions also allures me as well like why isn’t Indian e-Commerce catching up faster like it did in the west, what are the problems other than the usual infrastructure roadblocks, what sort of business models might work better in Indian markets etc etc.

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More on it later. Before that – today I read couple of informative posts [1] [2] [3] which paints the overall eCommerce ecommercepicture in India.

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Fair enough. I won’t say that those comments present a groggy state of Indian eCommerce but surely the picture isn’t bright. But yes, that brings me to yet another perspective. Talking to close contact from eCommerce world who’s been there, done that says that Indian eCommerce is still behind 5 years from western counterpart. Interesting comment and I can see why so!

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But I was wondering that can’t we do better than that. May be yes or may be no. Only time will tell but I know one thing for sure – one who listens (only) stays back and one who listens and moves forward sets his own path.

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Now back to this post – some of the comments I’ve been hearing from people far & near who has little, some and much experience in ecommerce are here as follows:

  • Technology trends are always over estimated in short term and underestimated in long term. The user base for digital commerce is really expanding and while we wait for the growth to kick in we need to be careful about how sophisticated an experience a business is offering to the customer.
  • The reason why number of people shopping on net will be low is that the interaction with the internet has always been about free; be it news, email services or any other thing and free is the most difficult price to compete against. Web is about removing layers between the product manufacturer and the consumer, while e-Commerce in India adds layers. The main reason why value is difficult to build for e-Commerce in India is because the tax-structures are in favour of offline business- due to the inventory holdings the respective businesses need to maintain. One needs to be patient for e-Commerce to deliver real value. The reason the travel in e-Commerce has really taken off is because one could deliver the information to the user online and needs no logistics.
  • e-Commerce is not just about transactions but replicating the whole shopping experience.
  • E-commerce delivers a phenomenal value in re-sales market because it is a complex business to implement offline and that offline methods are extremely in-efficient. It is impossible to sell a Rs. 5,000 bike offline while people are already doing it online.
  • From UI Aspect – Overcrowding the portal and flooding it with tacky products, Google ads and not highlighting the product in good enough size is behind low adoption & last mile selling of eCommerce in India since an end-customer won’t spend a good enough price for a product which doesn’t allure her in the first place. So the whole shopping experience goes for a toss in the initial contact of user with a shopping portal.
  • Lower adoption of e-Commerce in India is due to delays in shipment which may run more than 7 days here in India whereas in West, Amazon delivers in one day.
  • The overall experience of shopping is missing in online shopping portals i.e. Indian buyer expects & wants to “touch & feel” the product even though she’s buying a lesser worth product. It adds to the overall consumer experience which is missing in online model.
  • Also, shopping for most Indians (mind it that here I’m talking about most Indians and not everyone of us) is still a social affair i.e. a small outing sort of thing which many enjoy. Now this sort of experience can’t be replicated online.
  • Mediocre Payment gateways is yet another hurdle.
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There are many more. But let me not paint such a sad picture overall 🙂

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Now digressing a bit, couple of months back I was doing some work on eCommerce models in India, their business models and what’s lacking that can and can’t be hidden or over-ridden. I’ll tell you what excited me the most from my findings. Most of the eCommerce platforms that are here in India which is making some amount of money to stay afloat have deeper pockets since lots of cash is burnt initially. So smaller players are more or less mutilated if they can’t hit the jackpot right away.

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Similarly, new business models emerged like social shopping couple of years back. Now when I went back to some like, – they are gone (there site is down or they have really left the building). Few survived – amongst them one is (btw do check these interesting uber uber online social shopping biz models – and Dell Swarm).

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Point is the evolution is happening even though some have perished but still newer business models are emerging fast and wide in this segment and in due course of time, we are going to see more innovation from business model aspect but the macro aspect is proving to be the biggest laggard in the whole ecosystem.

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So I was wondering if a trade-cartel sort of arrangement might work in this case? I don’t know for sure. May be you guys can help me. But one thing for certain that measuring Indian online shopping with western countries in mind isn’t a good idea.

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P.S. One of the most successful venture that comes on top of my mind which has been most successful in recent times is IRCTC. Wonder why? Does it give us any hints?

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