I had interesting conversations with two readers of my blog in the last couple of weeks. One of them was doing a report on the feasibility of online retail in India. She was working in a small group of I think 4 people, who needed to submit an optimistic report, i.e. look at the brighter side of things so far as online retailing goes.
She sent me an e-mail, and after the initial contact was established she sent me a few questions that she wanted answered. My e-mail response was followed by a telephonic conversation in which we discussed the finer details of Easy Dukaan operations and the challenges faced by us vis-a-vis brick and mortar stores.
There was a sense of deja vu when I met another reader over coffee, and heard the similar questions from him. Deepak had different reasons for meeting me since he is interested in entrepreneurship, and plans to start his own business and e-commerce is one of the areas he is exploring.
We had a fruitful 2.5 hour meeting in which we discussed ideas, shared our experiences with each other and explored opportunities of working together in the future. Deepak has a unique business idea (not in the area of e-commerce) and while I will not discuss it here, suffice it to say that I found his idea very interesting and kinda unique.
Saturday, February 27, 2010
Saturday, December 5, 2009
Easydukaan in Media
Easydukaan is making inroads in the Pune retail sector slowly but steadily. Our work was first noticed and acknowledged by Intelligent Pune here. Last week we were noticed by DNA. DNA, recognizing the potential of Easydukaan provided front page coverage to us. Needless to say, we are on cloud nine, elated, ecstatic (add your favorite adjective here) ...
Once again, a big thank you to all of you - our beloved customers for reposing faith in us and for making this happen. This success belongs as much to us, as it does to you. We will continue serving you to the best of our ability.
Once again, a big thank you to all of you - our beloved customers for reposing faith in us and for making this happen. This success belongs as much to us, as it does to you. We will continue serving you to the best of our ability.
Friday, October 16, 2009
Happy Diwali
The Easydukaan Team wishes all her customers, patrons and well wishers a Happy and prosperous Diwali. The past few weeks have been busy, and since we are (still) a small, fledgling business there's a lot to do. That accounts for erratic intervals in posting on this blog.
Business has seen an upturn since we were featured on Intelligent Pune and we are seeing increasing interest from different quarters.
Your favorite online retail store has expanded her portfolio of products stored, and now we also accept Sodexho vouchers as modes of payment. Logon to Easydukaan if you haven't already done so. We will be back with more. Till then happy shopping and Happy Diwali.
Business has seen an upturn since we were featured on Intelligent Pune and we are seeing increasing interest from different quarters.
Your favorite online retail store has expanded her portfolio of products stored, and now we also accept Sodexho vouchers as modes of payment. Logon to Easydukaan if you haven't already done so. We will be back with more. Till then happy shopping and Happy Diwali.
Thursday, September 17, 2009
EasyDukaan in media
This will be a short post, its only purpose being to sing hosannas to us :). EasyDukaan got its first media coverage today on Intelligent Pune.
If you live in Pune, and are interested in serious journalism (as opposed to what passes for journalism these days) please make it point to subscribe to Intelligent Pune. They are a Pune based weekly tabloid who deal with citizens' issues, civic issues, environmental issues and other matters related to Puneites. Getting covered by Intelligent Pune is a major accomplishment for us!
If you live in Pune, and are interested in serious journalism (as opposed to what passes for journalism these days) please make it point to subscribe to Intelligent Pune. They are a Pune based weekly tabloid who deal with citizens' issues, civic issues, environmental issues and other matters related to Puneites. Getting covered by Intelligent Pune is a major accomplishment for us!
Tuesday, September 15, 2009
Challenges to the online grocery model
One of the most interesting sectors of the retail market today is the grocery segment, and even in the grocery segment it is online grocery or e-grocers which is most happening. Growing interest by consumers to click and point their way through nearly all aspects of daily life has fuelled the Internet economy and has impelled the development of online services and selling of products online even in areas that were once the sole preserve of traditional businesses, such as grocery stores and pharmacies.
Some of the reasons why increasing numbers of consumers are likely to turn to online grocery are the same as those driving other Internet purchases - better prices, larger selection, convenience, and time savings. Home delivery of items purchased online is appealing to those for whom going out to shop is difficult for various reasons, such as paucity of time, the need to care for young children, the lack of adequate or convenient transportation, and/or a busy lifestyle. Buying groceries and other products online unchains consumers from physically driving to and shopping in traditional stores, particularly when parking is such a pain. Besides storing weekly orders on the website offers predictability and makes repeat orders simpler.
However, despite its obvious advantages online grocery has been slow in coming to India. There have been sporadic attempts, but none very successful. Only part of the reason has been unwillingness of urban Indians to adopt e-grocery. Lack of viable options too plays a big part.
From consumers' point of view, having to plan and think about the delivery schedule is a major deterrence for customers wanting to try online grocery shopping. Most consumers are used to going to the grocery store on the spur-of-the-moment, and often combine grocery shopping with other activities including watching a movie or eating out. Sometimes grocery shopping may also be combined with apparel or electronics shopping, and may serve as a family outing.
Other factors negatively influencing consumers' decisions to purchase groceries or other goods online include delivery charges, credit card security, the need or want for immediate delivery of products, and the social aspects of the shopping experience. Considering the high proportion of family income spent on grocery shopping, families tend to accept a little inconvenience for lower costs. If a supermarket offer grocery at substantially lower rates, consumers would tend to flock to that supermarket disregarding the cost of transportation, parking and the time spent.
The threat of credit card theft remains a real issue in the minds of many consumers, although incidents of fraudulent credit card use on e-grocers' websites are few and far between. Some consumers are also concerned about the freshness of the products they buy from e-grocers, particularly if it's fruits or vegetables or dairy items they are purchasing. Some may simply want to squeeze and smell the products before purchasing - the need to touch and feel products remains a significant barrier for the online sale of groceries. This need, though, can be largely obviated by selling packaged stuff with clear quality indicators, list of ingredients and expiry dates.
Although many customers do not think that ordering groceries online is something they would be interested in, once some try it, they become captivated by the convenience. While low penetrativity of Internet is an impediment to large scale adoption of e-grocery in India, urban India has been able to reach a critical mass in terms of connectivity. While rural India is driving the growth in every other segment including two wheelers, mobile phones and white goods, online grocery is a segment where most of the growth for the foreseeable future will be driven by urban India. A lot depends on how e-grocers plan to alleviate the problems highlighted above. In my next post I will touch upon some possible solutions, along with the solutions adopted by EasyDukaan.
Some of the reasons why increasing numbers of consumers are likely to turn to online grocery are the same as those driving other Internet purchases - better prices, larger selection, convenience, and time savings. Home delivery of items purchased online is appealing to those for whom going out to shop is difficult for various reasons, such as paucity of time, the need to care for young children, the lack of adequate or convenient transportation, and/or a busy lifestyle. Buying groceries and other products online unchains consumers from physically driving to and shopping in traditional stores, particularly when parking is such a pain. Besides storing weekly orders on the website offers predictability and makes repeat orders simpler.
However, despite its obvious advantages online grocery has been slow in coming to India. There have been sporadic attempts, but none very successful. Only part of the reason has been unwillingness of urban Indians to adopt e-grocery. Lack of viable options too plays a big part.
From consumers' point of view, having to plan and think about the delivery schedule is a major deterrence for customers wanting to try online grocery shopping. Most consumers are used to going to the grocery store on the spur-of-the-moment, and often combine grocery shopping with other activities including watching a movie or eating out. Sometimes grocery shopping may also be combined with apparel or electronics shopping, and may serve as a family outing.
Other factors negatively influencing consumers' decisions to purchase groceries or other goods online include delivery charges, credit card security, the need or want for immediate delivery of products, and the social aspects of the shopping experience. Considering the high proportion of family income spent on grocery shopping, families tend to accept a little inconvenience for lower costs. If a supermarket offer grocery at substantially lower rates, consumers would tend to flock to that supermarket disregarding the cost of transportation, parking and the time spent.
The threat of credit card theft remains a real issue in the minds of many consumers, although incidents of fraudulent credit card use on e-grocers' websites are few and far between. Some consumers are also concerned about the freshness of the products they buy from e-grocers, particularly if it's fruits or vegetables or dairy items they are purchasing. Some may simply want to squeeze and smell the products before purchasing - the need to touch and feel products remains a significant barrier for the online sale of groceries. This need, though, can be largely obviated by selling packaged stuff with clear quality indicators, list of ingredients and expiry dates.
Although many customers do not think that ordering groceries online is something they would be interested in, once some try it, they become captivated by the convenience. While low penetrativity of Internet is an impediment to large scale adoption of e-grocery in India, urban India has been able to reach a critical mass in terms of connectivity. While rural India is driving the growth in every other segment including two wheelers, mobile phones and white goods, online grocery is a segment where most of the growth for the foreseeable future will be driven by urban India. A lot depends on how e-grocers plan to alleviate the problems highlighted above. In my next post I will touch upon some possible solutions, along with the solutions adopted by EasyDukaan.
Thursday, September 10, 2009
Net Retailing - Current Indian scene
In my past two posts, I have tried to touch upon the history and the current status of retailing in India, and the issues faced by the industry as a whole. In this post I want to talk about online retailing. Considering India's status as the premier destination of IT outsourcing, and the large count of young, net savvy population of urban Indians online retailing should have done very well in India. Unfortunately reverse seems to be the case. A popular concept in the West, e-commerce has been slow in picking up in India.
While portals like rediff and indiatimes have made some headway, in getting the Indian consumer to shop online, the list of items stocked still range more towards consumer durables, including items like electronics and white goods, books and CDs. For Indians wanting to buy groceries or Fast Moving Consumer Goods online there is little choice. There is no Tesco or Sainsbury for Indian consumers.
The reason is not far to seek. At present online shoppers in India usually experience poor quality of goods and services, lack of trustworthiness and inexplicable delays. Market research says that Indians will shop online when they have to. However, quality of online retailing in India leaves much to be desired. The writer himself had an unpleasant experience recently while shopping with Indiatimes. I had ordered a set of children's books for my nephew as a birthday gift one week in advance. I had specified that the gift should be delivered on his birthday. 8 days after ordering the gift, and a day past his birthday, I got an email from Indiatimes stating that my order has been cancelled. yes you got that right. C-A-N-C-E-L-L-E-D.
This happened 4 days ago. The money was supposed to be mailed to me in the form of a gift voucher (which means I will be forced to shop with Indiatimes again) within two days. No points for guessing that I still haven't received any gift voucher. In more mature economies like the US such portals would have been laughed (or sued) out of business. Here they continue advertising themselves as India's premier online shopping portal.
Last year I had an even worse experience while shopping from rediff. Again it was my nephew's birthday and I had purchased a toy for him. The toy was delivered late, and in a damaged condition. When attempting to complain, I realized that they had no customer care centre. I had to correspond using email. Someone was sent to my brother's place to collect the defective toy. It was replaced after a month.
What is the probability that I will again shop online from any of these 'premier' portals. Very close to zero I believe! As I had stated before, India's online shopping portals suffer from a credibility issue. They provide poor service, lack accountability and are generally unreliable. What does it say about the state of e-commerce in India if I tell you that irctc still contributes 1/3rd of the total volume of e-commerce in India? Indeed something to worry about.
I will talk more about the state of e-commerce and online retailing in India in my subsequent posts.
Thursday, September 3, 2009
Indian retail Industry – The Challenges
Whenever an industry or an industrial segment grows at a particularly fast pace, and outperforms the rest of the economy, it is inevitable that that industrial sector will come up against speed barriers. Some of these barriers can be removed by the industry, with major players working in tandem against factors which inhibit growth and impact all of them identically. Some barriers however can only be removed by government by bringing in legislative changes, and streamlining certain procedures. The challenges facing the Indian organized retail sector are multifarious, and some of them can act as inhibitors to future growth.
To begin with, if we look at the nature of change which has engulfed the Indian retail scene, we will realize the following. For one, the behavioral pattern of the urban Indian consumer has undergone a big change. This has happened because the Indian consumer is earning more now, is more influenced by western patterns of consumption, there are more no of working women and they are in a better position to influence and drive family consumption patterns, desire along with corresponding availability of luxury items and better quality goods. The Indian consumer now wants to eat, shop, and get entertained under the same roof. All these have led the Indian organized retail sector to give more in order to satisfy the Indian customer.
However, with expanding opportunities, come challenges! One of the biggest challenges facing the Indian organized retail sector is the lack of retail space. Sky rocketing real estate prices due to increase in demand from the Indian organized retail sector, it is posing a challenge to its growth. With Indian retailers having to shell out more for retail space it is affecting their overall profitability. The situation has remedied to some extent due to the recent recession, however that is not to say that the same situation will not repeat itself.
Another pain area is unavailability of trained manpower for the organized retail sector. Organized retail has specific manpower needs which cannot be easily met by general stream graduates. Retail outlets that are forced to hire such graduates often need to train them extensively. While training itself is expensive, there is the ever present threat of poaching, wherein any new entrant to the retail business simply hires in staff from an incumbent, by offering pay hikes. While this results in wasted training costs borne by the original organization, it also inflates the cost of wages.
Raising enough capital for expansion is the third problem faced by Indian retail giants. The Indian government has allowed 51% foreign direct investment (FDI) in the India retail sector for single brand shops only. This has made the entry of global retail giants to organized retail sector in India difficult. Consequently, the global retail giants like Tesco, Wal-Mart, etc can enter the organized retail sector in India only indirectly through franchisee agreements or in partnerships with an existing Indian firm.
However, with expanding opportunities, come challenges! One of the biggest challenges facing the Indian organized retail sector is the lack of retail space. Sky rocketing real estate prices due to increase in demand from the Indian organized retail sector, it is posing a challenge to its growth. With Indian retailers having to shell out more for retail space it is affecting their overall profitability. The situation has remedied to some extent due to the recent recession, however that is not to say that the same situation will not repeat itself.
Another pain area is unavailability of trained manpower for the organized retail sector. Organized retail has specific manpower needs which cannot be easily met by general stream graduates. Retail outlets that are forced to hire such graduates often need to train them extensively. While training itself is expensive, there is the ever present threat of poaching, wherein any new entrant to the retail business simply hires in staff from an incumbent, by offering pay hikes. While this results in wasted training costs borne by the original organization, it also inflates the cost of wages.
Raising enough capital for expansion is the third problem faced by Indian retail giants. The Indian government has allowed 51% foreign direct investment (FDI) in the India retail sector for single brand shops only. This has made the entry of global retail giants to organized retail sector in India difficult. Consequently, the global retail giants like Tesco, Wal-Mart, etc can enter the organized retail sector in India only indirectly through franchisee agreements or in partnerships with an existing Indian firm.
To top it all there is the paradoxical problem of excessive competition. Many Indian companies like Reliance Industries, Future Group, and Bharti Telecom are venturing into the Indian organized retail sector. This has resulted in excess capacity and a glut in the market. To attract new customers and to retain existing customers, these retail giants need to constantly entice their customers with freebies and discount offers. At any point of point some retail store or the other offers exorbitant discounts. Since these discounts are offered for a sizeable period of the year, customers don’t remain loyal to any one store, but perform discount-shopping.
This is a vicious cycle, akin to the telecom war of a few years ago where all major players were offering rock bottom prices for cellular connections and call rates. Or the Airlines war of attrition that has taken a heavy toll on the profitability of the aviation industry as a whole. As I stated before, some of the problems will need to be tackled by the industry, and in some other areas the government will have to extend a helping hand. But despite these teething troubles, or because of them, Indian Retail Industry at the moment is an exciting place to be in.
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