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Alibaba Planning to Snap-a-Deal: Indian e-Retail getting hotter

September 18, 2014 Leave a comment

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The news of Alibaba, which has sales more than Amazon and eBay combined, looking for a share of the e-retail industry in India is definitely a great news for the e-retail industry in the country. The already hot industry scene is about to get even hotter.

The industry as such has been attracting large size investments from across the globe. But, this investment is different. Flipkart and Amazon have been considered Snapdeal’s biggest competitors till date. Where as Flipkart has been able to in crease its valuation to about $6 billion (with the last investment round of $ 1 billion), Snapdeal is still around $1 billion in valuation. Close on the heels of Flipkart announcing the closure of $1 billion investment round, Amazon announced an investment of $2 billion in its India operations. With these two announcements from Flipkart and Amazon, Snapdeal had started to look a shade pale. But, the news of Alibaba making an investment of $300 million in Snapdeal does bring it back into the game. Although, $300 million might look small in comparison to the investments Flipkart and Amazon have announced, the name Alibaba itself lends an lot of weight to Snapdeal.

Although no one is clear on how Alibaba will leverage its Indian investment, but one thing is for sure, it will definitely give a lot of competition to the other two giants.

Starting an E-Retail Venture in India: Five factors to Keep in Mind

September 9, 2013 1 comment

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Organized retail in India has been a grand success in the last decade-and-a-half. The rapid urbanization in Indian cities gave rise to malls, multi-brand and single brand stores. The increase in income levels across the population as well as double incomes of the new generation nuclear families contributes to the substantial increase in the disposable income of the Indian consumer. Of late, the physical infrastructure is not able to keep pace with the rate of increase in urban population, giving a chance for both the consumers and sellers to explore alternate options.

With the increase in accessibility of the internet in India, the retailers have started going ‘virtual’. The ‘virtual stores’ or the ‘e-stores’ scene is already bustling with activity in India and given the demand there is a huge scope of expansion for established players and also a scope for new entrants. E-retailing scores over traditional retailing in a number of ways. The retailer is spared of the costs related with the brick and mortar set up whereas the consumer gets the benefit of choosing from a wide range of products sitting in the comfort of her home thus saving on travel costs and time.

A country’s prospect for online retail success is closely related to how many people use the internet and how many of them are comfortable purchasing online. There are almost 120 million internet users in India and looking at the 2020 vision it could reach to 1 billion if it continues to grow at this rate. A quick look at the demographics of India reveals that 64% of the Indian population is in the working age group of 15-64 and 35.0% is relatively young, aged 15 to 34. This is the user group readily willing to adopt the e-retail culture.

Given these figures, the Indian e-retail market is a very attractive proposition. There are already many e-retailers in India and many are planning to set up shop here. Even though the market is attractive, every day there are stories of online stores going bust. This is because online retail in India differs in many aspects from the other parts of the world. I have listed below the top five factors which an online retail business needs to pay attention to if it wants to avoid failure in India.

1. The ‘hybrid’ shopping experience: The Indian e-retail market is not a pure-play ‘online retail’ market. It is gradually moving to and will firm up as a ‘hybrid’ model where the customer ‘orders’ the product online but ‘buys’ only after checking it physically at the time of delivery. Although, this happens more in the cases of apparel where the customer needs to try the fitting and size of the product before buying. With the customers already feeling comfortable with the model, it will spread to other product lines such as electronics and even consumables.

2. Reliable delivery and returns: One of the most important factors contributing to the success of an e-retailer is the on-time delivery of the products. It is a known fact that the supply chain infrastructure in India is not up to the global standards. So, an e-retailer has to ensure that either he sets up its own delivery network or partners with a trusted party. The delivery network not only needs to ensure the delivery of the products but also the returns in case of change of mind at the time of paying or in case of faulty goods.

3. Cash-On-Delivery payment mode: The unreliable delivery infrastructure in India helped ‘cash-on-delivery’ option gain popularity. The customers were wary of paying upfront in the wake of uncertainty of delivery. The COD option allayed the fears of the customers as the cash exchanged hands only at the time of delivery. Even with the improvement in delivery infrastructure, cash-on-delivery will always be preferred payment option. Consider the fact that an established e-retailer such as Flipkart, which has a robust delivery network trusted by the customers, receives 60% of its payments as cash-on-delivery of card-on-delivery.

4. Pass on the savings to the customers: The Indian customer is very price sensitive, especially in the case of branded products. She would check the price of the article at multiple websites or stores before buying it. The e-retailers generally save on costs which tradition brick and mortar sellers incur on the physical infrastructure. Majority of the e-retailers are already passing on these savings to the customers. This has helped building a perception that online prices of products are and should be lesser than the store prices. Any new entrant in the market will have to follow the trend.

5. Difficult to fit one size to all: Always remember that India is a country with 1 billion plus population which speaks 20+ major languages and boasts of diverse cultural and demographic characteristics. No organization to have uniform policies and tactics across the country and hope to succeed. Same is the case is with e-retailers. They have to customize the products and services according to the requirements. The mantra here is to be receptive to the feedback, sense the needs of the consumers, tweak your operations and serve the customers.

On a concluding note, although the Indian online retail market presents a great opportunity for retailers to explore, many factors need to be kept in mind before taking the plunge. The entry barriers are low and there are hardly any restrictions from the government agencies to set up an online store. This is bound to increase the competition. Only those who go to market with a customer centric approach will be able to survive and flourish.

Small Businesses, Get Online. With Ease!

August 5, 2012 1 comment

By the year 2020, India will have the third largest internet population, behind China and the US in that order. But, India will have the ‘youngest internet user’ out of the three economies.

The current online retail market for all the products and services is estimated at $10 billion. E- retail accounts for 6% of the total online commerce and is valued at $0.6 billion today. By 2020, the online retail or e-retail will cross $70 billion when the total e-commerce will cross $200 billion. Now that’s a huge increase! No wonder e-retail start ups are mushrooming all over the place and getting funded too.

The current market is cluttered with a handful of online retailers such as e-bay, flipkart, yebhi etc, and then a large number of tier two players with varying amount of reach and product catalogue depth. But what do small retailers with physical stores do to get online? Majority of them just discard the thought of ‘going online’ because they find it cumbersome to manage a website and to have an IT team of their own. This void has been there since long until Google came up with the initiative – India, Get Your Business Online. But, it is a tedious process to “get onto” the Google’s platform.

Here is s start-up, that is helping small businesses to set up their own online stores and web-presence- at a very minimal cost and with no need to worry about the hardware, the software and human resources for the task. RetailEMall (www.retailemall.com), a venture of Creative Monks, helps small businesses set up their online store on their own domain / website in few clicks. The best part is, it is FREE to some extent. RetailEMall does not charge these businesses anything if they are not able to sell anything through their online store. Business need to make a nominal payment as per their chosen plan only for the months when they do sell online on their e-commerce store.

Using RetailEMall one can start his online store in few minutes and can make it available on their custom domain like www.mystore.com. Have a look at their demo store. In addition to it, RetailEMall platform also provides an option of setting up Facebook stores (complete e-commerce store on Facebook) in few clicks, this feature is avaialbe to all store owners on platform. Have a look at sample Facebook store setup using RetailEMall. As soon as one registers an online store on RetailEMall, one will get an access to his / her store administration account from where one can manage every aspect of store for instance, one can manage products, store details, order details, customers etc from their store administration account. Store owners can also customize the store’s look and feel without an codng ot technical skills required. Stores on RetailEMall can choose a template from available ones to change their store’s look and feel. Store owners can further customize the  color scheme of selected template without any technical or coding skills.

Another excellent feature and key differentiator is that, the products of all stores on RetailEMall are also showcased on the “E-Mall” store front (www.retailemall.com/mall) – the mall interface of the platform. Its something similar to Amazon’s Junglee.com. This mall interface connects end-customers to vedors. If a customer clicks on a product on the mall interface, he is directed to the retailer’s online store to which that product belongs. The platform also provides integration with online payment gateways like PayPal, ccAvenue, EBS etc for retailers to accept online payments. Yes, the retailer just need to signup with payment gateway and simply configure the provided details in his store admin account, thereafter they can start receiveing online payments on their online store.

RetailEMall is a brilliant attempt at creating a ‘get online’ platform for small businesses. The major positive point of the platform is that a business can get online in just a couple of hours. The ease of use is pronounced by the fact that one does not need any technical knowhow to manage the store once it is set up.

And, yes, the RetailEmall team is always there for support!

For more details visit: http://retailemall.com/store/