Online shopping - where’s the value ?
In the previous post, we had a good discussion about the scarcity of online deals for Indian Market, then came the point as to why the e-commerce isn’t picking up. To analyze this let’s first have a look at the reasons behind success of e-commerce in the US market. Books and Consumer durables (mostly electronics) are possibly the highest sold amongst the various goods sold online in US. Beyond any doubt, the user buying something online loses the shopping experience and has to wait for atleast a couple of days to get the goods delivered. So, there has to be a motivation and a strong reason which would attract the consumers to shop online.
Major factors that attract people to buy goods online are -
- Convenience
- Deals and discounts
- Availability
- Variety
Now let’s have a look at the most popular indian e-stores, and analyze what they have to offer against each of the above parameters.
Convenience - It is much more convenient and is also cited as the top reason in many surveys
Shopping online is all about convenience. Granted that you miss on the entire shopping experience consisting of going out, having snacks and idle talk, but even the die-hard shoppers will sometimes want to buy from their chair. But with convenience comes a risk, that the item will not be exactly same as described on the net, or may be defective. This is a big concern even in the US, and with our daily dose of indifference to customers, it would be really really hard to return any item once it is delivered. So you might save yourself a lot of hassle by taking a look before buying, it also identifies you with the dealer.
Deals and Discounts - Online shopping allows you to look for deals at all stores, local and remote
Be it greed or immensely low volumes posing a challenge to sustainability, Indian e-stores are charging higher than what you would get in the store neraby. To give you a few examples,
Nokia N72 at Ebay.in - Rs. 15,999.00 + 149.00 for shipping
Nokia N72 at FabMall - INR 16399 + INR 45 for shipping
And it is easily available at around INR 15500 at any of the stores in Gurgaon, so why would some one pay higher and then wait for a week to get the “media computer” delivered before one can try his hands on it?
Books, the nearby book shop easily gives a discount of 10-20% on any books and that’s the discount these stores offer.
Now, let’s have a look at the prices for a gift basket as described on FabMall, have a look at the satrangi diyas at FabMall, which cost Rs. 816 ! Even if the prices are genuine then the atleast needs to offer a product detail to justify it’s cost. Agreed the customer base is mostly NRI with deep pockets but does that mean that we have the liberty to fool them at our own will?
It’s not difficult to find more such examples and you would be surprised that the price listed on individual brands site like www.lgezbuy.com is also greater than what you could get at the store. Compare this with the US and you immediately see the difference. The comparison with store prices is easily available at sites like shopping.cnet.com and it is easily demonstrated that the online prices are almost always less than the store price. Sometimes the online stores even guarantee that there prices are less than any store.
Availability - people buy goods online which are otherwise not available in the nearby stores
With the advent of shopping malls in metropolitan cities, there is hardly anything available on any of these e-stores that you cannot find in a store nearby. Contrasting with the US, the malls are usually quite some distance away from residential areas and it could easily take you a couple of hours to do one purchase.
Variety - Users get a chance to compare price and features at the e-stores, enables better decisions
I tried comparing my favourite Nokia N72 with other phones, but the feature seems to be missing. When I compared the automatic washing machine models on www.lgezbuy.com, I found the comparison to be irrelevant. As you see below, the same feature is shown at two places. The information about Tub Clean/Silent modes is just plain wrong and it is present in WF-8014 HN. The comparison at other sites is no better.
The bottomline
It is not all about shopper’s mindset that we often attribute as a reason for slow growth of e-commerce, it is more about lack of understanding of customer requirements by these e-stores. Agreed, that the modern consumer is willing to pay extra for value adds and enhanced experience but then what’s the value add that the e-stores in india have to offer?
Abhishek Goyal said
am October 24 2006 @ 1:13 pm
I agree with the fact that low pentetration of e-commerce in india should be largely attributed to low quality of options available. Even the large and successful portals have done a very poor job of attracting best talent and delivering something worthwhile.
Madhur Khandelwal said
am October 24 2006 @ 5:15 pm
Good points. A couple more factors affecting the ecommerce market in India are:
1. Concerns about the security of online payments: I have talked to a few online retailers and one point that has always come up is the customers’ perception about the security of online payments. Customers need double confirmation that online transcations are safe and will not leak their credit/debit/account information.
2. Good customer support: People are not sure what will happen if the item that they buy online doesnt turn out as expected when they actually see it. So customrs need to be assured that the items can be returned/exchanged without hassles.
IndianPad said
am October 24 2006 @ 7:24 pm
Internet in India » Online shopping - where’s the value ?…
Internet in India » Online shopping - where’s the value ? posted at IndianPad.com…
Online shopping - where’s the value ?: Humdigg discussion said
am October 25 2006 @ 2:12 pm
Online shopping - where’s the value ?: Humdigg discussion…
Analysis on why E-commerce isn’t picking up in India …
Vaibhav Domkundwar - india 2.0 said
am October 25 2006 @ 9:07 pm
This is right on. Madhur, agree with you on the customer service and payments point.
I feel there is also another element to be considered here. I think, with all the points you have outlined above, the inherent benefit of eCommerce is convenience and/or savings. The convenience is awesome if a IT guys is able to book his air ticket online or order grocery online - however he worries about paying online and wonders if the local corner shop is more reliable. So I feel a online/offline model might work the best for India. Say, FoodWorld (a small grocery chain in Maharashtra) takes orders online, delivers offline collects payment when they deliver. Everyone is comfortable.
This can work very well is most of the categories of eCommerce and I believe it can scale.
The other fundamental problem is the postal and courier services which are so poor right now. So if we consider a local eCommerce model where in retailers in Mumbai have their sites and users who feel comfortable with them buy from them and get the goods delivered and pay on delivery. Some of this is happening in some or the other way, but it has not been pushed strongly to make more users move to buying stuff online.
Blogbharti » Online Marketplace: India’s Problems said
am October 25 2006 @ 10:40 pm
[…] Pawan Agarwal talks about the poor adoption rate of online shopping in India and concludes It is not all about shopper’s mindset that we often attribute as a reason for slow growth of e-commerce, it is more about lack of understanding of customer requirements by these e-stores. Agreed, that the modern consumer is willing to pay extra for value adds and enhanced experience but then what’s the value add that the e-stores in india have to offer? Posted by krishnan […]
Aditya Kothadiya said
am November 1 2006 @ 6:18 pm
All said is true. But if you go back and try to see why these e-stores are not able to see what customers want, and in what ways they can simplify shopping experience, make more secure services, build the credibility, provide after sales support - then you will see, they all lack providing value to the user. When you are too much into making money than meaning, then you overlook the innovative ways of capturing the market.
Customers are waiting for services which are comfortable, reliable, and are there to improve the society. And that leaves huge scope for entrepreneurs to innovate something remarkabely in Indian e-commerce market. I think if the motivation is right, then there are tremendous opporunities in India.
Vinitha said
am November 18 2006 @ 5:00 pm
Iwant to send groceries to a home in Mumbai. Is there a website where I can purchase online. I live in Bangalore.
Pawan Agarwal said
am November 18 2006 @ 7:14 pm
Vinitha
Am not too sure about any website, but stores like Big Bazaar offer these services on phone, at least in NCR, you can check inquire from them.
Pooja said
am March 27 2007 @ 3:52 am
Has anyone checked out Bechna.com for their online shopping? rather than visit rediff, sify and other stores they have all the prices and products in one place. Very cool!
rst said
am May 10 2007 @ 8:45 am
its just a matter of time before the value also starts coming in. as numbers of users increase even more prices will fall. meanwhile websites like redpepperlounge.com offer shopping options of experiences that cannot be purchased as gifts otherwise. so depending on the type of market some stores will offer value.
pligg.com said
am May 10 2007 @ 8:47 am
Where’s the value in online shopping?…
Where’s the value in online shopping in India?…
Anmol said
am May 24 2007 @ 7:32 am
All of you guys are saying absolutly right but I would like to tell about a website that offer your electronic products at reasonable price and whts more important - a satisfactory customer service.
Please visit this then tell…
http://gadgets.in
A leading on-line gadget shop in India, and the best source for the latest and new gizmos and gadgets.
Phone : 91 11 26534530
I wish a pleasent online shopping experiance for all you guys
Thanks
Anmol Taneja
magiccoool said
am July 10 2007 @ 2:26 am
http://www.dealaajtak.com : Hottest deals and lowest prices on mobiles, camorders, handycams, digital cameras, iPods, MP3 players, Laptops
dealaajtak reports the hottest deals and lowest prices on mobiles, camorders, handycams, digital cameras, iPods, MP3 players, Laptops and more, all from reputable merchants in India.
http://www.dealaajtak.com
ashish said
am August 2 2007 @ 3:39 am
dealaajtak looks cool… infact all the india small and big shopping sites i have seen - dealaajtak is only and only website which seems to be putting so much hard work and targeting an average indian rather than so called deep pocket NRIs. great effort by them.
sarath ks said
am October 4 2007 @ 9:37 am
Hai check out the new site http://www.storrz.com.It’s a recently launched online shopping portal based on bangalore.I think it’s the first online shopping mall in india where we can purchase groceries online.They assures one day delivery on purchase.Those who want to
purchase groceries online,storrz.com will be a good option.
They are selling only branded products. They have exciting payment like sodexho meal pass & credit/debit on delivery.
sarath ks said
am October 4 2007 @ 9:43 am
sorry http://www.storrz.com
Joshan said
am October 4 2007 @ 11:43 am
Dear Sir,
Its true that e-stores in India need to understand the consumer requirements. They need to provide safer payment modes, offer goods that are not readily available and most importantly provide a really good interface which makes navigation through these stores easier! I know of a few stores like www.storrz.com and www.indiaplaza.com which provide some of these. Recently i shopped at storrz.com which provides pretty good payment option if not the best. They seem to be the only ones selling groceries online! They have a couple of good deals too. The best part is their 24 hrs delivery service though i got my Then theres is future bazaar. But they do not provide the option of shopping for groceries. Once we get a portal where we can shop for whatever we need with safer payment options online shopping will see its biggest rise ever!!!
chkalyan said
am October 30 2007 @ 4:48 am
Hey guys and one more thing u have to remember and a must to check while buying Online you go for any website n any shop,dont get tempted that the deal is a cheap one.My personal experience is that check for the warranty,wether it is a genuine or not,mean the company or the dealer.If it is a dealer warranty dont go for it.Especially dont buy from the Indiatimes knock out offers and any other things from that website,everything is a fake one and not a genuine ones and doesnot comes with a company warranty.
Tsar said
am April 13 2008 @ 7:59 am
How sure can we be that the items we purchase on line are really new and are ‘un-toouched by human hand’ before they are sold to us? It might be different with these popular e-stores, but we Indians are generally unethical, aren’t we?
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