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Coming of age: E-commerce in India

Emergence of innovative online shopping portals marks the rebirth of e-commerce in India.
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20 JUL 2011 Nargis Namazi

Tweet Gone are the days when credit cards were used online just to book air tickets. With more than 52
million active internet users and a whopping Rs. 9,210 crore annual turnout (Source: I-Cube 2009,
IAMAI), e-commerce has finally taken roots in India.

Along with the giants like eBay, Pantaloons and Rediff, a number of small portals with fresh and
exciting business models have transformed the face of Indian e-commerce industry. A recent survey
conducted by DataQuest shortlisted the 20 hottest e-commerce startups based on business model, user experience
and traction. Names like 20north.com, Bindaasbargain.com, Fashionandyou.com, Flipkart.com, Naaptol.com, etc.
feature in the list. We explore further to see what makes these nascent portals so successful.

Keeping it simple

Most of the upcoming ecommerce ventures are based on highly-specialised business models and cater to select
customer-base. Websites like FashionandYou.com offer great discounts on fashion and luxury brands, whereas
others like SnapDeal.com are group-buying sites that offer a wide-range of services to people living in metros. This
simplifies shopping for the end customer who no longer needs to wade in and out of a myriad of sites looking for
select goods.

Taking simplicity to a next level are websites such as BindaasBargain.com which sell just one deal per day.
Customers canvisit an uncluttered webpage and quickly decide whether they want to buy the deal or not. Not only
does this cut down on the buyer’s decision-making time, but also enables the company to maintain a lean fulfillment
and customer support operation, the benefit of which is passed on to the customer ultimately in the form of steep
discounts.

Keeping the Indian customer in mind

Although many of the start-ups are mimicking successful US businesses, they have taken into consideration the
average Indian’s hesitation to online shopping. It is interesting to see how they have tailored themselves to bring the
Indian customer out of his shell. Most of the companies provide users with the cash-on-delivery option and also a
convenient return/refund policy. Furthermore, one can chat online with customer care department of MyDala.com or
interact with other users on BindaasBargain.com before buying a certain product.

One of the major challenges long faced by e-commerce portals is to meet the need of Indian customer to touch-and-

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Coming of age: E-commerce in India - Business Review India Page 2 of 3

BuyThePrice.com goes a step further and offers deeper discounts if more buyers are interested in the products.

Social buying is an age old concept in offline retail and now we have websites which make it possible virtually. The
new-age e-shops in India provide customers with a platform where they can interact with each other or with the
company officials before buying a certain deal. Most of the companies have a presence on social networking sites
like Facebook, Twitter, etc.

Some like Bindaas Bargain have gone a step ahead by taking special pains to enhance the social-buying experience
for their users. This website has a separate community section where one can discuss deals, read reviews, ask
questions and interact with insiders and thereby make an informed purchase. An epitome of social commerce is a US
site called Blippy.com, which takes a user’s purchases from credit card companies (with user’s permission) and
makes it available to his friends and others for comments, analysis, and ratings.

Such transparent person-to-person counsel raises customer confidence immensely and helps diffuse the margin
between offline and online shopping experience. It instills a faith in users about the product as well as the company
they are dealing with. This is a substantial achievement given the Indian customer’s wariness towards online
shopping owing to his past bad experiences.

Future prospects

The ecommerce industry in India has witnessed a rebirth, creating an entire new economy. Keen on tapping the
potential of the current scenario, several websites have sprouted. With unique marketing strategies, these companies
are redefining how business is done, successfully creating a niche for themselves in the hearts of the Indian
customer.

Although barriers like poor internet penetration and customer’s lack of faith impose grave challenges, these can be
countered with improvement in technology infrastructure. Recent events like the acquisition of Kolkata-based e-shop
SoSasta.com by the US-giant GroupOn.com and the investment of USD 8 million by Sequoia Capital in
Fashionandyou.com indicate an exciting and promising journey ahead.

Saheem Wani

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