Online Business in India and a perspective
Written by Rajesh Kumar on August 6, 2008 – 1:00 amAshish Sinha of PluGGd.in noted over a tweet yesterday morning that Ebay India does about a transaction a minute. That makes it 1440 transactions a day and considering that many of these transactions would be not so high in value, the daily turnover of Ebay India would appear pathetically lamentable. That is the state of a country of a billion people and often billed as IT powerhouse.
Sadly, as I noted earlier, it is the smaller countries in the world that are the best wired today. But then online commerce is not just about net penetration alone.The Tweet debate with Mayank Gupta and Ashish was whether it is true that the inhibiting factor is the Indian attitude to touch and feel buying, rather than click and buying. I do not think this is completely true. We as investors in securities, do massive online trading, hold our shares electronically and so on. We buy airline and train tickets online and many of us buy books and music online too. Why, India could be an example of how matrimonial sites do roaring business with Shaadi and Bharatmatrimony setting a trend. And there are several sites doing property and property rental brokerages such as MagicBricks and 99Acres and so on. The numbers may be small, regionally skewed towards south India, but certainly. The story is different in consumer durables, such as white goods, furniture etc.
The press release from Income Tax Department points out that over 1.25 lmillion annual tax returns were filed electronically- returnees either did it themselves, or relied on an accountant to do so. That’s certainly a good baby step in doing things online. The point to note is that while the net subscriber base has not taken off as envisaged, the mobile operators continue to add a million subscribers a month. Add the 3G spectrum auction news and you come to conclude that online commerce in India would perhaps take off via the mobiles.
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August 6th, 2008 at 1:53 am
awesome points! as you said that in India it seems that it will mobile commerce which will do better as compared to normal web commerce.
the reason I said that touch and feel works more…is still true..
marriages, property portal act as a way to get contact…i’m sure no deals get finalized without actually seeing the real thing.
And the other points like train, airline tickets are something which won’t change even if you buy online or offline…when it comes to buying real things (not services) thats where indians don’t prefer to buy things online.
August 6th, 2008 at 9:23 am
Interesting points..but I dont agree that indians are not buying online - 2007 diwali witnessed sales of ~250 crores online!
There are two distinct user segments that are doing things online.
-Ashish.
btw - the link says plugged.in - should be pluggd.in
August 6th, 2008 at 12:49 pm
Mayank, good point, the issue here appears to be that services purchase adoption seems to be getting through, but as Ashish points out, thing such as Diwali purchases last year gave a good push for change for product purchases as well.
Ashish, thanks for letting me know, link to your blog is corrected.
August 6th, 2008 at 8:30 pm
The mobile and web commerce is getting bigger and bigger in India as well and it is here to stay. But there are various aspects to this.
As Rajesh rightly points out that we Indians sell and purchase shares on net, book railway and train tickets on net, look for life partners on net. But when it comes to consumer durables the story is entirely different.
Not only in India but its a universal phenomenon. Stats say that only 40% customers do a second transaction on amazon.com. The reason is that e-commerce fails to establish a relationship with the consumers. The areas where customer relationship is a key, webcommerce fails.
In India retailing is done altogether in a different way. Shopping is like a celebration. Its a festival. The day of shopping is planned, everyone gets dressed up before they go to shop. Shopping is mixed with eating out and having fun. The way you can’t play holi or celebrate diwali on net, similarly you can’t experience the joy of Indian way of shopping on web. In addition we indians love to bargain which can’t be done on web.
When People buy e-tickets, trade shares on net, look for properties on net they don’t loose on celebration part.
250 crores sales on diwali thro’ web is negligible compared to the figures of big bazaar alone. The retail revoltion in India which has seen so many malls and stores come up is a proof of that.
To conclude I would say that what we see now is only tip of the iceberg. the web commerce and mobile commerce is going to stay here and would change the way we live, work and do things.
August 9th, 2008 at 11:21 pm
Rajesh, as you said things will surely pickup speed if high speed internet access is made available through mobile. With phones like the Apple iPhone 3G, HTC touch diamond hitting the indian market this phenomenon is really going to pickup from the metros down to the other tier cities of India. I request you to post an article on your views wrt iPhone 3G launch in India (reportedly 22 Aug), its likely pricing strategy & effect on the domestic market. Thanks