Thursday, February 25, 2016

India Ecommerce

Most of the consumers still think Flipkart is the first e-commerce company in India. But the truth is Rediff, ebay and some other companies have been in the market much before these new companies. So why these early birds were not able to make an impact?
This may be due to various reasons.

1.   Easy internet access to consumers was missing in those days
2.   Less variety of products.
3.    Packaging Hygiene.
4.   Late Delivery.
5.    No Refund in case of bad products
6.    And last and the most important is “Marketing”.

The good tactic Flipkart used was to target the middle class consumers as they are aware that India is a price centric market and many people eye for discounts on FMCG and electronics products, instead of a branded “Swiss Knife”. After 2007, the ecommerce magma was hot and ready to erupt. Soon it did with companies like Snapdeal, Amazon and other small players, funded heavily by investors and gave a kick to the business.

We started buying most of our products from these sites at very attractive price. Of course who doesn't want to save money and time? To add to the convenience is doorstep delivery. So why did the local, small general store business failed and how come ecommerce companies are selling products with huge discounts? Its' simply because they buy in bulk quantities. This is the same story with other two giants Snapdeal and Amazon.

For example a local shop will purchase 50 toothpaste pieces as per consumption in his shop. A toothpaste MRP is Rs 50. On buying 50 pieces, let's say the wholesale price is Rs.48 or may be Rs.46. Since the shopkeeper also wants to make some profit; he would give a discount of one rupee to his few regular customers. But the case is different in case of supermarket and ecommerce companies. They buy 10k toothpaste tubes not from the wholesaler but directly from the company. For 10K tubes, the company will charge not more than Rs.35. In this case, they can easily slash the rate to Rs.10 but will still make profit.

Also, we all know that companies spend huge amount on marketing & promotion whereas that's not the case with local stores.

Another reason what I felt is lack of choices from local vendor along with bad service.
Remember those days when you got a bad battery from the local shop and he refused to exchange the product? I believe we all had our bad experiences. The best that the shop owner would do is to say “I will show it to the company dealer” blah blah blah and nothing happened after two days.
Ecommerce has given a leverage of returning the product in case of manufacturing defect, wrong size, color, and if in some case we don’t like the product.

However there is a dark side of the picture too. Ecommerce is full of fraud stories too! In one case, the customer got two mangos instead of a smart phone..Really! We are looking at a saturation level for this ecommerce bubble. New companies are popping up every day with attractive discounts. The reality is far from what they claim.
Most of the small ecommerce companies are selling first copy of brands, there supply chain department is not effective and many times not able to deliver the right product. In case of dispute, there is no proper customer service. Examples of such companies are-Shop clues,, Star CJ etc.

Sometimes back big IT companies like HP and Lenovo stopped all warranty services to products bought online because according to them they are killing their own retail business by selling it on a huge difference, but somehow it was sorted.  The one billion sale of Flipkart was in huge controversy between the consumers and also with other ecommerce companies. Some of the companies are even selling product directly from the local dealer or what they claim; in case of Flipkart they have their own company by the name of WS Retails.
I understand that we all want discount but at the same time, couple of things we have to keep in our mind before clicking on the payment option:

1.       Try to buy from a reputed company as chances of getting cheated will be low
2.       Try not to buy clothes and shoes as most of the time you will end up with a wrong size or color. It’s better if we buy these things from the retail outlet as we can always try the product.
3.       Electronic items like TV, Camera, and Cellphones must be purchased after doing a research on the warranty period from the day you receive the product.
4.       Before buying from a new site do read their return and exchange policy. I have encountered a company who have mentioned that some products are not refundable, but there actual terms and condition says “All products can be returned in 7 days”.
5.       Before making the payment make sure it’s a secure site. Do check for https:// and always use OTP.

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