Tuesday, November 3, 2015

Is the Ecommerce War more of a mind game?

Is E- commerce war a Mind Game ? The top of the mind e-commerce names that comes to the mind today are the triad “Flipkart”, “Amazon” and “Snapdeal”. What was looked at by suspecting eye a few years ago by all of us is here to stay. Customers then were very much wary about transacting online as they feared their personal data would get stolen, also the most important factor for us was the touch and feel of the product prior to initiating any purchase. Cut to today the customers are now more spoilt for choice as they have now matured and keep fishing around for the right offer. Indian shoppers, have got used to deep discounts throughout the year for shopping online. None of the customers are loyal to any brand. A growing section of customers have settled for buying products online which also has given rise to birth of lot of logistic companies (ECOM, Quickdel Logistics,Delhivery, GoJavas, DotZot etc.). The industry got a Fillip when Flipkart introduced cash on delivery in the year 2010. According to Gurgaon-based consultancy Technopak, the $2.3-billion (Rs 13,800 crore) Indian e-tailing sector will touch $32 billion (Rs 1.92 lakh crore) by 2020. Infact the e-commerce logistics will be a 2 –billion industry by 2019. E-commerce companies are gunning down the neck of their rivals by calculating their sales based on Gross Merchandise Value. What is Gross Merchandise Value (GMV) GMV or gross merchandise value means sale price charged to the customer multiplied by the number of items sold. For example, if a company sells 10 books at Rs 100, the GMV is Rs 1,000. This is also considered as "gross revenue". E-commerce companies today strives on reliable services, timely delivery, and quality packaging and they are continuously finding ways and means to increase their customer acquisition and retention. Online companies have realized their target customers are beyond the realm of eight cities and hence are concentrating their growth trajectory on tier-II & tier-III cities. Companies like Myntra have adopted App only sale and a few believing 70% of their business happens via app hence concentrating on the upper strata of the society targeting only the top cities of the country. Companies are also trying to find ways and means for promoting their wares right from micro-targetting an online audience, creating content to build stickiness, tailor the browsing experience to target segments, integrating it across all the channels. Recently Flipkart’s owners in Bengaluru worked with the logistics team and visited a few houses as a part of the delivery team. This not only got them good PR mileage but it also helped them to testify their own logistics and delivery support during the midst of a big sale. Amazon, Flipkart and Snapdeal are all banking on a series of sharp demographic and economic shifts to drive consumers towards their marketplaces thus opening new vistas for growth of online payment, the recent example being mushrooming of lot of Wallet companies It’s particularly important for Amazon to build a large business in India, which is considered to be the last big unconquered market in the world, after it lost out in China to Alibaba. Amazon, Flipkart & Snapdeal control nearly 80% of the e-commerce market even as competition is set to increase with Reliance Industries entering the segment by March 2016 It is also foreseen of the three majors only two active players will compete with each other for the winner’s slot. Whether this turns out to be a bubble or the beginning stages of a shopping revolution is what needs to be seen but as on today the Customers stand to get benefitted. http://www.businesstoday.in/magazine/features/ecommerce-logistics-startups-are-growing-rapidly-delhivery/story/214446.html