Over last few weeks, I read many articles on “Why Indians do not buy online?” There are around 100 mn internet users, but why only 10 mn users are using it? Fortune of many startups and VC who had funded them – hovers around question. I am associated with an e-commerce company for over 5 years and an active member of an elite club of e-Strugglers. With this experience, I would like to contribute to this discussion by sharing my thought and believes –
- Need Creation / Demand Creation – India is a need centric country. Customers in India are smart and they discover and learn new ways of transacting… if and only if the new way addresses their real need. If an e-commerce companies identify and address the real need of the consumer, it is either successful or will be so in future. Take for example –
- IRCTC is an alternate to railway booking counter (which may be 7/8 km away from home/ office) and the long queue at those counters. It also protects the customers from unscrupulous agents who charges hefty commission in lieu of tickets. Within no time, IRCTC’s online ticket service gained popularity and even the customers in remote villages stated using their service. Currently they book around 4.5 lakhs tickets a day.
- Flipkart’s Cash on Delivery (COD) is the most thoughtful solution to a consumer in an economy which is primarily cash based. Many, who do not have a debit/credit card, now purchase books and electronics online.
- Makemy Trip, RedBus, Book my Show, PayTM also addressed a particular need in a much focused way to gain popularity.
- Logistics – Logistics is a big challenge both in terms of reach and cost. We only serve to the customers in a select region and ignore the customers in the other regions as we do not have necessary infrastructure to serve them. The concept of COD is also restricted and is not being percolated to the lower tier towns, cities and villages where this service is most desired. For e-commerce to grow in India, the opportunities outside those select cities have to be harnessed… may be by building a common infrastructure to deliver. If someone can use the service of e-choupal for ordering seed and fertilizers, they can also shop online. They just need to be informed, supported (with payment options) and serviced.
- Localization – Just imagine… a Tamilian will be more comfortable buying a Tamil book, if he/she can read about the book in Tamil and can interact with the e-seller in Tamil. Most of the e-commerce sites communicate in English. In India, though many can read and write in English, but to have a strong connect with the customers, e-commerce sites have to communicate in the regional languages. This is a real challenge as India is a country with 18 official regional languages. I guess, e-commerce companies should start exploring the possibility of providing content in at least the important regional languages. This will make their online shopping experience comfortable.
- Payment Instrument – 450 million people in India are unbanked and out of the remaining banked population only around 20mn people has credit or debit card. This number is very low. But with the initiatives taken by the government and financial organizations to reach India’s un-banked population, I am confident that the e-Commerce is poised for greater adoption across India, in the years to come.
- Mobile Way – Innovation in the channel of sales is another important aspect. India has only 100 mn internet users, but more than 900 mn mobile phone users. Considering the popularity and reach of MVAS, I strongly believe that e-commerce will gain popularity in India through mobile way. The telecom operators are working actively to tap their network to provide an alternate stored value payment instrument; which can be used by customer even in the remotest of place can make on online payment for a product or service. Since the mobile eco-system is so extensive and penetrated, e-commerce companies should innovatively foray into mobile as an alternate channel of sales.