Thursday, June 28, 2012

Can we just let our e-Commerce companies be?


The interest in Indian e-Commerce and e-Retail is growing day by day. And that's not only fuelled by the VC investments in the space. Currently there is a raging debate going on online on the recent cover story in Forbes India on "FlipCart and FlipCart CEO's letter to the editor".

Today's Mint has an interesting article on Indian e-Commerce scenario : "India’s e-commerce story at risk of losing its sheen."

Let me clarify the two stories are not connected but the reason I mentioned these is because they both have to do with the Indian e-Commerce and e-Retail story.

Ok so is there something wrong in India's e-Commerce and e-Retail story? Well Yes and No....

No because as we all know e-Retail is here to stay - with the inherent advantages of e-Retail as well as growing internet penetration and the sheer number of youth population who are always connected on their smart phones, tablets and laptops, - growth is inevitable.

Yes because profitability and loyal customer base are not made in a day and not many of the current lot will survive this tough period from start to profitability.

As I had mentioned in my blog "eRetail in India and the focus we need" the Customer is the key here. FlipCart seems to have done a great job so far if you look at what most of their customers have to say and that I think matters most from today's perspective and frankly I don't think we can say that for a lot of other e-Retail sites we have out there.

Lets also understand the fact that setting up and running an e-Retail business in India is tough. Right from experienced manpower to warehousing and delivery, everything is difficult to come by and many a thing has to be built from scratch. Unlike the Europe and US where you have FedEx and the likes to take care of product delivery and returns, in India we do not have such fine tuned ready to sync services. Product Returns is something taken for granted in the US and Europe where as in India most of the offline retail chains too don't have easy return policies. While online payment is the preferred mechanism in most countries, in India COD still rules in a lot of towns and cities. Each one of these needs to be tackled and that takes time & money.

So as our e-Retailer's build from scratch, learn the ropes and burn money as they do, those who know their target audience, build a great experience for them, and are able to carve a niche for themselves in their minds will gain the major share of their customers wallets and will survive. The me too's and the one's who focus on everything for everybody at whatever cost will find it more and more tough as customers and markets mature. And they are learning that too.

Some e-Retailers have opted out of the game while they rethink their strategies while some are re-inventing themselves as we speak. Overall, for India, it may be too early to predict who will survive and who will not and why.

A lot of our banks are still paying vendors and employees and others by cheque and not yet using e-payment options and our Finance ministry has asked State Run Banks to stop payments to their customers through cheques "e-Payment must for public sector banks from July1".  Like I had mentioned in my blog "Internet in  India" sometime in September 2011, there are still a lot of people and companies out there who don't even use e-Banking  or e-Bill payment facilities even today. That has to happen too as it would be key for e-Market growth in India 

The destinies of our e-Retail and e-Commerce companies will be decided when e-Life becomes a way of Life in our country and while that is still happening let's not try and pull those who are trying, down.

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