Tag Archives: retail

Assocham-Comscore State of eCommerce in India – Report

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In Sep 2012 Assocham together with Comscore came out with a report on the Indian ecommerce Scene. It had some known and some new stats/key points. You can download the report here

Here are the main points 

Demographics
  1. 75% of online audience between the age group of 15-34 years
  2. Female population is about 40% of total users (July 2012)
Travel
  • The penetration in India is about 44% which is higher than the world average for travel
  • IRCTC get about 19.2% of all Indian online traffic (highest – 12mn uniques/month) followed by Makemytrip
  • Redbus gets about 2%
  • Surprise: Content type sites for ex: indiarailinfo (3.2%) and mustseeindia (2.3%)
  • Travelyaari and Makemytrip (2.3 mn uniques a month)
Retail
  • The penetration in India is about 60% which is lower than the world average for retail (72%)
  • Amazon gets about 15.4%, Flipkart (11.5% – 7.4 mn uniques/month), Snapdeal (11.1% – 6.9 mn uniques/month) of all India online traffic
  • Apparel is the most growing subsegment in retail
  • Flowers/gifts/greetings is the only subsegment with negative growth – 33% (Our coupons??)
Breakup of Payment Methods in India
  1. Direct Debit – 58% with avg transaction of 20$ (lowest)
  2. Visa – 21% with avg transaction of 48$
  3. Master card – 12% with avg transaction of 47$
  4. Cash on Delivery – 7% with avg transaction of 33$
  5. Others – 2% with avg transaction of 43$
  6. American Express cards apparently have the highest avg transaction size of 110$
IRCTC Specific Info 
  • SBI and SBI Direct – 29 +26 = 55% of all transactions
  • ICICI (17%), HDFC (14%)
  • Do a revenue of about 38 Cr
 Future 
  • Car rentals and bus booking online should go further up
  • home furnishing and lifestyle goods to contribute more
  • comparison shopping sites/apps to get more popularity

The Best of Web: 25/6/2012

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Looking for something interesting to read? I read the following links(and visited websites) today and liked, you might want to read them/check them out

  1. Apple’s Retail Army, Long on Loyalty but Short on Pay  (nytimes.com)
  2. http://www.asymco.com/
  3. Opportunity Cost (Seth Godin’s simple yet effective reminder)
  4. Flipkart CEO’s response to the Forbes Story(and their reply)
  5. The role of physicians at the centre of health care is under pressure

Amazon’s Junglee.com joins the Indian E-commerce Party

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A couple days back I read this article on Medianama which shared that Amazon will soon go live  in India as a marketplace with Junglee.com, but a tweet  today morning  announcing that Junglee.com is live caught me by surprise.

Amazon, of course was expected to test waters in India this year but the whole junglee.com gig is away from most people’s anticipation of how it will all unwrap.

Amazon for the records is the the biggest global e-retail/e-tail giant which posted $17.43bn in revenues in last quarter of 2011 (35% more than the revenue for same quarter in 2010). The company net sales were up 37% compared with 2010.

Amazon is India

There was a lot of speculation particularly for the last six months about Amazon’s entry to India. Amazon as countless sources have shared, already have development centers in India and had started looking for talent for their fulfillment capabilities.  As per the current regulations Amazon is not allowed to open an online Multi-brand retail store, and can not make FDI  in India except for a single brand retail business, thus Junglee.

Amazon’s Junglee

Here’s how Amazon describes it

“Junglee is an online shopping service by Amazon which enables customers to find and discover products from online and offline retailers in India and from Amazon.com. Junglee organizes massive selection and multiple buying options from hundreds of sellers, and leverages Amazon’s proven technologies and millions of customer reviews to help customers make smart purchase decisions.”

For the uninitiated Junglee is like a Huge Brochure which lists  millions of products from thousands of vendors. You choose the product that you want to buy and then go the vendor site or call them to order as explained here



Here’s a look at one of the category(Books) page

 

Just one book, also I am not sure why am I being shown featured jeans when I categorically chose books.  Bugs.

Here’s a sample product page(for Paulo Coelho’s Alchemist)


Amazon apparently relies of it’s own site for Metadata (Product Description for ex) which in some cases can be really screwed up like for the book ‘I Too Had A Love Story’

The product description is picked from http://www.amazon.com/I-Too-Had-Love-Story/dp/8188575704 and is as far from the actual book description as it can be http://www.dialabook.in/books/i-too-had-a-love-story_1_12247.html

Scrolling down further is the review section. Most part of this section comes directly from Amazon.com



List of Sellers

 

Junglee.com for now has about 5 sellers for Books which includes names that probably feature towards the middle(and bottom) spots of a list of top 10 online booksellers in India. Almost everything from the list except Flipkart and Infibeam can be expected to list here.

Using Junglee as a Seller: Win Some, Lose Some

 

Junglee let’s online and offline retailers to list themselves and their catalogues for free and without any ongoing commission.

 

What it means for suppliers (especially small time indies) is that they get a chance to  drive traffic and sales from Junglee’s visitors and will convert some customers to direct. Over a period of time as in an online marketplace set up their ratings and reviews will determine how they fare in the long run.

The picture however isn’t all rosy. For established players like Indiaplaza (unless there is some non-compete or alliance agreement) registering on Junglee will give them a temporary boost in terms of both traffic and eventually sales but once Junglee starts running it will break its shackles and given them a run for their money by listing Amazon.in as the default/first choice as a buyer. Once that happens the customers will make the switch to Amazon (in place of a retailer they found a few months back) with the blink of an eye.

(http://services.amazon.in has more details on how to set up ads on Junglee.com)

Using Junglee as a Customer: All Profit No Loss

Junglee.com is another (but branded) shiny object for the scores of people who spend hours daily on the interwebs tweeting or facebooking. They know have one more place to spend time and compare prices. It will be helpful in finding alternative vendors for particular categories and helpful in finding product categories that have been literally out of the online sphere, stuff like Pet Supplies.

Within a span of months you’ll find dozens of people selling Pet Supplies and the likes on Junglee. What this means is that consumers won’t have to wait for their favorite e-commerce site to add some category or a stand alone/vertical service around the category to launch.

What’s up with Amazon?: Junglee is the shortest(and smartest) possible path

To begin their tryst with India  Amazon is trying to be the front end(influencer) of the purchase funnel in stead of starting being a back end service provider. It wants Indians to log on to Junglee.com to begin their shopping journey (they can or cannot decide to buy from Amazon) but eventually they’ll make it their in house offers compelling enough to get a huge chunk of the pie.

Here’s how it could unfold for Amazon. Junglee is essentially the market place of Amazon.com abstracted and launched a special business for legal and other reasons.  In Amazon.com’s marketplace lot of vendors put their goods on sale and do most of the fulfillment too. Amazon however displays their products and collects the payment from customers (Think Ebay).

What Works Good For Amazon

  1. Junglee will create an incoming line for new retailers to tie-up. Retailers will flock and list products instead of the company finding them using direct/in-direct modes of advertising or marketing.
  2. User Data: Millions of people could potentially sign up and start using Junglee to discover new products and vendors. All the user and their shopping history details are now available for scrutiny
  3. All Junglee’s set up  can eventually be replicated for Amazon.in’s market place feature
  4. A sense of how business works. Deeper/Closer look at how the things work
  5. Later they’ll start people for accepting payments and maybe coordinating deliveries (Customers buy a third party product from Junglee and Junglee home delivers a product which the third party retailer had in their office and sent to Amazon’s fulfillment center once they get an order). They stand to earn 2-10% commission depending on the product category and services they offer
  6. Use all the Seller info to tie-up directly for Amazon.in
  7. Based on user preferences start offering competitive prices and eventually *produce* them domestically

Having said all of that, Junglee is an interesting piece in the Indian e-commerce puzzle and it will definitely have an impact on the existing market leaders. Most Indians from what I understand would give an arm(or probably) a leg to switch to another cheaper vendor especially if it has Made in America tag on it.

What do you think?

Will the real Indian e-commerce start-up please stand up?

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First off let me acknowledge that the title of this post is a bit exaggerated and not really apt but I wanted to use it anyways. Onto the topic now.

I’ve been kinda following(not very regularly though) the Indian startup scene ever since my Slideshare days and things have definitely changed in the last year or two. There are a lot more startups(of all sorts) now ranging from deal a day sites like snapdeal to comics companies like Vimanika. It’s absolutely amazing to see people from non tech background also coming forward and creating products/services in their respective fields. However being from a tech(web) background I am particularly interested in web startups.

The majority of current crop of Indian web startups is (not surprisingly) focused on e-commerce and as with the previous wave of Indian social web startups are religiously following the same path. Somebody whom I met last month mentioned that some 20 e-commerce sites or so are registered with payment gateways every month and a vast majority of them are into selling books. Yes, that’s the “thing” I am talking about. Suddenly everyone wants to do e-commerce and guess what they want to sell? Yes, BOOKS.

While it is not at all difficult to understand why selling books online is one of easiest (especially if you are an ex-amazon) and probably lucrative thing to do what defies me is WHY everyone who sets up an e-commerce store can’t seem to think beyond books? Unless I am missing something obvious here (point me if I am) selling books(particularly to begin with) might not be the best thing these days.

Here are a few reasons why I feel selling books isn’t the best way to start e-commerce

  1. Differentiation: I have told this to at least a couple aspiring entrepreneurs the biggest reason why I feel an e-commerce startup should not start by selling books is differentiation. How on world will you differentiate yourself from half a dozen almost established and established online bookstores out there in the market?
    It becomes particularly difficult when you are late in the book market by at least 2 years and will take at least another 8-12 months to figure out(if at all) how the Indian book market works.
  2. Red Ocean: Loosely related to the first point is the second point of competition. Online book market in India is easily one of the most sought after pie. From independent online retail companies to established bookchains everybody is trying to own as much as they can of this market and unless you have a significant edge in terms of vision/talent, money/resources and distribution/publishing it doesn’t make a lot of sense to join the chaos.
  3. Logistics: Based on my experience of selling books I’ve realized that this is highly logistics oriented business. Since the whole model is based on economics of scale one needs to sell as many books as possible(very low average cost per item). Handling lots of books means lots of procurement, stocking, handling, shipping etc. This can be a huge pain during the initial days of a startup. This problem of high logistics can be avoided by dealing in other items of higher values where despite having lesser % margins one can make good amount of money.

Having said that I think people who want to start an e-commerce business should actively consider other options which have a demand but no one else is focusing on. Though I must say I haven’t deeply thought about the business/feasibility aspect I would actually love to see some Indian e-commerce company sell the following(in a proper way with due diligence)

  • Clothes
  • Watches
  • Grocery
  • Automobile Accessories/Spare parts
  • Furniture
  • Gift Items
  • Food Items/Snacks
  • Fashion Items