Interview Snippets - Strategic Nuggets from Thought Leaders

George is a thought leader on eCommerce and is the CEO of Rimm-Kaufman Group whereas Linda Bustos needs no introduction.

George : Do you see anything new that could change the world of eCommerce?

Linda: Mobile. Mobile commerce is not a new channel, rather a new screen that consumers are going to become more and more comfortable with. No longer do you need to be at your desk or at home to transact online. More people own a mobile phone than a personal computer, and people have their mobile devices wherever they are at all hours of the day. And new devices like Kindle and iPad make the user experiences on mobile devices much better than tiny smart-phone screens. So ebusinesses will need to understand mobile design and usability for their websites and also consider what applications will be most helpful to their customers. We’re not at critical mass yet, but we will be very soon.

George: How important is having a mobile strategy in 2010?

Linda: The last 3 years have been dubbed the “Year of the Mobile” it seems – and mobile commerce has certainly grabbed the attention of the largest retailers. Every month we hear of Internet Retailer 500 companies launching new mobile sites, redesigns or mobile applications.

While I still don’t think customers are ready to purchase online through mobile sites (biggest reasons are fear of data security and usability issues), I think it’s important for retailers to get their feet wet now to get over the learning curve. Having a mobile presence is also helpful for customer research on-the-go, and can be very helpful for customer service (think of order-tracking, back-in-stock and in-store pickup notifications, etc). Even if you don’t drive sales through the smaller screen, it can add value to your business, especially if you’re a multichannel retailer with brick-and-mortar stores.

My thoughts:

It is high time, big online retailers take the deep dive and traditional retailers use this channel seriously.

Will standardization in Retail help ecommerce in India?

Though extrinsically different, fundamentally brick & mortar retail and online retail have many things in common. Starting from distribution concepts such as supply chain and network distribution to inventory management and efficient warehousing capabilities; both channels of retail delivery feature these important value chain components. In India, unorganized retail scores over organized retail in terms of volume and value of purchase. On the other hand, the adoption of ecommerce in India is darn slow because of many tangible and intangible reasons. Proponents of online retail in India, including me, feel that standardization of brick and mortar industry would abet the growth of online retail in India.

With the standardization and consolidation of retail industry, the supply chain infrastructure would be streamlined. Barring a few big etailers, most of the other online retailers use drop shipping as one of the most common fulfillment strategies. As a result late delivery, out of stock situations, sour online customer experiences are largely prevalent. I strongly feel that once standardization of retail industry takes place, we would witness three significant changes – more effective ways of managing inventory, efficient techniques of replenishing inventory and use of optimized network distribution to reduce logistics costs. These in turn would alleviate the uncertainties related to online retail.

E-tailing in India can be a success if the eTailers change their business models and understand the “Determinants of Shopper Behavior in E-tailing”- E-tailers should create economic value for the Indian customers rather than a curiosity value. Since shopping is still a ‘touch-feel-try experience’, standardization across manufacturers and fulfillment partners would make customers confident about purchasing products online. The consumer purchasing the product has a fair idea about the offering - she can actually visualize that her blackberry is more or less as the same size as her iPod or credit card. In the United States, one prefers to purchase electronic items from the “World Wide Web” because customers know exactly (quality, size, volume) what would be delivered at their doorsteps.

Standardization of Retail in India would entail predictability of fulfillment as far as online retail is concerned. Shrinking gross margin and EBIT have made the national retailers realize the importance of technology automation across the value chain. All the players in the entire value chain - in the process of cutting costs – have adopted sophisticated technology integration in order to effectively manage the flow of merchandise and goods. This technology sophistication would in turn help the online retailers; as most of the fulfillment partners, vendors and suppliers are common for both delivery channels – online and offline.

More often than not we have seen ineffective inventory management, because of over-forecasting, leads to excess inventory conditions. In order to make way for fresh season merchandise, retailers need additional delivery and sales channel to free up the excess inventory. In his blog, Darpan Munjal aptly pointed out that “Web is a great channel for the clearance strategy, and retailers will be able to offer deep discounts online to clear up the inventory before they get ready for the next buying season”. As standardization of Retail happens in India, this would become a regular feature with the online channel becoming an important delivery channel for all brick and mortar retailers.

MetalJunction's pioneering work

MetalJunction, a sister concern of mJunction, is the largest e-marketplace for steel in the world, having sold over 4 million tonnes of steel for its clients and currently selling at an average rate of 150,000 tonnes per month. The buyer community of 5400 plus buyers comprising traders, fabricators, re-rollers and end-users have placed their confidence on MetalJunction because of the operational efficiency, transparency and equal access that the platform provides. MetalJunction's clients have experienced significant benefits on migrating to online selling. Immediately on migration, from their traditional sale process, to the metaljunction online process, their price realizations increased by up to 23%.

Recently in IIM Calcutta, I listened to a talk by Mr Viresh Oberoi, the Managing Director and founding Chief Executive Officer of mjunction services limited. It extended my thinking horizons and made me realize that ecommerce and specifically e-auction for B2B market also has a huge potential in India in addition to the traditional B2C ecommerce we talk about. Going by the supply chain rule book, the principals for a B2B and B2C ecommerce are the same, the only major difference being bulk purchase in a B2B scenario - this apothegm has been proved by Metal Junction in real life.

By using technology, primarily the internet, mJunction provides the steel companies with an opportunity to cut costs and at the same time increase revenue and enhance margins. The internet increases the reach of the companies in discovering new buyers, which in turn bring about quicker realizations. MetalJunction,a subsidiary of mJunction, pioneered the concept of eAuctions for steel by moving the entire process of auctions to the Internet. With state-of-art technology and unique services to support buyers and sellers in the decision making, financing and logistics stages they make sure that their auction tools help enterprises realize their sales and procurement goals with considerable cost savings.

Mr Oberoi's speech was astounding. In a country like India, where commodities such as Coal are heavily dominated by powerful lobby groups and run by Mafias in places such as Dhanbad, mJunction did a remarkable job in circumventing them and the all pervasive Indian bureaucracy in making the eAuction of Coal possible.

What is more heartening is that metal junction has mastered this supply chain process and is slowly moving into B2C sector such as financial services, auto and logistics. From his speech, I could gather that there is not much of a difference between B2C and B2B selling, specially from an ecommerce perspective.

A lesson for entrepreneurs - If you feel B2C segment is saturated with ideas of various kinds, check out B2B segment. However, to make a powerful entry into B2B segment one needs a backing of a strong promoter with good financial standing. One also needs a sound knowledge of the particular industry and a solid understanding of the tenuous human interplays.

What eBay has pioneered in B2C segment, Metal Junction did the same in B2B!!!

Conversion Optimization

Conversion Optimization (or Conversion Rate Optimization) is the science and art of getting a higher percentage of your web visitors to take action by becoming a lead or customer. It is a science because one cannot simply “guess and hope” which changes to the web pages would achieve a higher conversion rate. Hence, it calls for testing valid hypotheses, running controlled tests, and evaluating results. It is an art because it incorporates the aesthetics understanding also. A statistician or engineer alone cannot create the visuals and messaging that engage the web visitors. It mandates an organic and structured process which incorporates the learning from thousands of test results.

After the initial electric buzz of social media, companies are constantly asking for ROI(Return on Investment)? They argue that "What's the use of getting a ton of traffic to your site, if it doesn't impact our bottom line? That's where Conversion Optimization fits the bill.

Any online marketeer would agree with me that marketing response rates fluctuate widely from hour to hour, segment to segment and offer to offer.This phenomenon can be traced to the inability of humans to separate chance events from real effects. Moreover, drawing conclusions from a small sample of data - which inevitably has spurious patterns - is tantamount to some very poor decisions. Hence lot of companies extensively track click streams and use statistical methodologies to mitigate the urge to see patterns where none exists. These methodologies, or “conversion optimization” methods, are then taken a step further to run in a real-time environment. The real-time data collection and subsequent messaging as a result, increases the scale and effectiveness of the online campaign. Few good Conversion Optimization companies are listed below.

WiderFunnel’s Kaizen Method for Conversion Optimization


The Kaizen Method ensures that the Testing, Web Analytics and Website Design services work together to achieve client's business objectives. “Kaizen” means “continuous improvement” – and that’s what the client gets. As a starting point, this method analyze web analytics data, business goals, marketing research, competition, technical environment and demand-generation campaigns. The resulting Kaizen Plan identifies and prioritizes all conversion optimization experiment and web analytics opportunities to maximize the conversion rate improvement.

Invesp's Pii

Invesp believes that 14.56% conversion rate is possible and they have done it consistently over a period of time.

Key Points to note about Pii

• E-commerce websites report an average conversion rate of 2.2% according to shop.org
• Top 10 converting e-commerce sites report an average conversion rate of 12%
• Conversion rate optimization can provide up to 1/3 increase in profit
• Invesp's clients report an average conversion rate of 14.56% in 2007
• Invesp's clients report an average conversion rate of 9.8% in 2008

Few more resources you can read -

SearchEngine Guide
Squidoo

Life of Pi

I am sanguine that you all must have read the book by Yann Martel – Life of PI. Though a wonderful book by itself, today’s write-up is about a somewhat eponymous e-book reader named Pi, which has been launched by Infibeam.com – India’s premier shopping portal. This is an indigenous effort in supplanting its more expensive cousin – Amazon’s Kindle. As an Indian we definitely need to be proud of this feat, because the ideation, development and execution have all been done from scratch by Infibeam.

Delving on the technical details is not the reason why I wanted to write this article. However, some technical specifications are required to set the ground for a more strategic discourse. Infibeam Pi is small, sleek, and lightweight with 10 mm thickness and a weight of just 180 gm. With the 6" E Ink (R) display, reading an e-Book on Pi, gives the reader an experience akin to the one while reading a paper book. The 8-level gray scale with no backlit display provides a glare-free reading experience everywhere. The device can store up to 500 standard ebooks in its internal memory of 512MB and also has a SD card memory expansion slot that supports cards up to 4GB.

As any other product, adoption of Pi would follow the same Bell shaped “Product Life Cycle” curve, however, I feel it would be an eventual hit because of the following reasons( I could think of many reasons but these are, in my opinion the most important ones)

• It is an additional channel for content delivery - For long, the content creators and deliverers including the portals were looking for an additional content channel beyond websites and mobile. Pi’s coming of age should be a welcome respite to their long yearning search. To answer the question - why would content creators be interested in Pi? – I could argue that Pi being a mobile (you can carry it along) device could incorporate technological inventions in order to push location based and contextual advertisements to the e-book readers. Few years down the line Pi bundled with technological advances such as “Location Based Tracking” and “Augmented Reality” would be a force to reckon with and could completely change the way how content is delivered.
• It would abet vernacular adoption ­­­in India - Internet users generally preferring to read in local language has gone up from 59% in 2007 to 72% in the year 2008 – this was the message that came out loud and clear from a survey done by JuxtConsult couple of years back. Taking a cue from this survey, Infibeam is working towards a future where newspapers, magazines, books from local publishers, digital content in regional languages, textbooks and educational material would be available on Pi. With vernacular adoption being the recent trend in India, I believe, Pi would unlock the market, if not now but definitely in the near future. This is not to say that I am not aware of the challenges of vernacular adoption. However, challenges such as “Limited PC penetration in the country” and “Non Standardization” could easily be taken care of by the introduction of Pi.
• It is a multipurpose vehicle - Apart from the mundane yet mandatory features to boast about which includes readability, low cost, lightweight and local language support, Pi provides a way to listen to music while reading. Anyone who frequents ‘Borders’ or ‘Barnes and Noble’ would agree with me that coffee and bookstore go hand in hand. Likewise, Pi would provide a convergence platform in which music and book would be inseparable providing a more engaged experience for the reader. I can foresee a lot of prospective collaboration happening between e-book publishers and music companies in the years to come. Is “Tips and Chetan Bhagat” listening?
• It would change the book publishing game - It is a known fact that authors make the least money despite toiling hard for their books. Publishers, on the other hand make the most. However, Social media and Social influence marketing is forcing these publishers to rethink their value chain and their position as B2B companies. I feel, the introduction of Pi would act as a disruptive innovation circumventing the problems besetting this domain.

With the poor digital infrastructure compounded by the postponement of 3G auction, Pi would have an initial lukewarm response. However, as the ecosystem - digital infrastructure, author-publisher nexus, customer awareness - would evolve, the consumers would then realize the benefits of Pi thereby pitch forking its adoption process as a reinforcing loop. I believe “Pi” would curve its own niche in the year 2011.

An insightful survey for your next business move

This is an interesting survey I did during my internship. You can download the survey results from here. The survey results would provide a lot of strategic inputs to the small etailers as well as to the traditional brick and mortar firms.

The participating companies are listed adjacent to this paragraph. I interviewed the decision makers (CXO level) from many online retailing companies as well as traditional retailers.

The rationale for interviewing brick and mortar retailers was to understand their frugal presence online. In their answers lie a huge business opportunity for the online retailers - big and small. If you could read between the lines, you would understand what I mean.

This survey also would guide the novice upstarts in figuring out where the next business opportunity lie and would help pave ways in understanding how to co-create with competitors to build a ecosystem which would be profitable to all the players in the value chain - sourcers, fulfillment personnel, suppliers, distributors, warehouse owners, logistic providers and after sales support service providers.

Internet Retail Vision 2010 - A new beginning

Wirefoot India Technology (PVT) Limited hosted a day long event on Internet Retail, the Internet Retail Vision 2010 on the 28th of January 2010 at The Grand, New Delhi. The event focused on exploring the current Internet Retail scenario of India, its potential and the way ahead to explore this potential in a manner positive to the retail industry.The underlying theme was to help core retailers appreciate the benefits of Internet Retailing and address their concerns and issues. I wrote this article for the seminar, which eventually was a grand success. Click here to watch the webcast of the seminar.

Augmented Reality is not a fad anymore

Any experience that enhances the reality is augmented reality. It is a concept/device/protocol that enriches one's viewing experience. In the realm of online shopping - and specially for high involved purchase or purchases which evokes "touch-feel-try" response - augmented reality could play a very important role and can be undoubtedly charted as the future of online shopping.

To start with lets understand what is AR? Wikipedia says: “Augmented reality (AR) is a field of computer research which deals with the combination of real-world and computer-generated data (virtual reality), where computer graphics objects are blended into real footage in real time.” Here is a short video explaining its evolution.

A lot have been speculated about AR, however, I believe it will be part of mainstream online retailing application this year.

What is Layar?

Layar is a free application on your mobile phone which shows what is around you by displaying real time digital information on top of reality through the camera of your mobile phone.

Layar is an enabler. It enables content partners to offer (branded) Augmented Reality experiences. It also offers an easy interface to discover and use these Augmented Reality services. Layar, which is the first AR browser, combines GPS, camera, and compass to identify your surroundings and overlay information on screen, in real time. It runs on IPhone and Android.

Not only that, Layar is an example of markerless AR. This is a more advanced form than web cam based marker AR, which, for example, is used by the US Post Office. Markerless means that it just works and you don’t need a black and white marker in front of the camera view. To see a demo of Layar, please visit here

Uses for online retailing :

AR is not a technological brilliance without any real world application. Zugara, an interactive marketing agency, has built something a bit more practical for the time being. It’s put together the Webcam Social Shopper, offering a way to help you try on clothes online from the comfort of your bedroom.

At least, it lets you overlay a static image on top of your body and pretend you’re wearing it. Which is sort of a start!!!

From a technological standpoint, the application is pretty cool. While other similar clothing applications require you to upload a static image of yourself, the Zugara app uses your web cam, detecting where you’re standing in a room and adjusting the position of the overlain clothing appropriately. Even better: instead of having to return to your keyboard and mouse to try on a new outfit, you can simply move your arms above your head to navigate through the various clothing options. To see a demo please visit my blog entry

What is Holition?

• It is a revolutionary Augmented Reality tool for online shopping. Holition gives you the ability to demonstrate virtual products directly onto target audiences either online, at events or in-store.
• For the first time ever, virtually try on a product in real time which does not exist.
• Holition is an easy to use, live and interactive marketing solution.
• Designed to complement existing multi channel marketing solutions; and stand out from the rest.

Ace Jewelers Group is the first online jeweler in the world in which people can try on jewels virtually via their website using Holition.

Though AR is used extensively by the small retailers in the US, for India, it is yet to come of age. I hope the examples I collated gave an overview of the game changing reality of AR. I sincerely believe that, given the complex market ecology of India, it would open up innovative avenues of its own use thereby helping in the evolution and adoption process. For more information please check Darpan Munjal's blog.

Determinants of Attitude Formation in the Context of Online Retail Shopping in India

Palpable advantages for marketers to sell online include the ability to reach a large number of consumers worldwide; to reach out to the younger lot of population; and to fight the constraints of sale through traditional means of physical presence in stores. These unhindered reach ultimately increases productivity and efficiency of the marketers.


Advantages for customers to buy online include easy and wide access of products, services, information; overall convenience; and direct effects of functional and utilitarian benefits. However, some customers prefer to shop and browse on the internet due to the fun, enjoyment and excitement involved, that is satisfying their emotional and hedonic pleasures, either as individuals or as social groups. So, a consumer’s motivation to shop online may be either due to an utilitarian motive as a ‘problem solver’ or a hedonic motive in terms of ‘fun, fantasy and enjoyment'.

The modern Indian consumer is technologically aware, often educated and comfortable. His attempts to shop online are due to an advancing technology as well as consumer characteristics in terms of demographic, psychograhic, as well as situational influences. The attitudes toward online shopping is thus affected by the web experience of usefulness and enjoyment; consumer demographic and personality traits; situational factors and previous online shopping experiences.

Has Social computing become a mature channel?

The traditional marketing fellas prognosticate that despite the surge of digital marketing, traditional marketing would not loose its sheen. Well, I have listened to some great discourses by leaders in this field who bet on digital marketing being the future of marketing. But the question is how successful would that be in India?

A country so vast, a country so diverse in every aspect - digital marketing becomes a challenge; for the simple reason - pushing vernacular related ads. With 22 languages in India, the question becomes which language to adopt. Not always population segmentation gives the right picture. Its a complex web of factors such as population, literacy, technology adoption capability, PC penetration rate, the cost of broadband in the state and many others. However, Social computing has become a mature channel in the west. The infrastructure and the fast technology adoption process of the masses helped in the spread of digital marketing. Forrester came out with its annual report on "Top Social Computing Predictions For 2010". It is a paid report, however, i have picked up some learnings from the blog of Brian Solis.

According to the report, the role of the new marketer will:

- Focus on outbound messaging in addition to consult with sales, customer service, and human resources on how the brand must be communicated in every consumer interaction, every tweet, and every touchpoint.

My view: Its easier said than done. We need to realize the enormous monitoring cost because managing impression in the vast world wide web is not a mean task. Would benefit outweigh the cost is the question we need to answer.

- Fashion programs that are seamless with the actual product and service experience beyond the imagination of creative messages.

My view: This is nothing new. The traditional marketeers used to do this long back.

- Respond to and be part of the ever-changing dialog with consumers, not plan bursts of communication on a yearlong calendar

My view: Very true. Question is "How to achieve this?" Responding meaningfully to the ever-changing dialog with consumers means vastly increasing the screening and monitoring cost. This is a typical chicken-egg problem. Without the other benefits would not follow.

- Look beyond the quantity of friends, page visits, eyeballs, readers, and viewers to measure changes in consumer attitude and intent

My view : I have always been a proponent of Semantic search and Netnography. These two growing stars of science/ethnographic studies understand the human sentiments behind the humongous data strewn around in the web. The biggest challenge of Social Media Marketing and Monetization of Social Networking would be to rightly gauge the feelings of the "conversation of the consumers" in the World Wide Web. So I do believe that we have to look beyond the simple numbers and concepts such as eyeballs, quantity of friends. Quality would surpass quantity in 2010.

- Listen to and engage customers one to one

- Build relationships and not campaigns

- Create experiences not impressions

My view: Theoretically easy to express, practically difficult to implement. We need to remember that in Social Media Marketing, execution is the key. Lofty ideas and vapid educational discourses hold no water if they are not executed properly. Isn't it an oxymoron
"Listen to and engage customers one to one" when we know there are millions of consumers online. My question is how can you possibly do that? Are we aware of the CAGR growth of online population of the world?

On Social Media ROI, Brian rightly said that "Measuring sentiment analysis, would-be referrals, and increases in share of voice are entry-level techniques that do not necessarily capture the potential of socialized media channels."

To end this please enjoy a good video on the topic - Has digital marketing usurped traditional marketing?

Barriers of Vernacular adoption

The barriers towards widespread adoption of ICT can be divided into two major groups. Firstly, infrastructural barriers in using computing technologies and secondly, barriers in using online content. The former sets of barriers are enumerated, below:

Limited PC penetration in the country:

Though falling prices of PC have fueled the growth of PC usage in the country, but this growth is limited to the affluent sections of the society. At the current price level, PC remains a far fetched phenomena for the ‘not so affluent’ sections in the country.

Availability and awareness of local language applications:

In most cases localisation is considered synonymous with translation. There is limited awareness as well as availability of localized applications beyond translations. The need is to acknowledge that localisation also encompasses significant, non-textual components of products or services in addition to strict translation.

Non-standardization:

There is absence of proper standardization in Indian language computing with respect to the following:

• Script level standardization
• Font level standardization
• Standardized transliteration

This absence of standardization leads to "a usage propriety technology" which further deters standardization. Also, this limits the scalability and flexibility of the solutions and creates dependence on a single vendor.

Lack of formal language based IT training:

In India all computer based training is imparted in English language. Not only this, in most schools and colleges where the medium of teaching is vernacular, computers are taught in English. There is no formal training in vernacular language for usage of Computers.

Difficulties in product design:

Since inception computers have been using a Western-centric product architecture with keyboards in English. Countries with localized offerings on keyboards have successfully created keyboards in their vernacular language. But for a multilingual country like India the situation of language standardization is difficult. All relevant input methods must be supported if local users are to have access to the equipment.

Belief that PC and the Internet are for English literates:

A common perception amongst the non English speaking population is that PC and Internet is only for those who know English. This is more rampant especially among the house wives and older men. They feel that there is a limited scope of what they can do online as they associate Internet and PC with the English language.

Low awareness level for availability of content in local language:

As per I-Cube 2007 data, almost 35% of the Internet users are not aware of the availability of content in the Indian languages online. This number increases to 53% for Internet users in Non-Metros. In order to increase the usage for Indian language content and in turn drive more traffic online, the masses need to be made aware of the content and applications available in their language.

Lack of supporting hardware:

Even though content and applications are available in vernacular language, the absence of adequate infrastructure creates a hurdle for its usage. For example, for inputs related to text in vernacular language the user has to type the phonetically similar English alphabets so as to get the right word in vernacular language. So it is more of a trial and error rather than systematic input of text through supporting hardware.

Lack of websites offering interface along with content in Indian language:

The most popular technology used by various websites providing content in Indian language is transliteration. It requires user to type Indian text in English language, which is then converted in the desired Indian language. The current segment of the Internet users using Indian content online is the English speaking population. However, to attract and retain the non-English speaking population, the platform needs to be provided in the Indian language. This is currently being provided by very few players.

Limited revenues from advertising:

According to a leading portal, there are few Indian language specific websites. As a result, advertising on Indian language sites is yet to take off. The web versions of newspapers have an edge over others since they already have relationship with advertisers. But stand-alone sites may take some time to get any traction.

Lack of contextual delivery:

At present transliteration and machine translation are the most popular technologies used by major websites in providing content in the desired language. However, such translation lose the context around the message that is being communicated resulting into a non-cohesive delivery.

These are by far the most plaguing problems restricting vernacular adoption in India. If you know of some more, please make me cognizant of the same.

Sources of my report:

IAMAI Report on Vernacular adoption - Click here
IAMAI Report on Vernacular content - Click here

Bridging the gap...

This is an article I wrote for the symposium -"Internet Retail Vision 2010" organized by Wirefoot Consulting to be held on 28th Jan in Delhi.

Consumers’ decision-making process has considerably changed with the introduction of the Internet as an alternative channel for shopping. The new wave of consumerism coupled with increasing urbanization and burgeoning middle class with paradigm shifts in their demographic and psychographic dynamics have driven consumers frequently to use retail websites to search for product information and/or make a purchase of products. A report by Euro-monitor ratified the ever increasing importance of electronic retailing as an additional channel for shopping. The electronic retail growth of Indian market as estimated by Euro-monitor report stands close to 48% CAGR and in value term it is going to touch INR 27 billion(Rs 2700 crores) in 2010. The report also predicted that the contribution of internet retailing to non-store retailing is likely to be 46% this year. However, all these predictions have inherent assumptions which I feel do not reflect the reality. Amidst all the hype and hoopla about ecommerce, the reality is stark and hits straight onto your face – internet retailing has not yet taken off in India in a big way. Case in point: Out of 50 million online Indians, only 7 million have ever purchased stuff online. Here, I am not even considering the bigger issues that plague the ecommerce landscape in India. If one takes those into account the picture turns grimmer.

In the last few years, the belief that building Internet retail sites will automatically trigger customer patronage has been questioned and considered more a myth. This new medium of commerce has its own drawbacks such as reduced opportunities for sensory shopping, social shopping, face-to-face interactions with sales personnel, and the postponement of the consumption or enjoyment of tangible goods. The inherent limitations of the Internet have been compounded by poorly designed online storefronts, limited product selection, impersonal product descriptions, tedious checkout procedures, security lapses and privacy invasions. In this article, I would provide few tips to the online retailers which would help them bridge the ever increasing chasm between offline and online shopping experience.

1. Dynamics of online storefront - Few factors such as responsiveness of the websites, load time, navigability, interactivity, aesthetics and relevancy of search results play imperative roles in the complete “Online Shopping Experience”. Excitement and joy associated with shopping online because of attractive layouts and designs lay emphasis on the hedonic pleasures of a consumer which an etailer should definitely cash on.

2. Product views – To provide for an engaged shopping experience, all the products featured on the etailing site should have multiple product views, 360 degree views, views with clear dimensions and a provision to zoom in or out. In doing so, the etailer is reducing a user’s fears, uncertainties, doubts and dealbreakers (FUDDs). In the United States, companies such as Pixazza and LiquidPixels provide this kind of facility to a host of online retailers.

3. Product description - Most product descriptions are impersonal in nature. Hardly, they say anything about why someone should buy a product. Moreover, the descriptions don’t even try to create an ever-lasting bond by telling customers why they are going to love this product and how the product differs from the competitors’ substitutes.

Typical product description - Iceman Crewneck Sweater

The Iceman crewneck sweater is 100% Cashmoore® and great for casual or dressed-up occasions. It includes shark tooth detail at neck, color blocking on raglan sleeves and spandex binding at cuffs.

Personalized product description (HornyToad.com) - Iceman Crew Sweater

For the guy who cares but doesn’t want to work too hard to look good, the low-key Iceman crew has just enough spice in the sleeve stripes to inspire confidence without distraction. Guaranteed chill defying, the Iceman is comfortable, made from our gift-to-mankind, soft Cashmoore®. Easy-does-it details: shark’s tooth detail at crew neck, color blocking on raglan sleeves and spandex binding at cuffs.

4. Replicating offline shopping experience – An etailer should provide social shopping widgets for popular social networking sites such as Facebook or MySpace in order to supplant for offline social shopping experience. Technologies such as “Horizontal Sliders”, “Clickstream Tracking”, and “Proactive Chat Widgets” should be incorporated to replicate the personalized flavor of offline shopping experience. BoldChat.com - the company which pioneered the “Clickstream Tracking” technology - would be an apt mention in this regard.

5. Augmented reality – We all are aware that lack of tangibility is one of the main reasons for non popularity of online shopping. Inability to try a product (Touch-Feel-Try Experience) before buying acts as a barrier for some internet users. To that end, presence of an Interactive website facilitates two-way communication and evokes favorable effects on the overall consumer purchase decisions. Using technology such as “Augmented Reality”, a streamlined two-way communication could easily be established. A pertinent mention here would be a marketing agency called Zugara – It offers a webcam facilitated technology which enables the user to try her clothes online.


6. Security - It is the need of the hour for all e-tailers to adopt security measures and inculcate a sense of trust among online shoppers that data provided during online transactions would not be misused. Even a trivial thing such as the presence of a “lock sign” on the webpage evokes a sense of security.

7. Post transaction elements - Adequate attention needs to be paid towards customer service and distribution & logistics and these should be integrated seamlessly not only with the company’s existing website, but also with the company’s entire operations, online and offline. Importance should be paid on “Post-transaction” elements such as delivery schedules, warranty services, return and exchange policies, post-sales services and related technical support.

The etailers following these points religiously would certainly witness an increase in the customer conversion rate and a decrease in the customer acquisition cost. On a macro level, an adherence to the above-mentioned points would invariably facilitate the reduction of “skepticism of online retailing” to a large extent and bridge the increasing chasm between offline and online shopping experience.

Localization in India

Localisation can be defined as “the process of developing, tailoring and/or enhancing the capability of hardware and software to input, process and output information in the language, norms and metaphors used by a community” (Source: Digital Review of Asia Pacific 2007-08).

It is evident that China, Japan and Korea are the most matured markets in terms of localisation. These countries have been very active in their efforts towards standardized localisation. The result of this is that most of the software is already localized in these languages and now these countries are moving towards localizing cutting edge technology applications such as OCR and Text to Speech.

Technologies available to enable writing in Indian languages:

There are three technologies that enable typing in Indian languages. These are as follows.

Remington: It is suitable for those who have learnt typing on Indian language typewriter.

Inscript: The inscript keyboard that enables typing in Indic language from the standard keyboard is being provided by Windows, Linux and Macintosh operating systems. It also includes Virtual keyboards being provided by Indic content websites.

Phonetic: It works on the transliteration from the Indic text written in English into Indic text written in the same Indic language. This technology is preferred by the Bloggers and the segment of professional writers that publish stories or poems online.

Brahmi: A recent innovation has been the offering of Brahmi-based keyboard. In this type of keyboard, vowels and consonants are arranged based on the organization of Hindi characters.

Hardware: Type of Indian Language Keyboards

Bilingual Keyboard are available in different languages, in addition to English. The bilingual keyboards find their usage in government departments for exchanging bills from rural sections, maintaining a copy of official communication in Hindi and or local languages and interoffice work at lower level. PSUs also use bilingual keyboards as they require Indian language for written communication, report generation, etc. Households find usage of these keyboards limited to children’s project work and interactions (written) with government departments. Another localized offering on the keyboard market is a Gesture-Based Keyboard (GKB). It uses a pen-based technology that allows the Indian script to be recorded and stored directly on the computer.

Rediff has shown considerable interest in this sector, thereby acquiring companies such as Tachyon and Eterno; both these companies provide transliteration products for web as well as mobile.

The Vernacular market in India

The growth of PC and Internet penetration in India has been impressive in the past few years. However, the bulk of this growth has mostly been in urban India thereby widening the gap between rural and urban India in terms of adoption of Information and Communication Technologies (ICT). Considering this divide, this writeup, which is primarily taken from an IMRB Survey done in 2007, examines aspects of localisation and regional content provided over the Internet. On a passing note to ratify the findings of the survey I would like to allude to another survey done by Euromonitor. The survey posited that Internet users generally prefer to read in local language had gone up from 59% in 2007 to 72% in the year 2008.(The data is a bit old)

The premise this report attempts to evaluate is that the traditional media (i.e. television) adoption rates increased once the content offered was more regional in nature, a similar spurt in usage can be expected once the digital media such as the Internet provides localized and regional content.In addition to taking key conclusions from the IMRB survey, I have added some of my views and inferences which I gathered while researching on this topic.

Upon conducting primary as well as secondary research, the IMRB report arrived at the following conclusions:

1. The characteristics and orientation of Indian populace towards consuming print, audio and visual communication is regional and localized in nature. They seem to be more amenable to communicate in the language they are more familiar with. English seems to be their less preferred choice of language.

2. Following the patterns in television and radio medium, the key to unlocking the doors to widespread adoption of ICT in India lies in achieving the mix of infrastructure, application and content.

3. There is a difference in the usage as well as demand of vernacular content among the Indian populace. While the urban population is predominantly occasional user of vernacular content and indulge in local language access and exchange on a cyclical basis, the rural population uses the vernacular content very infrequently. The reason for this difference is primarily because of the non-availability of infrastructure as well as content in vernacular language.This is where I feel the next round of organic growth would happen for ecommerce. Increase in the consumption of Indic languages would bring the so called marginalized population into the realm of internet in general and ecommerce/etailing in particular. Many companies, I know of are investing in transliteration product for the web and mobile.

4. For the digital localisation or vernacular industry to take-off in a big way, there is a need for digital content that is designed to serve daily and important informational needs of rural as well as urban population. For rural areas, as an example, an apt application would be providing medical information through public access computers. Research and development efforts are also needed to provide predictive translation initiatives such as context-specific literal translation as well as advanced solutions such as Optical Character Recognition (OCR) and Text-to-Speech. Given these initiatives by the public as well as private sector, we expect that India will catch up with the highly developed localized markets across the world.

Few forms of content delivery:

Disaster blogging is an interesting facet of this vernacular adoption phenomenon that came to the fore during the time of the Chennai tsunami, Mumbai flood/rains, Mumbai blasts and the like. In addition to above, almost all the major media houses such as NDTV, CNN-IBN and Business Standard, are trying out blogging to tap stories and comments from citizens. CNN-IBN has gone ahead and announced a citizen journalist award for posting best story.

Vortals

The current bouquet of Indian language offerings is mostly news. These vortals offer news in Indian language as follows:
• International news sites offering international news in Indian language.
• Websites of traditional newspapers and news channels offering news in Indian language. The web versions of their newspapers include Indian language papers like Dainik Jagran, Navbharat Times, LokTej, etc. Their USP is in providing not only local language interface but also news at local level in addition national and international level news.
• Portals collating news from various sources like international news from Reuters, national news from PTI and publishing them in Indian language.

Content, application and infrastructure would determine how easily vernacular content would penetrate the masses. Infrastructure comprises access points, such as kiosks, public access, mobile phones and enabling devices such as keyboards and peripheral devices. These sets of infrastructure need to be in the Indian language interface so that it is easier for the users to interact with the technology in the language they are comfortable to them. To ensure an end-to-end local language delivery, Applications as well as Content need to be provisioned in localized language. Exemplar applications in ICT include facilities such as messaging, web browsing and the like. Content are sets of information that could be exchanged and accessed through these applications. The content that is available today on the Internet is largely in English and is location independent. The task is to make this content available in the dialects spoken in India. However, given the diverse socio cultural background in India this is a complicated task. Mere literal translation of the content in local language might not ensure adoption. A context-aware translation, on the other hand, is needed to guarantee widespread acceptance of ICT. Once infrastructure, application and content is available in Indian language a bulk of the population which is not literate in English would be able to relish the benefits of technology.

Critical trends of the future

For any ecommerce company - to make it big in the next leg of growth – they should be aware of the critical trends of the future. An awareness of the critical trends of the future would give them a platform on which they could make their next generation offerings. According to me the 3 key trends of the future are as follows:

1. Web is becoming more personalized & social

a. Web 2.0 to Web 3.0 – Intention web

Web has moved from Web 1.0 to Web 2.0 and has since graduated to Web 3.0. Generation of Web 1.0 has seen the emergence of companies such as Amazon where the main focus was on ecommerce. In the era of web 2.0 we saw simultaneous upsurge of three factors – commerce, content and community – and companies such as Facebook and MySpace hold fort. Web 3.0 was all about personalization and socialization – A congruous mélange of Community, Content, Commerce, Context, Personalization and Vertical Search. The next 2 years would witness companies in Web 3.0 space.

Jeremiah Owyang, the founder of the word “Intention web” has some soothsaying thought in mind when he coined the term. According to him World Wide Web as it stands now is not fast enough. Web has, in my words, graduated from Asynchronous to Real time to Intention web. Search, which is the facilitator of getting information from web, is based on past data. It does not capture the real time intention of consumers. That is why, these days we see twitter results being part of SERPs. To read more about this click here

b. Mobile Social, Social Media, Search Marketing, SEO

I can write pages on this, but that would be digging an already dug ditch, though in a positive sense on a Keynesian note. There is so much that’s happening in this area that I would not be able to do justice in few words. All said and done, mobile social, social media, search marketing and SEO have done wonders in the area of digital marketing. I would write separate articles on these topics later.

c. Collaboration ( Wikis, IM, Blogs, Microblogs etc )

I cannot stress on the fact that Collaboration is the next big thing. What we see now is just tip of the iceberg. With money being poured in technology advancements such as Captology, Mobile Persuasion, Semantic Search, Netnography, and Augmented Reality collaborative solutions would chart a new growth phase.


2. With 500 + million mobile subscribers consumer internet is heading the mobile way.

a. Advent of 3G

We would see a paradigm shift in the market place when 3G comes of age. I personally believe that the demand for content and to be more precise, rich content would be generated from the rural and SEC D&E town and cities. With the less clogging of 3G spectrum, content providers can push rich content via mobile to these hungry users. Opportunities such as mobile episodes (mobisodes) and Video on Demand service would grow leaps and bounds. The rural market has the ability to consume humongous amount of entertainment content – be it in the form of Akbar-Birbal stories or small snack entertainment cartoons or even infomercials. A huge untapped opportunity lies here.

b. Evolved ecosystem : m-payment companies

Everything is not hunky dory in the mobile commerce space. We already discussed that 70% of the profit margin is taken away by the mobile service provider. Even more so, the m-payment ecosystem is not so streamlined. We have to build a more evolved ecosystem where the service providers would no more fleece the m-payment companies.

Standardization across mobile applications again sticks out like sore thumb. Some service providers use symbian as operating system where as some use android. Consolidation or standardization is a must in this space to enhance user experience. If that does not happen users would be pissed off downloading apps which do not run on their mobile operating system.

3. An engaged experience (Shift from text to visuals)

a. Product images & videos are important in etailing

We have seen a tremendous thrust at least in electronic retailing on product videos. In case of images also, much more stress is being given on clarity, 360 degree views, multiple views etc.

The clarity of the above mentioned pictures makes all the difference between a comfortable and satisfied online shopping and a frustrating one. The clarity of the pictures, unambiguity of the price, a provision to use videos adds to the whole shopping experience. In the pictures one knows about the product details to a very granular level. The length, breadth, height and even diagonal of the product offering has been mentioned. As if, it is supplanting offline experience. The consumer purchasing the product has a fair idea about the offering - she can actually visualize that her blackberry is more or less as the same size as her ipod or credit card.

The more we can bridge the chasm between online and offline shopping the better for the etailing community per se. And, good images as well as videos play an integral part in making it happen. We would also realize the power of videos when I talk about Augmented reality in my subsequent blog posts. In a nutshell, mobile has changed the way content is delivered and online retailing on mobile is not far away.

Some may argue that I missed out vernacular growth as one of the key trends. I believe it is essential but not essential as the 3 trends I mentioned. I would talk about vernacular growth in my next blog post.

A parallel that I can draw from the US mcommerce market

No doubt, there is a huge potential for mCommerce for two key reasons. First, electronic transaction markets or e-payment markets are expected to grow at 70% over the next 2 years. Second, there are a lot of basic services such as bill payments for water, power, telephone and other services that are still not conveniently accessible in India. Without any hassles, most of the transactions that are taking place through e-commerce today can be implemented through mCommerce. However, there is still a lot of skepticism in the industry as far as ubiquity of retail transactions via mCommerce is concerned.

My skepticism on the mobile commerce hype is borne out of the following facts.

1. A comparison with USA mobile internet usage.


The following charts depict the

a. USA mobile internet user profile.
b. How often an average American uses the internet over the mobile phone?
c. Mobile commerce scenario in USA.

The US mobile Internet audience (over the age of 13) is about evenly split between those over the age of 35 (48 percent) and those under the age of 35 (52 percent). Additionally, there are approximately as many teenagers using the mobile Internet as there are persons over the age of 55(5.1 million persons age 13–17 and 4.4 million persons 55 and older).

Though it would be unfair to compare the mCommerce scenario in USA and India, we can definitely highlight a few noteworthy points here. The observations are based on the scenarios which exist at this point.

1. In a country such as USA, where technology adoption is much better, (than India) the mobile commerce usage - as far as purchase of retail products is concerned - is not encouraging. In the last histogram, it has been clearly depicted that only 9% of mobile commerce has been actual purchase of products and services. Out of this 9% product purchase we don’t know what percentage is actual product purchase from electronic retailers (Discounting the ticket purchase). We can safely assume that the figure would not be more than 4%.

In fact, a pedagogical deduction can be achieved taking USA as a benchmark. After so many years of the advent of mobile commerce, if in a country like USA – where people just lap up any new technological innovations – where retail product purchase over mobile is so abysmal, in a developing country like India it would definitely take some time (or a considerable number of years)before it becomes a force to reckon with.

2. Many retail goods are high involved purchase. Especially in an Indian context, many retail goods are high involved purchase. Goods such as books, music CDs and non-perishable grocery products are not high involved purchase, whereas apparels, perishable groceries, jewelries, automobiles and electronic items are. In India, mCommerce could be a successful proposition for all the low involved purchases.

3. Smartphone prices still expensive in India. In USA, the iPhone has increased mobile internet consumption by a factor of 13 times. In India, though data plans are available for many types of handsets, but a comfortable and enjoyable internet access over the mobile could only be through an IPhone, BlackBerry or some Nokia handsets. Unfortunately these handsets are still expensive in India and beyond the reach of a common man.

The government is aiding the growth by m-commerce in terms of releasing guidelines on mobile banking transactions. However, the adoption of m-commerce (especially retail product purchase) is abysmally low in India and the deterrent is the consumer purchase behaviour. By weeding out skepticisms and by educating the customers on the potential benefits, we can ensure mobile commerce to be a runaway hit.

To be successful in India

1. Separate thought process and design is warranted for m-commerce user interface. Seamless translation of the website to mobile would not have the same impact. A well designed and usable interface is critical. For example, properly designed mobile GUI would ensure that users can find information that they are looking for, perform transactions, spend time at the site, and return again.

2. Incorporate mobile persuasive tactics (the study of captology) to hook the customers, increase sales and signups and also increase traffic. ( Would pen down my thoughts on captology later)

Just a note here - Content delivery on mobile is going to go through the roof in years to come. Whether consumers would pay for those content - that's something we need to fathom; I personally believe people would. I would write a separate piece on the same.

Empowering the hinterland

mCommerce players believe that rural deployment of mCommerce is more important than its deployment in urban areas because of more opportunities.

1. Users in the metros are already equipped with card-based payments and online payment system.

2. According to statistics, around 50% of new mobile subscriptions every month come from rural areas in India.

3. The rural market in India holds a huge potential for deployment of m-commerce services and the subscriber base is expected to grow at a CAGR of 85% in the following years.

4. In India alone, two-thirds of the population is unbanked and has no access to formal bank accounts or financial services. So there is a large rural m-commerce market. The mobile channel provides a rare opportunity for India to leapfrog years of poor infrastructure development and actually bring the benefits of technology, low cost/mass market goods and services, and financial systems to the rural poor and lower working class.

5. There are many consumers in tier-2, -3 and -4 cities who have a lot of disposable cash but have limited access to physical retail outlets. For them, m-commerce will be a huge value-add.

Key barriers of mcommerce

Awareness: mCommerce services are at a very nascent stage in India, and the awareness among the people about various services being offered over the mobile platform is very low. The onus is on the industry participants to educate the consumers about the availability of various services and the benefits offered by each of them. CRISIL Research believes that educating the consumers and inducing them to try the services will be the greatest challenge for the mCommerce industry.

Security concerns: The average Indian consumer is still sceptical to carry out transactions involving money over the mobile phone due to security concerns. This is where the role of industry regulators such as the RBI is clear. The regulators need to ensure that the services offered over the mobile platform are offered through a secure and safe channel, and the risk of fraud or money laundering is limited. The industry participants need to develop applications that enable the transactions to be carried out in a secure manner; the consumers also need to be educated about the security levels embedded in the mCommerce services.

m-Payment experience:
(1) High burden on the user – A user who might want to do five transactions perfectly designed for the mobile medium – (a) paying their mobile bill, (b) Paying their Credit Card Bill, (c) Viewing their Bank Balance, (d) Checking Flight Schedules, and (e) Booking a movie ticket – would have to learn, register, interact with, or download five different m-payment solutions.
(2) SMS platform is costly in large volume and doesn’t always provide best performance. Every transaction adds incremental, uncapped cost for the user. (A purchase may require 3-5 SMS sent by the user).

In terms of utility per single transaction, current m-payment solutions are great. In terms of utility for multiple, transactions, they need to evolve.

Heterogeneous mobile platforms: Different mobile handsets are based on different mobile operating systems or platforms; this makes designing applications for mobile phones that much more difficult. The applications have to be designed to work on maximum handsets and need to be tested on various handsets for compatibility issues. Currently, most of the mobile applications are java-based as these can be used on a majority of the handsets that are GPRS capable (Most of the handsets that are GPRS capable are also java enabled irrespective of their operating system).

Low penetration of credit cards: India is primarily a cash economy and the low penetration of credit cards in our country acts as a barrier to the growth of mCommerce services.

Perceived and Practical Value: mCommerce in India is at an embryonic stage and only a small percentage of the mobile users are even aware of availability of such services. Among consumers, though mCommerce has a low perceived value, its practical value has the highest potential among all MVAS. Subjective norms, perceived usefulness, perceived ease of use and behavioral control are strong determinants of intention to adopt mobile commerce. Studies have revealed that subjective norms and perceived behavioral control impact perceived ease of use and intention to adopt mobile commerce.

Key growth drivers of mcommerce

Convenience factor: Mobile, as a personal device, is always with the customer. Paying utility bills, transferring money, buying movie tickets or doing similar other transactions through a mobile phone is much more convenient.

Reach factor: Mobile phones, due to the unprecedented growth over the past 5 years, have achieved penetrations levels that are much higher than other channels such as wireline phones, Internet, PCs, cable television, bank accounts, etc. Mobile networks have penetrated into rural areas, where you don't have bank branches or Internet connections. This has opened up the possibility of offering services to the rural consumers over their mobile phones.

Additional channel: With increasing competition, businesses all over the world are finding out new and innovative ways to reach their customers. After evolving from traditional ‘brick and mortar' stores to virtual online stores that can be accessed over the Internet, retail companies are now offering mobile based shopping facilities to their customers.

3G services: With 3G networks expected to be rolled out in India over the course of next few months or so, the user experience for the use of data services over mobile phones is expected to improve significantly.

Data capable handsets: If we look at the pricing and availability of mobile handsets that are GPRS-enabled, then around 2-3 years ago, these would cost Rs 8,000 -10,000. Today, even low-end handsets that cost around Rs 2,500 are GPRS capable. The availability of data capable handsets at lower prices has enabled a wider user base to access data services on their mobile phones.

The potential for mCommerce is undisputed and many businesses are focusing on the mobile to bridge the gap with their customers. However, the growth has been slow to take off and we are yet to see mass adoption of mCommerce services.

Mobile Commerce - An Indian fairytale

Globally, mobile phones have seen unabated growth over the past few years. In India, the number of mobile subscribers crossed the 300 million mark in August 2008 from just 14 million at the end of March 2003; and 8-9 million subscribers continue to be added every month. Over the next 5 years, it is expected that the mobile subscriber base to more than double and reach 638 million in March 2013.

Mobile phone users in India outnumber credit/debit cards and internet users 2.5 to one. The convergence of data and voice on the mobile platform has enabled the mobile phone to emerge as a convenient and secure channel for the conduct of commercial transactions. The m-commerce sector is poised for growth in the Indian market owing to its intrinsic link to the booming mobile telephony sector in the region. TRAI reported that the number of Indians who accessed the Internet or use high-end data services over the mobile increased by 8 million from Q1 ‘07 (38 million) to Q2 ‘07 (46 million). This compared to only 9.3 million total PC internet connections across India in 2007(Could not gather data for 2009). However, the use of the mobile channel for electronic transactions is still disproportionately lower than it should be, given the penetration numbers above.

The Current Mobile VAS (Value-Added Services) industry (mCommerce is a part of it) was Rs. 9760 crores by end June 2009 and is estimated to grow steadily at 70% to touch Rs.16520 crores by end June 2010. The current MVAS market size and contribution of each of the services (that make up the MVAS domain) is given below.

Currently, users of m-commerce perform a wide variety of transactions via mobile from paying of utility bills and purchase of movie tickets to shopping and holidays. While the uptake of mobile payments is still gathering pace, services that are more accessible and easier to use are finding favour.

With the RBI’s support for m-banking and the release of its guidelines on mobile banking transactions (Sept-Oct 2008), banks have sped up their roll out of m-payment products with banks such as Standard Chartered, SBI and IDBI Bank launching their services in the early part of the year. A research done by The “Nielsen Company” shows 64 percent of m-payment users surveyed had registered for an m-commerce service within the prior six months. This points to a spike in consumer confidence in m-commerce since the RBI issued its guidelines in Sept-Oct 2008.


VAS/Internet Usage over Mobile

1. Searching for information and checking email are the main reasons why Indians use Internet on their mobile phones.

2. Google and Yahoo continue their dominance of the Indian mobile screen.

VAS/mCommerce

mCommerce is at a very nascent stage in India and the bouquet of services is yet to evolve. Currently, services such as purchase of movie tickets, information on bank account, transfer of funds, bill payments and merchant payments are the key offerings through the mobile platform. The financial services sector has been one of the early adopters of mCommerce due to the standardised and undifferentiated nature of products. Most of the large banks in India have started using the mobile phone as a channel to offer services to their customers. Retail is another sector that offers mCommerce services by allowing the customers to place orders and purchase products on-the-move.
Recharging pre-paid card or paying monthly phone bill is the most popular m-commerce activity undertaken by urban Indians.


Internet (on mobile) and mCommerce usage clearly shows that very few Indians have purchased retail items on the internet.

How to bridge the chasm between online and offline shopping experience?

In a country like India, online experiences are still looked up as complex and uncomfortable. This is evident when one sees that online buying in India is popular only among the select urban youth (though rural/non metro consumers are coming into the scene fast). There are evolving customer expectations, fears and inhibitions. Amidst such a scenario, the seller would have to devise strategies that are based on sound consumer behavioral research. By and large, studies (including the 2 mentioned in this report) find that convenience, online store environment, shopping enjoyment, customer service, and trust are vital in influencing consumer behavior towards willingness to buy and patronage of online retail stores. It is observed that customer service and trust levels (though it is changing now) are low and there is an urgent need to address these concerns. Some of the suggestions this report proposes for the fledgling e-tailing industry in India are as follows:

1. E-tailing in India can be a success if the eTailers change their business models and understand the “Determinants of Shopper Behavior in E-tailing”- E-tailers should create economic value for the Indian customers rather than a curiosity value.

2. Lack of trust and privacy concerns prevent a lot of consumers from making online purchases. For the metro users who are more educated and knowledgeable, data insecurity is not that much of a concern. However, it is a major concern for the not so educated non-metro/semi rural users. Therefore it is the need of the hour for e-tailers to adopt security measures and inculcate a sense of trust among online shoppers that data provided during online transactions will not be misused.

3. Adequate attention needs to be paid towards customer service, distribution, and logistics and these should be integrated seamlessly not only with the company’s existing website, but also with the company’s entire operations, online and offline. Importance should be paid on “Post-transaction” elements such as delivery schedules, warranty services, return and exchange policies, post-sales services and related technical support. Other service features such as free return shipping, alerting customers of their order status through email and recommending other products that they may genuinely be interested in (cross-selling and up-selling) are the means to customers’ delight and loyalty.

4. Online retail stores do not have standardized designs in comparison to the physical retail stores and product catalogues. Therefore, different user behaviors (navigation schemes) need to be understood by eTailers in order to avoid navigation hiccups.

5. Since shopping is still a ‘touch-feel-hear experience’, e-tailers need to create such environment as it is in a physical store by creating novel web designs and portals, sophisticated web atmospherics, e-mail updates, and live interactions over the Internet. Website design elements and aesthetics, as well as customization have an impact on consumer psychographics and consumer interest in buying online and the e-retailer needs to pay attention to this.

Attitudes and Preferences towards online shopping - non metro towns

A recent study (2008) was conducted in the state of Punjab in order to understand the attitudes and preferences towards e-shopping for Indians located in the non-metro towns and cities. This study (Factor Analysis-Eigen Value approach) used random sampling technique with a sample size of 900 respondents comprising businessmen, academicians and students. The following were the key findings.

1. Product Information and Reliability emerged as the most important factor of the research. The major elements which constitute this factor include: awareness of the media, whether the web provides more information than other media, and the detailed product information. The results depict that there is a general preference of people for using internet as compared to the traditional media. The quantity, relevance and authenticity of information provided by the retailer are important factors that affect the building of positive attitudes in consumers, to buy online. Consumer purchases are often based on the web appearances and information of the product or service offering. The marketer needs to customize the information about products and services to meet the customer’s needs and wants.

2. Audience attitude towards e-shopping - Website design and nature: Few factors such as responsiveness of the websites, Positive outcomes, Influencing power, data security and good information provider emerged to be of great importance to the consumers located in the non metro cities and towns.

3. Attitude towards E-shopping is influenced by many factors but two factors, namely product information and reliability, and website design and nature were considered more important for the non-metro consumers.

This analysis points out that, in the non metro towns and also in general there is a growing awareness of getting more information through websites. There is an increasing trend of using Internet for booking tickets, buying books and music but the scene has not transformed dramatically in case of India. A slow transition is visible in the younger age group (21-35 years) where the responsiveness and interactive web sites provide them more opportunities for customized products.

Though a majority of Internet users look for information on various product categories online, a relatively smaller portion of them actually buy online. In this study, only 11.87% of the respondents prefer to use the web for shopping purpose. However, a slight change in attitude is visible as the respondents have given higher rank to websites providing product information and the next rank has been assigned to website design and nature. E-marketers have to target the young age group and convert them into potential buyers. Interactive responsive websites can play an important role here. Interactive tools lead to easier access for the consumers, facilitate two-way communication and thus have favorable effects on the overall consumer purchase decisions.