Why E-Commerce in India still has a long way to go?

Over the past few years, a lot of angel investors have shown confidence in India’s e-commerce industry. There have been huge investments on the hope that one day the volumes would grow and companies would break even. But none has seemed to really crack the code, leave aside becoming profitable. Off late, I have experienced the e-commerce industry both as a customer and an employee. Having seen both sides of the coin, my analysis is that e-commerce has a long way to go in a country like India majorly because of the following issues:

1)    Missing touch and feel factor – As a customer, I still wish to try a dress before buying. I still wish to test a pair of sunglasses whether they suit me. There is not much value add to me as a customer if I buy online or I go to the physical shop. Except, that it saves some time. But then as a girl, do I really want to save that time? Do I not love shopping anyway? To some extent, the portal LensKart has picked up a lot due to the fact that its technology helps a user virtually try the products before making a buying decision.

2)    Lack of complete Information – If I buy a simple thing like a book, I would not mind if some information is missing on the portal. But if I am buying something complex, are you making me comfortable with the information provided? I saw a website lately, which was selling cameras without having a proper review section. Even if he gives me the same at 10% lesser a cost, will I really buy? Into the travel business for the last four months, my endeavor is to provide all the information to my valuable customers in an easier format, so they could make their buying decision with a lot of comfort.

3)    Delivery Issues – I ordered Rakhi online for my brother so it could reach him on time. I overpaid by almost three times for a pack of chocolates just so it could reach him on time. The portal from where I bought it is none other than Infibeam; which has been advertising heavily on Rakhi. It has been four days post Rakhi. But the same has not reached him as yet. A rakhi sent by Indian Post though did manage to reach on time. Infibeam does not care to reply to my email. A call to their call center simply gives me a third party tracking number. Did I buy from the third party logistic company or did I trust the brand Infibeam is? Does Infibeam care? Does it think it can grow from here?

4)    Defected Products (Lack of ownership) – My mother is not at all an internet savvy person. But she took a risk. She ordered a suit from Myntra. Guess what, the suit piece was smaller than committed on their website. Myntra did replace the suit but I had to convince them really hard that I should not be charged twice for delivery. While companies like Myntra are spending huge on marketing, none is working too hard on improving the customer experience. Unfortunately, the people in the fulfillment and the call centers are only interested in meeting their sales targets but when it comes to customer complaints, they refuse to take ownership.

5)    Where is the value add – Similar experience with a phone bought from Yebhi. Ordered a touch Nokia phone from their website, but the touch was faulty. Yebhi asked me to visit Nokia service center and that’s about it. What is then Yebhi’s value add? Why should I have trusted them?

6)    Screwed Supply Chains – My book “My Beloved’s MBA Plans” was released this month. It sold massively on Infibeam. So, when it came on Flipkart, I was very excited. But people told me Flipkart is promising a very late delivery. I still asked them to hang on and trust the brand. But suddenly after fifteen days, they now tell that they forgot to place order with suppliers! Is that really the same Flipkart we all trust? Can it scale up with a screwer supply chain, which should have formed the backbone of its operations

7)    Huge people costs – On the other hand, these companies are juggling hard with their cost structures. Servicing is an expense. Unfortunately, margins are not that great. Automation is missing. How then can profits be made?

8)    Phenomenal Spending on Marketing  – We all saw how many e-commerce portals spent so heavily during IPL. If my competitor does it, so will I. But do I really need that? Can I grow by customer service and word of mouth?

9)    Gaps in Strategy and Strategy Executions – Ok, so your CEO has big plans for the company. But how does the organization ensure the same are trickle down to the bottom of the company? Gaps between strategy and strategy execution seem to be widening. Each level should pass on business sense to the next, so the entire value chain works in harmony. Sales compete with product and vice versa. But aren’t the two sides of the same coin? Strategy execution is all about that synchronization.

There are many such factors where companies are not focusing on the right areas but seem to be falling into a trap of fancy marketing and not really caring about fortifying the brand value. While setting up a website is the easiest part, setting up the trust factor is the most difficult. The backend infrastructure is the biggest hindrance as well as the biggest support. The one who nails that will win the race!

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Author of "My Beloved's MBA Plans", "Because Life Is A Gift" & "Corporate Avatars"

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