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DOT.COM: 1ST ANNIVERSARY: B2C COMMERCE A Long, Hard Road Ahead Calling Customers
Nowhere are the prophets of doom more vocal than when it comes to online retailing in India. A miserable year hasn't helped. Diwali-a period when 20-40 per cent of annual sales of consumer goods is effected-passed by without any sound or glory. Business-to-consumer sites realise they are staring at a long, hard haul. Says G.B.S. Bindra, CEO, firstandsecond.com: ''Nobody got into it expecting profits. Every serious player knew that it will take some time to break-even.'' Adds R.K. Caprihan, who recently merged windows2shop.com with e-tailer jaldi.com: ''People rushed in without sound business decisions, and customers hardly got any benefit.'' Now, the realisation has set in that speed and scalability are just not enough to take care of business that entails building the confidence of consumers. Get them online, for sure. But get them to buy too-and not only by serving up heavy discounts. In other words, cut down on hefty marketing outlays; instead, focus on direct marketing to the consumer. It goes without saying that cash is gold in the dotcom space. Stresses Gautam Thakkar, Chief Marketing Officer, baazee.com, a consumer-to-consumer auctions site: ''Revenue capture is a critical function. You could do a million transactions, but not generate enough revenue.'' Certain goods-electronics and mobile phones-have been registering sales in the online auctions space, where bidorbuy.com is also present. Another space has been opened up by the bulk-buying site, buyasone.com. Most pure-play e-tailers-with the notable exception of Rediff-are trying to build offline components. Lurking in the wings are the consumer durable firms-Samsung, LG, Philips, BPL, and, perhaps later, Sony-who are building an online presence. It's quite clear that the e-tailers' biggest advantage-a marketplace, with comparison shopping-must deliver in terms of the shopping experience. Explains Bindra: ''In the offline world, the customer does not demand service, whereas they demand world-class service online.'' On the positive side, there's consumer acceptance of the internet as a buying medium. With issues like online security, internet penetration, and logistics being looked into, the tough job at hand is changing consumer mindsets. E-tailers' timeframe for achieving that critical mass differs from six months to three years. A shakeout is imminent. Rediff and Sify have acquired NRI online properties to push for e-commerce in the US. Most Indian sites don't have that privilege. -Vinod Mahanta First
Person
Advertising on
the Net is small,
The industry begs to differ. ''Do advertisers want to spray and pray that it reaches the target audience. Or, sharp-shoot and measure results?'' says Alok Kejriwal, CEO, Contest2Win.com. ''Advertising on the net is not dead. Mediocrity is dead, though,'' shoots V. Ramani, CEO, Mediaturf.com, a division of Euro-RSCG. While the bluster is evident, there's no denying the potential of the medium to deliver innovative and focused advertising. The problem really emanates from the plethora of insipid banners online. ''After all, if the print strategy can't work on TV, then how can it be true for the net?'' quizzes Pankaj Sethi, CEO, Media2india.net. The road ahead has being forged by a few players. At one level, contest and gaming sites like hungama.com and contests2win have initiated innovative solutions. So have the agencies. For instance, each time a surfer deletes a message in his in-box on sifymail, out pops a message, 'Dho Dala'-Clinic All-Clear's punchline. Says Satyajit Sen, Associate Veep, Trikaya Grey: ''The Net has an upscale audience and focused seekers. After that, it's my job to see that the clicks and sales happen.'' That's the only tonic for ad-seeking portals. -Shamni Pande M-commerce The ads make it look easy. Too easy. The fact remains that though serving up m-commerce in the face of healthy mobile phone subscriber growth rates should be a cinch, it isn't. At least not for another year or so. Says Dheeraj Aggarwal, CEO, WAP-enabled site Sharekhan.com: ''In the online broking space, transactions through mobile are almost zero.'' Adds the director of a Delhi-based research agency: ''There aren't enough reasons for one to go to the net through the mobile. Given the low uptake of e-commerce in India, transactions through the mobile are just not happening.'' Why? The issues are clear enough: high cost of airtime, cost of handsets, low bandwidth, security issues, and lack of applications. Though Rediff has been taking the lead in initiating tie-ups with cellular operators to offer WAP-content-that's e-mail, news, stock and weather updates-the real action has to come from the banking sector. In particular, ICICI and HDFC have tied up with cellular operators like Airtel, Orange to offer certain mobile banking services to the customer-but one still can't transfer funds from one bank to another via a mobile. Indeed, security and authentication issues hold the key to getting users online. For, handset prices are expected to drop. ''Getting to shopping in the current format is painful and involves use of multiple keys. I see a trend towards approaching one-click shopping,'' adds R. Ramaraj, 49, managing director, Sify. That is voice-plus-click. Finally, the greatest effort has to go in integrating m-commerce to e-commerce, and developing offline models. Only then will mobility pay. -Pooja Garg & E.K. Sharma
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Since the launch, we've been successful at
getting a fair number of people to seriously look at buying a TV or a
fridge off the internet. However, the key and most important element we've
learned in the process is that the consumer is not swayed by any fancy
marketing concepts-he's in there looking for better deals, prices, and
customer service. With the number of consumers limited, what's emerged is
that the internet community as a whole must live up to that promise. All
of us must. The failure of even one e-tailer in this space to meet these
aggressive demands of the consumer will result in all of us being tarred
with the same brush. So, these are times where all of us hope everybody
will do the right things!
The online advertising industry is looking
ahead. It has to, considering it's serving up a pie that is estimated at
under Rs 60 crore. That's 0.6 per cent of the total ad spend in India. The
reasons are obvious: there are just too many sites chasing a small
internet audience. Advertisers don't see a critical mass online.
Click-rates lie below 1 per cent. A high proportion of online ads come
from other dotcoms, hardly reliable paymasters. No wonder, as a percentage
of total spends, online advertising in India is below international
trends. It looks quite gloomy.