Facebook faces up to a future of e-commerce
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After a botched IPO and under intense scrutiny, Facebook needs a win, and e-commerce may well give the company that fillip
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It’s been a tricky few months for Facebook, very
tricky indeed. Burned investors, a share price that has halved since its
IPO and an over-priced acquisition still to make Facebook a mobile
player, the future looks a lot bleaker than it did earlier this year.
At the end of 2011, the company had 845 million active users, and while advertising was responsible for 85% of its revenues, such a huge installed base meant that it would only took one leap of innovation for the company to carry on growing. This quest for innovation hasn’t been easy. There is nothing more distracting for a company than when it is raising money or going to IPO. Creativity is pushed aside in favour of due diligence and scrutiny; it takes time to get back on track. Whatever has happened since the Facebook share price tumbled, one thing is very clear. Facebook went to IPO to raise money and they were successful; recent announcement of Subscriptions and migrating Facebook Credits to local currency pricing proves that the company is still thinking. The one thing that Facebook has always got right is how it has integrated itself into the web and it may be one of the internet’s staples, e-commerce, that may be the way the company evolves. Facebook’s 900 million users contrasts very favourably to the 160 million claimed by Amazon and Ebay’s 100 million. Across in Silicon Valley seasoned investors are putting their money into e-commerce start-ups that are producing shopping apps for Facebook. In the UK other more experienced companies are also optimistic about the opportunities for Facebook and e-commerce. Venda is a privately held and profitable UK company that was founded more than ten years as a cloud-based SaaS commerce pioneer and now increasingly works through Facebook and across mobile. The company’s clients include global retailers such as Tesco, Superdrug, JVC, Urban Outfitters, Condé Nast and Jimmy Choo as well as institutions such as The Metropolitan Museum of Art. Its CEO, Eric Abensur believes that while consumers don’t view Facebook as a source of information about products, it is the social conversation that interests his customers. “With the draw of such large audiences and the wealth of opinion exchanged about products, Facebook presents a highly tempting channel for retailers. Therefore, we believe Facebook can become a formidable recommendation engine driving consumers to buy products. We do not believe that operating just a Facebook store will deliver growth or address the needs of the consumer. We’ve begun to work with a number of brands on our platform to explore the possibilities of social commerce and how to best approach selling via a channel where people haven’t arrived with the explicit intention to buy,” he said. According to the Gartner Group, by 2015, companies will generate 50% of web sales via their social presence and mobile applications. A recent report from eConsultancy said 90% of consumers trust recommendations from people they know, and Internet Retailer recently announced that 67% of consumers spend more online after getting advice from their online community of friends... all good news for Facebook. PageHub is a Brighton-based start-up and one of the few global companies to be awarded Preferred Marketing Developer for Apps status by Facebook. Its cloud platform powers Facebook Apps for leading brands and manages consequent campaigns. Its founder and CEO James Devonport Wood and believes Facebook will challenge companies such as Amazon by the ability to use credit cards on their Facebook accounts. “Facebook recently announced the closure of their Credits product, which will be replaced with a new Subscription service similar to those available from Apple and Amazon. This new service allows users to add a credit card to their account and pay for transactions in their local currency using Facebook. |
Facebook faces up to a future of e-commerce After a botched IPO and under intense scrutiny, Facebook needs a win, and e-commerce may well give the company that fillip
Saris, an online hit! Several e-commerce sites have seen an increase in the number of shoppers purchasing this garment
Saris, an online hit!
Several e-commerce sites have seen an increase in the number of shoppers purchasing this garment
Clearly, the shopping patterns of the new age consumers are chaging d how. They are choosing to shop from the comfort of their homes d avoiding the hassle of dealing with salesmen. However, in a surprising revelation, the online markets have suddenly warmed up to the humble sari — debunking the regular ritual of investing hours, scanning several stores, touching the fabric d even getting a trial drape!
Experts reveal that women from not just metros, but also from smaller cities are shopping for saris online. Due to this, online portals are now collaborating with major brands d offering a wide array of designs — which may not be available in all the stores. Moreover, with the growing demand, retailers from small cities are engaging in partnerships with fashion websites which makes their business boundless.
Paritosh Bindra, Head Product Sourcing, snapdeal.com reveals that the site houses over 4,000 saris. “You c search for a particular brand or style of sari,” says Paritosh, adding, “The online buyer is mostly between the age bracket of 18 d 30, d has no inhibitions in experimenting in terms of both design d price range.”
While Surat saris with prints/embroideries, lehengas in georgette d chiffon amount to 60 per cent of the sales, Barasi, Bandhani, Ktha, Lucknowi, Block print, Maheshwari, Ikat, d Bhagalpuri silk saris are also a hit.
Krishna Motukuri, Maging Director of Tradus.com, feels that it is the convenience of browsing through hundreds of saris that has drawn most women to online stores. “Besides, unlike shopping for dresses d shoes, one need not be apprehensive about the perfect fit as one sari fits all,” he adds. Even online portal Fashiondyou.com has witnessed increase in sari sales.
Designer AD Singh, who also has online portal besides his studio, points out that he mages extra 15 per cent sale due to online orders. “Earlier we had only International buyers shopping online, but of late, Indian consumers too are going for this option. It’s easy for those who connect make appointment to the store. However one needs to be wary of the the occasional difficult consumer,” adds AD.
Boutique M&A in e-commerce: one more don
Consolidation in the e-commerce segment seems to be gathering steam,
with hushbabies.com, a baby care products site, acquiring
mangostreet.com — a kids wear retailer — for an undisclosed sum.
“E-commerce has picked up significantly. While our core business comes from key Indian Cities, big growth is being seen in smaller towns and cities,” said Sridhar Seshadri, CEO, Hushbabies.com.
Hushbabies’ targets parents and parents-to-be, and offers products ranging from baby care items to toys and clothes. At present, it has 15,000 stock keeping units (SKUs) on sale, up from 3,000 SKUs six months ago.
Post-acquisition, the company will work to develop private labels and scale up its product portfolio offering.
MangoStreet was set up in 2008 by Mohit Yadav and Rahul Yadav. They have now joined Hushbabies as business leaders and will report to Seshadri.
“E-commerce has picked up significantly. While our core business comes from key Indian Cities, big growth is being seen in smaller towns and cities,” said Sridhar Seshadri, CEO, Hushbabies.com.
Hushbabies’ targets parents and parents-to-be, and offers products ranging from baby care items to toys and clothes. At present, it has 15,000 stock keeping units (SKUs) on sale, up from 3,000 SKUs six months ago.
Post-acquisition, the company will work to develop private labels and scale up its product portfolio offering.
MangoStreet was set up in 2008 by Mohit Yadav and Rahul Yadav. They have now joined Hushbabies as business leaders and will report to Seshadri.
Social media driving e-commerce
Social media users hooked onto networking sites such as Facebook and
Twitter are set to give a big boost to the already burgeoning domestic
e-commerce market that touched the Rs. 50,000 crore-mark last year.
India, with an online population of 150 million, is the third largest in terms of Internet users after China and the US, a study by Internet
& Mobile Association of India has found. Of this, 50 million are on
Facebook and 13 million on Twitter, taking the size of social media
universe to 63 million.
This also makes the country the second-largest Facebook market after the US, while the sixth-largest for Twitter, said Amrish Rau, general manager, ICICI Merchant Services and First Data. Most of these social media members are also actively taking up e-commerce transactions, he added.
“Social e-commerce is the next step in evolution, combining the comfort and ease of use of social media and e-tailing,” said Rau.
Social commerce continues to gain popularity around the globe, especially in the US, with the rising popularity of e-gifting, under which users send tangible gifts to their loved ones from retailers through Facebook and email, he added.
Explaining the plus points of e-gifting, Rau said since social networking sites are accessible on cellphones, it is easy for both individuals as well as organisations to expand their e-commerce strategy into the social commerce realm.
Moreover, social e-commerce improves online shopping by offering product suggestions from people personally known by users. For example, when a user shops for a cellphone or any other electronic gadget on a traditional e-commerce site like eBay, Flipkart and others, the user gets to see ratings and reviews by previous buyers.
For retailers, it enables them to engage with their buyers on a personal level, thereby obtaining perception and views in an easier manner.
This also makes the country the second-largest Facebook market after the US, while the sixth-largest for Twitter, said Amrish Rau, general manager, ICICI Merchant Services and First Data. Most of these social media members are also actively taking up e-commerce transactions, he added.
“Social e-commerce is the next step in evolution, combining the comfort and ease of use of social media and e-tailing,” said Rau.
Social commerce continues to gain popularity around the globe, especially in the US, with the rising popularity of e-gifting, under which users send tangible gifts to their loved ones from retailers through Facebook and email, he added.
Explaining the plus points of e-gifting, Rau said since social networking sites are accessible on cellphones, it is easy for both individuals as well as organisations to expand their e-commerce strategy into the social commerce realm.
Moreover, social e-commerce improves online shopping by offering product suggestions from people personally known by users. For example, when a user shops for a cellphone or any other electronic gadget on a traditional e-commerce site like eBay, Flipkart and others, the user gets to see ratings and reviews by previous buyers.
For retailers, it enables them to engage with their buyers on a personal level, thereby obtaining perception and views in an easier manner.
Pop goes fashion This Diwali, a new way to shop as entrepreneurs hit your city with an eclectic mix
Noorie Sadarangani sprung a surprise on Mumbai with her “peepbox”
style design-art studio Obataimu in January 2011. Its launch began with a
viral video with clues and secret passwords leading shoppers to the
location. Located in a dilapidated building in Kala Ghoda, Mumbai,
Sadarangani’s Gentlemen’s Only Peepbox concept store—selling old-school
Polaroid cameras, antique barber chairs, boxers and pyjamas—may have
lasted only six months, till the structure it was housed in was pulled
down, but it managed to get the city’s fashion circles talking. While
Obataimu (Japanese for overtime) in its current avatar is a tiny 200 sq.
ft store tucked away next to Kala Ghoda Café, Sadarangani says her idea
for setting up the peepbox was very clear: “to test the market and
create interest in the brand in an unconventional way”.
This
transient and gimmicky quality of the pop-up shop format has captured
the imagination of the retail world. While internationally brands like
Topshop, Target, JC Penney and Tommy Hilfiger are increasingly relying
on flash retail strategies, luxury brands are also looking at them as an
opportunity to create a buzz around their labels. Besides Gucci,
Chanel, Hermes and Prada setting up temporary stores in the last year,
Dior Homme opened the doors to a pop-up boutique in SoHo, New York City,
in April and Chanel unveiled a beauty pop-up store in Covent Garden,
London, in July. Louis Vuitton is the latest in line to launch its
collaboration with Japanese artist Yayoi Kusama with seven pop-up shops
around the globe beginning early July.While pop-up stores are
seen as short-term sale spaces within the larger retail format
(shop-in-shop) or as a stand-alone construct, retailers are finding the
concept malleable and experimental enough to play around with.
Maithili Ahluwalia of Mumbai-based Bungalow 8, who is currently hosting Glocal 012, a 12-part pop-up series featuring designers from across the globe “who are creating locally while thinking globally”, has just opened with Lebanese designer Dareen Hakim’s limited edition collection of handbags displayed via a unique installation within her Colaba store. “We’ve always had trunk shows, so pop-up for me is just a modern, chic and more elaborate version of the same. In a pop-up format, a designer is essentially able to express the brand’s aesthetic by redesigning the space and making it their own,” says Ahluwalia.
Over the course of the year, the Bungalow 8 sales floor (this could be any section of the store) will transform for pop-ups by clothes brand Injiri by Chinar Farooqui from Jaipur, New York-based jewellery label Gemma Redux, bikini designer Tara Matthews from London and jewellery designer Tara Thadani from Singapore, among others. And with every change Ahluwalia expects customer interest in her nearly decade-old store to grow. “We’ve always believed in keeping retail very exciting. And introducing new talents on a regular basis provides a wonderful opportunity to do that,” she says.
Happy with the response, Le Mill intends to organize a pre-Diwali pop-up shop in Delhi in October to strengthen their presence in the Capital, and hopes to tap potential markets in Hyderabad, Kolkata and Chennai in the future. While Bungalow 8 currently maintains a small pop-up store at the Four Seasons Hotel in central Mumbai, Ahluwalia is also looking to test Delhi waters by the end of the year.
Mumbai store Atosa is stepping out of the confines of its physical walls and making plans to take its multi-designer format to smaller cities like Nagpur and Ahmedabad during the days leading up to Diwali. “With the pop-up format, we manage to target new audiences and test new markets without investing a lot of money as we carry current stock for sale,” says partner Azmina Rahimtoola.
Besides fashion stores, several online brands, like Pernia’s Pop-Up Shop (www.perniaspop upshop.co) and SquareKey (www.squarekey.com) are also using the format to build an offline connection with their online customers. Pernia Qureshi organized two physical pop-ups in Ludhiana and Delhi in May, around the time she launched her retail site. “It’s a good way to spread awareness and give people a chance to see products up close. If they buy at the pop-up and are aware of the website, then there are very high chances they will buy online too,” says Qureshi.
For Avantika Daing of SquareKey, the Popup Shop series is integral to the site’s marketing and customer acquisition process. And it is not a one-time event but an ongoing pan-India plan. “While most Indian e-commerce sites work on the sales and last-season clothes model, we offer current season lines from brands like Nanette Lepore, BCBG Max Azria, Nicole Miller, Trina Turk, etc., at competitive prices,” says Daing. In order to raise awareness, SquareKey will embark on a series of Popup Shop initiatives in north and south Mumbai, Pune, Kolkata and Delhi this month.
While suburb-specific and cross-country pop-ups gain popularity, store owners are interested in exploring international opportunities. Qureshi is in the process of planning an international pop-up store, details of which are still under wraps, Atosa will travel to Dubai in October and Jakarta in the following months. Both Obataimu and Bungalow 8 are eyeing markets in New York and Tokyo, raring to test themselves as “global” brands.
Maithili Ahluwalia of Mumbai-based Bungalow 8, who is currently hosting Glocal 012, a 12-part pop-up series featuring designers from across the globe “who are creating locally while thinking globally”, has just opened with Lebanese designer Dareen Hakim’s limited edition collection of handbags displayed via a unique installation within her Colaba store. “We’ve always had trunk shows, so pop-up for me is just a modern, chic and more elaborate version of the same. In a pop-up format, a designer is essentially able to express the brand’s aesthetic by redesigning the space and making it their own,” says Ahluwalia.
Over the course of the year, the Bungalow 8 sales floor (this could be any section of the store) will transform for pop-ups by clothes brand Injiri by Chinar Farooqui from Jaipur, New York-based jewellery label Gemma Redux, bikini designer Tara Matthews from London and jewellery designer Tara Thadani from Singapore, among others. And with every change Ahluwalia expects customer interest in her nearly decade-old store to grow. “We’ve always believed in keeping retail very exciting. And introducing new talents on a regular basis provides a wonderful opportunity to do that,” she says.
Limited
edition: Maithili Ahluwalia of Bungalow 8, Mumbai, has organized a
pop-up event to showcase Lebanese designer Dareen Hakim’s handbags; and
(left) a bag from SquareKey’s upcoming Popup Shop. Abhijit
Bhatlekar/Mint
Cecilia Morelli-Parikh and her partners at
concept lifestyle store Le Mill in Wadi Bunder, are using pop-ups to
raise awareness about their fashion and lifestyle store across the
country. Starting in April with a store-in-store pop-up at the Maison
Boutique in Bangalore, Le Mill went on to set up an independent five-day
store, curated across 6,000 sq. ft of blank space at One Style Mile in
Mehrauli, Delhi, in May.“We completely took the space over,
painted it and made furniture to display specifically for the location,”
says Morelli-Parikh. And while Le Mill is looking at an outpost in the
Capital in the near future, this was just a way of introducing the
discerning Delhi buyer to their aesthetic and bouquet of brands—“as a
precursor to opening a store there”. And the lessons learnt via the
five-day exercise were valuable. “The Delhi customer is incredibly
sophisticated and knows all about brands; from the tiniest stationery
brand to more important fashion brands. A lot of people said Delhi was
all about bling but I found that to be absolutely untrue,” she says. Happy with the response, Le Mill intends to organize a pre-Diwali pop-up shop in Delhi in October to strengthen their presence in the Capital, and hopes to tap potential markets in Hyderabad, Kolkata and Chennai in the future. While Bungalow 8 currently maintains a small pop-up store at the Four Seasons Hotel in central Mumbai, Ahluwalia is also looking to test Delhi waters by the end of the year.
Mumbai store Atosa is stepping out of the confines of its physical walls and making plans to take its multi-designer format to smaller cities like Nagpur and Ahmedabad during the days leading up to Diwali. “With the pop-up format, we manage to target new audiences and test new markets without investing a lot of money as we carry current stock for sale,” says partner Azmina Rahimtoola.
Besides fashion stores, several online brands, like Pernia’s Pop-Up Shop (www.perniaspop upshop.co) and SquareKey (www.squarekey.com) are also using the format to build an offline connection with their online customers. Pernia Qureshi organized two physical pop-ups in Ludhiana and Delhi in May, around the time she launched her retail site. “It’s a good way to spread awareness and give people a chance to see products up close. If they buy at the pop-up and are aware of the website, then there are very high chances they will buy online too,” says Qureshi.
For Avantika Daing of SquareKey, the Popup Shop series is integral to the site’s marketing and customer acquisition process. And it is not a one-time event but an ongoing pan-India plan. “While most Indian e-commerce sites work on the sales and last-season clothes model, we offer current season lines from brands like Nanette Lepore, BCBG Max Azria, Nicole Miller, Trina Turk, etc., at competitive prices,” says Daing. In order to raise awareness, SquareKey will embark on a series of Popup Shop initiatives in north and south Mumbai, Pune, Kolkata and Delhi this month.
While suburb-specific and cross-country pop-ups gain popularity, store owners are interested in exploring international opportunities. Qureshi is in the process of planning an international pop-up store, details of which are still under wraps, Atosa will travel to Dubai in October and Jakarta in the following months. Both Obataimu and Bungalow 8 are eyeing markets in New York and Tokyo, raring to test themselves as “global” brands.
Alex Huang | Rewiring the business The country head of Asus talks about changing gears from components to personal technology
It is a grey monsoon day in Mumbai, but inside the Hyatt Regency
Mumbai, there is light and the buzz of business conversations. Alex
Huang, country head—India, System Business Group, Asus Technology Pvt.
Ltd, is already there when I walk in. Taiwanese firm Asus, once best
known for its components, and now one of the big successes in notebooks
and tablets, has been focusing increasingly on its branded business.
Huang is spearheading this effort in India.
“I’ve been in India for two years and two months,” says the 33-year-old. Of medium height and slight build, Huang is dressed formally in a black suit, black and white striped shirt and grey tie. He says he hasn’t found India too difficult. “I spent two years in Taipei doing compulsory military service. That has helped me a lot, especially when I was posted to Eastern Europe. India is also tough. But thanks to my military service experience, I know I can survive here, I can keep my peace, find a solution locally to any problems.”
“The shift to selling branded products is big. But selling white box has helped me a lot. I see things from two points of view—from the vendor’s point of view and from the customer’s point of view. I can tell the brand story right from the motherboard,“ says Huang.
The buzz recently has been about Asus’ tablets, such as the Transformer series, which can function as either a tablet or a full laptop if you plug in the included keyboard (this also increases the battery power of the system). At the same time, the company garnered a lot of attention when Google announced that the Nexus 7 tablet, the first Nexus tablet, was being manufactured by Asus (Nexus is Google’s line of “pure” Android experiences. Phones such as the Samsung Galaxy Nexus are viewed as Android flagships).
The
India launch of the Nexus will be in October, says Huang. Though the
tablets are making news, it is the notebooks that comprise 85% of Asus’
product mix, says Huang, and it is this segment he is focusing on.
Besides the entry-level notebooks, Asus has high-end versions like the
ZENBOOK and the G series gaming notebooks, along with medium-priced
models.Asus has 5% of the five-million market annually for
personal computers, including notebooks, in India, estimates Huang. “I
can’t tell you figures, but you can estimate approximately,” he says.
Asus sold around 250,000 notebooks last year, each of an average value
of Rs. 25,000, giving it an approximate turnover of Rs. 625 crore.
In the two years since Huang has been here, the company has grown in size from 43 employees to 140, and in sales from 20,000 units to 250,000 a year. “All the employees except two are Indian,” he says, adding, “most of them (almost 85%) report directly to me. We have a flat organizational structure. Right now it is centralized because most of the communications to Taipei have to be through me. In business, this is always in conflict. If you centralize too much, you don’t have time for long-range planning. But to trust people to be independent, you need time to build a good structure, we are trying to do that,” he says.
The
waiter arrives with the steak and sandwich, and we pause to dig into
the food. We talk about trends in technology. “There are two
perspectives on technology today,” says Huang. “One view is the people
who feel it will become consolidated. Your tablet, phone, computer will
become one device. Because of that they make the tablets powerful, they
make the phones multifunction, they make the laptops 3G. But if you ask
me, people use different devices for different scenarios, so every
device should have a unique feature.”Huang feels battery life
and camera quality are important for smartphones, while laptops should
be powerful, easy to switch on and include all the latest software in
order to permit easy compatibility across platforms.
As we wait for our coffee, I ask him what is holding Asus back, given the superiority and competitive price points of their notebooks. Huang frowns a little, taking a moment to understand what I mean by “holding back”. “We are a much newer company in the branded notebook market. We started 12 years ago while our competitors have been in the market for more than 20 years. In India, the challenge is distribution. There are no formats like Best Buy and Amazon, which internationally stock our products.”
Huang found distributors resisted stocking Asus because they complained there was little brand awareness of the Asus notebook. So this year Asus has started advertising in a small way in the print medium. It has also started setting up retail stores in tier II, III and IV towns. Besides 60 retail stores, Asus is also focusing on e-commerce, which Huang feels will take off once the logistics of delivery to tier III and IV towns are surmounted.
“To do complicated things you need to be a simple man,” he says of the many business issues and, of course, the challenges of living in a strange land. “The traffic in Mumbai is so terrible. In Taipei, I enjoy driving my BMW. The 20-30 minutes spent driving is time with myself. Here, the traffic is so bad it is torture. I go to sleep in the back seat of my Innova and only wake up when I reach my destination. Because if I am awake, I get angry.”
Besides driving to business meetings, Huang commutes on weekend mornings to High Street Phoenix in mid-town Mumbai to play basketball with a group of Taiwanese friends. “We discuss business, trends and, most important, where we will go to eat on Sunday!” Huang is a foodie, he says; he’s also a great cook and turns out a mean seafood risotto. “Some Sundays we go to the champagne brunch at the Four Seasons Hotel Mumbai, sometimes to ITC Grand Central and also to cafés in Bandra like Salt Water Grill,” he says.
Huang has just got engaged. His fiancée Alice is a product manager for Asus, based in Taipei. “We are still discussing what we will do after we get married,” he confesses. “I like India. I like Delhi for food and clothing, Kerala for a good vacation spot and Mumbai because you feel safe. There are many foreigners here. But India may not be easy for everybody. For me, yes, I’m fine, but maybe not for everybody.”
“I’ve been in India for two years and two months,” says the 33-year-old. Of medium height and slight build, Huang is dressed formally in a black suit, black and white striped shirt and grey tie. He says he hasn’t found India too difficult. “I spent two years in Taipei doing compulsory military service. That has helped me a lot, especially when I was posted to Eastern Europe. India is also tough. But thanks to my military service experience, I know I can survive here, I can keep my peace, find a solution locally to any problems.”
Note this: Asus’ Transformer series tablets double up as laptops when you plug in the included keyboard. Jayachandran/Mint
Much
of Huang’s time in India has been spent criss-crossing the country,
setting up a distribution network for Asus. “I travel three weeks in a
month. Recently, I have been to Delhi, Kolkata, Ahmedabad, Agra,
Chennai, Jaipur and Ranchi,” says Huang, who has a master’s degree in
management science, specializing in marketing communication, from Taipei
and an MBA in finance from the Illinois Institute of Technology,
Chicago.We sit down to lunch and order—a steak for Huang and a
chicken harissa sandwich for me. Huang, who began his career in Asus in
2006 selling components in Eastern Europe, speaks now about selling
branded products. “I was in the Netherlands and Norway looking after
white box (personal computers or servers without a registered brand
name) sales for two years.” Shifting to Bulgaria and Romania, he moved
to the sale of notebooks, increasing the Asus market share in Romania
from 2% to 24%.“The shift to selling branded products is big. But selling white box has helped me a lot. I see things from two points of view—from the vendor’s point of view and from the customer’s point of view. I can tell the brand story right from the motherboard,“ says Huang.
The buzz recently has been about Asus’ tablets, such as the Transformer series, which can function as either a tablet or a full laptop if you plug in the included keyboard (this also increases the battery power of the system). At the same time, the company garnered a lot of attention when Google announced that the Nexus 7 tablet, the first Nexus tablet, was being manufactured by Asus (Nexus is Google’s line of “pure” Android experiences. Phones such as the Samsung Galaxy Nexus are viewed as Android flagships).
In the two years since Huang has been here, the company has grown in size from 43 employees to 140, and in sales from 20,000 units to 250,000 a year. “All the employees except two are Indian,” he says, adding, “most of them (almost 85%) report directly to me. We have a flat organizational structure. Right now it is centralized because most of the communications to Taipei have to be through me. In business, this is always in conflict. If you centralize too much, you don’t have time for long-range planning. But to trust people to be independent, you need time to build a good structure, we are trying to do that,” he says.
As we wait for our coffee, I ask him what is holding Asus back, given the superiority and competitive price points of their notebooks. Huang frowns a little, taking a moment to understand what I mean by “holding back”. “We are a much newer company in the branded notebook market. We started 12 years ago while our competitors have been in the market for more than 20 years. In India, the challenge is distribution. There are no formats like Best Buy and Amazon, which internationally stock our products.”
Huang found distributors resisted stocking Asus because they complained there was little brand awareness of the Asus notebook. So this year Asus has started advertising in a small way in the print medium. It has also started setting up retail stores in tier II, III and IV towns. Besides 60 retail stores, Asus is also focusing on e-commerce, which Huang feels will take off once the logistics of delivery to tier III and IV towns are surmounted.
“To do complicated things you need to be a simple man,” he says of the many business issues and, of course, the challenges of living in a strange land. “The traffic in Mumbai is so terrible. In Taipei, I enjoy driving my BMW. The 20-30 minutes spent driving is time with myself. Here, the traffic is so bad it is torture. I go to sleep in the back seat of my Innova and only wake up when I reach my destination. Because if I am awake, I get angry.”
Besides driving to business meetings, Huang commutes on weekend mornings to High Street Phoenix in mid-town Mumbai to play basketball with a group of Taiwanese friends. “We discuss business, trends and, most important, where we will go to eat on Sunday!” Huang is a foodie, he says; he’s also a great cook and turns out a mean seafood risotto. “Some Sundays we go to the champagne brunch at the Four Seasons Hotel Mumbai, sometimes to ITC Grand Central and also to cafés in Bandra like Salt Water Grill,” he says.
Huang has just got engaged. His fiancée Alice is a product manager for Asus, based in Taipei. “We are still discussing what we will do after we get married,” he confesses. “I like India. I like Delhi for food and clothing, Kerala for a good vacation spot and Mumbai because you feel safe. There are many foreigners here. But India may not be easy for everybody. For me, yes, I’m fine, but maybe not for everybody.”
EBay lures big retailers in Amazon battle EBay chief has been telling retailers that Amazon is their enemy, while eBay is a friend
EBay Inc.,
once a scrappy auction site for mom and pop sellers, is enticing some of
the world’s largest retailers by arguing it can help them compete
better against e-commerce leader Amazon.com Inc.
EBay
chief executive John Donahoe and other executives have been telling
retailers that Amazon is their enemy, while eBay is a friend because,
unlike Amazon, it holds no inventory.Amazon buys products
wholesale, stores them in inventory and sells them to consumers at
higher prices—like all retailers. EBay says it just matches buyers and
sellers.
That message is sinking in, especially among brick and mortar retailers that are losing market share to Amazon.
“As retailers look for new vehicles for growth, eBay becomes a natural partner—a better partner than Amazon,” said Sucharita Mulpuru, an e-commerce analyst at Forrester Research.
When RadioShack Corp. reported a surprise quarterly loss last month, chief executive Jim Gooch told analysts that the electronics retailer had set up an eBay storefront to help the company reach new customers online.
Barnes and Noble, Toys “R” Us, GNC Holdings , Aeropostale and Neiman Marcus are among other big retailers that now have storefronts on eBay. Best Buy Co. Inc. sells mobile phones and wireless plans on eBay.
On Monday, eBay said it was testing a same-day delivery service called eBay Now with Target Corp., the second largest US retailer, and other big retailers including Macy’s Inc., Nordstrom Inc. and Walgreen Co. Amazon offers same-day delivery in some areas already.
The foundations of eBay Now rest on Milo, a start-up eBay acquired in late 2010 which lets merchants upload in-store inventory onto eBay’s online marketplace. When shoppers search on eBay now, they see what online sellers are offering, but also which nearby physical stores carry the product.
More than 50,000 stores in the US have uploaded inventory to eBay, through Milo, including major retailers Home Depot Inc., Ikea, Lowe’s Companies Inc., Sears Holdings Corp. and JC Penney Company Inc.
“It’s simple: location, location, location,” said Ben Schachter, an analyst at Macquarie. “Sellers have to go to where the buyers are.”
EBay has more than 100 million active shoppers on its online marketplace, he noted.
“Retailers don’t have those kinds of numbers coming to their sites and buying,” Schachter said. “They would love to only sell through their own site, but they have to go where the buyers are, and many are on eBay.”
‘Worst-kept secret’
Amazon has a lot more active customers—about 180 million—but some retailers steer clear still.
Barnes and Noble, which has been hammered by Amazon, has had an eBay storefront since late 2010 and mostly uses it to sell refurbished Nook gadgets. Toys and books were added in May 2011.
“EBay has been an exceptional partner, working with Barnes and Noble to effectively promote Nook to its massive user base,” said Barnes and Noble spokeswoman Mary Ellen Keating. “Amazon is a competitor. We don’t sell on Amazon and have no plans to do so.”
Toys “R” Us does not sell on Amazon either. More than a decade ago, the largest toy retailer had exclusive rights to supply some toys on Amazon’s website. That partnership ended in litigation and Amazon is now a leading toy retailer in its own right.
“It’s the worst-kept secret in the retail industry,” said Mulpuru. “When you partner with Amazon, they are looking at your data, learning your business and have ambition to get into every category.”
Among the 100 largest retailers in the US, most are choosing eBay over Amazon, according to Scot Wingo, chief executive of ChannelAdvisor, which helps merchants sell on both online marketplaces.
An Amazon spokesman declined to comment.
Amazon’s marketplace for third-party sellers is growing rapidly and Wingo said that would not be happening if all retailers thought Amazon was the enemy.
The lure of Amazon’s massive customer base is still powerful for many.
“We take any chance of getting new eyeballs and Amazon is just so large in the world of e-commerce,” said Jerry Deboer, senior vice-president of marketing at Jos. A. Bank, which has Amazon and eBay stores.
RadioShack also has both, and big retailers including Office Max and Sephora run Amazon stores.
Adding large sellers to eBay’s marketplace helps the company in several ways.
EBay takes a cut of sales, so higher-volume sellers may help the company generate more revenue and profit.
EBay and retailers declined to discuss fees. However, eBay charges less for top sellers and negotiates individual deals with the biggest and best, according to Wingo.
EBay has struggled in the past because some of the products on its site were listed poorly or of questionable quality, and customer service from small sellers is not always what it could be. Big retailers are more likely to sell higher-quality products, categorize them more and provide better service.
Different shoppers
Retailers say eBay storefronts attract different shoppers than the ones who come to their own websites and physical stores.
EBay shoppers often search for deals, so some retailers use eBay to sell end-of-season or outlet products at lower prices.
Neiman Marcus’s eBay storefront sells apparel, shoes and accessories under the Last Call brand, its outlet business.
EBay provides data to retailers to help them check if the shoppers who come to their eBay storefronts overlap with their existing customer base, according to Michael Jones, vice president of merchant development at eBay.
“By and large, people see this as a very significant incremental channel for them,” Jones said.
In early 2010, eBay started including storefront inventory in results when shoppers searched on the website’s front page. That has helped retailers place their products in front of more consumers, according to Jones. Reuters
That message is sinking in, especially among brick and mortar retailers that are losing market share to Amazon.
“As retailers look for new vehicles for growth, eBay becomes a natural partner—a better partner than Amazon,” said Sucharita Mulpuru, an e-commerce analyst at Forrester Research.
When RadioShack Corp. reported a surprise quarterly loss last month, chief executive Jim Gooch told analysts that the electronics retailer had set up an eBay storefront to help the company reach new customers online.
Barnes and Noble, Toys “R” Us, GNC Holdings , Aeropostale and Neiman Marcus are among other big retailers that now have storefronts on eBay. Best Buy Co. Inc. sells mobile phones and wireless plans on eBay.
On Monday, eBay said it was testing a same-day delivery service called eBay Now with Target Corp., the second largest US retailer, and other big retailers including Macy’s Inc., Nordstrom Inc. and Walgreen Co. Amazon offers same-day delivery in some areas already.
The foundations of eBay Now rest on Milo, a start-up eBay acquired in late 2010 which lets merchants upload in-store inventory onto eBay’s online marketplace. When shoppers search on eBay now, they see what online sellers are offering, but also which nearby physical stores carry the product.
More than 50,000 stores in the US have uploaded inventory to eBay, through Milo, including major retailers Home Depot Inc., Ikea, Lowe’s Companies Inc., Sears Holdings Corp. and JC Penney Company Inc.
“It’s simple: location, location, location,” said Ben Schachter, an analyst at Macquarie. “Sellers have to go to where the buyers are.”
EBay has more than 100 million active shoppers on its online marketplace, he noted.
“Retailers don’t have those kinds of numbers coming to their sites and buying,” Schachter said. “They would love to only sell through their own site, but they have to go where the buyers are, and many are on eBay.”
‘Worst-kept secret’
Amazon has a lot more active customers—about 180 million—but some retailers steer clear still.
Barnes and Noble, which has been hammered by Amazon, has had an eBay storefront since late 2010 and mostly uses it to sell refurbished Nook gadgets. Toys and books were added in May 2011.
“EBay has been an exceptional partner, working with Barnes and Noble to effectively promote Nook to its massive user base,” said Barnes and Noble spokeswoman Mary Ellen Keating. “Amazon is a competitor. We don’t sell on Amazon and have no plans to do so.”
Toys “R” Us does not sell on Amazon either. More than a decade ago, the largest toy retailer had exclusive rights to supply some toys on Amazon’s website. That partnership ended in litigation and Amazon is now a leading toy retailer in its own right.
“It’s the worst-kept secret in the retail industry,” said Mulpuru. “When you partner with Amazon, they are looking at your data, learning your business and have ambition to get into every category.”
Among the 100 largest retailers in the US, most are choosing eBay over Amazon, according to Scot Wingo, chief executive of ChannelAdvisor, which helps merchants sell on both online marketplaces.
An Amazon spokesman declined to comment.
Amazon’s marketplace for third-party sellers is growing rapidly and Wingo said that would not be happening if all retailers thought Amazon was the enemy.
The lure of Amazon’s massive customer base is still powerful for many.
“We take any chance of getting new eyeballs and Amazon is just so large in the world of e-commerce,” said Jerry Deboer, senior vice-president of marketing at Jos. A. Bank, which has Amazon and eBay stores.
RadioShack also has both, and big retailers including Office Max and Sephora run Amazon stores.
Adding large sellers to eBay’s marketplace helps the company in several ways.
EBay takes a cut of sales, so higher-volume sellers may help the company generate more revenue and profit.
EBay and retailers declined to discuss fees. However, eBay charges less for top sellers and negotiates individual deals with the biggest and best, according to Wingo.
EBay has struggled in the past because some of the products on its site were listed poorly or of questionable quality, and customer service from small sellers is not always what it could be. Big retailers are more likely to sell higher-quality products, categorize them more and provide better service.
Different shoppers
Retailers say eBay storefronts attract different shoppers than the ones who come to their own websites and physical stores.
EBay shoppers often search for deals, so some retailers use eBay to sell end-of-season or outlet products at lower prices.
Neiman Marcus’s eBay storefront sells apparel, shoes and accessories under the Last Call brand, its outlet business.
EBay provides data to retailers to help them check if the shoppers who come to their eBay storefronts overlap with their existing customer base, according to Michael Jones, vice president of merchant development at eBay.
“By and large, people see this as a very significant incremental channel for them,” Jones said.
In early 2010, eBay started including storefront inventory in results when shoppers searched on the website’s front page. That has helped retailers place their products in front of more consumers, according to Jones. Reuters
Indian firms warm up to mystery audits Small, mid-sized and large companies are warming up to the idea of mystery shopping, which enables them to audit their own performance in terms of customer service and a host of other parameters
Shruthy Menon strolls at a shopping mall or tries out the offerings
at a mass market food chain when she gets time away from her job at a
television production company in Mumbai. Not unusual for a 25-year-old,
perhaps, but Menon actually gets paid for her leisure pursuits.
Menon is part of a service industry called mystery shopping that may be finally taking off in India. In the past six months, she has undertaken 10 mystery shopping audits for companies in categories ranging from food and beverages to beauty salons, anonymously evaluating customer service and providing feedback about her experiences.
Small, mid-sized and large companies are warming up to the idea of mystery shopping, which enables them to audit their own performance in terms of customer service and a host of other parameters. Often, companies use mystery shoppers to size up the competition as well.
Bare Associates International Inc., a US-based mystery shopping company that entered India in 2006, was hit by the economic downturn that followed two years later when the US financial crisis erupted. Business has since improved and the company has close to 100 clients, said Sonul Verdia, general manager for India, Middle East and Africa. “We are seeing tremendous growth in all areas, specially retail, insurance, hospitality. Most of the businesses and industries are now customer-facing and see potential revenues coming from delivering customer services,” said Verdia, who works with clients in the retail, beauty and wellness categories.
A typical mystery shopping audit covers the upkeep of the store, ambience, infrastructure, staff attitude, response time, knowledge, and experiences at the sales counter and point of exit. A survey form covers every aspect of a consumer’s experience with a brand. A sample survey form given by a mystery shopping agency includes specific points such as the tone of a salesperson, store hygiene and the nature of pleasantries exchanged during a mystery shopping trip.
“The awareness for exclusive mystery shopping services has gone up,” said Sanjeev Shenoy, managing director of HS Brands International, another US-based company that provides mystery shopping audits. “We saw 20-25% growth in the first two years of our entry into India in 2008, owing to a slow retail scenario, but now we are seeing 40-45% growth.” The company claims to have 6,000 registered mystery shoppers.
Pankaj Guglani, who started mystery shopping services provider RedQuanta in Mumbai in 2009, has seen his client base increase from four to 50, spanning brands from the service industry to auto and consumer goods makers. Guglani, who raised a second round of funding earlier this year, is surprised to see small companies such as retailer Chunmun showing interest in the audits. “Smaller companies led by second generation entrepreneurs who want to expand their businesses are taking the plunge,” he said.
Evaluating the competition is also a key element for companies that use mystery shoppers.
About “60% of our clients want to check on how competition services customers and then establish benchmarks for themselves,” said Shenoy.
For instance, three months ago, global e-commerce company Amazon.com Inc. that is said to be eyeing an entry into India engaged in a mystery audit for an intensive market survey to study the e-commerce market in the country, said Amazon.
Fast-food chain Mad Over Donuts has been using mystery shoppers across its 32 outlets for the last 18 months. “We do this to ensure consistent quality across all our stores,” said Tarak Bhattacharya, chief executive at the chain run by Singapore-based Pragati Ventures Pvt. Ltd.
Automobile maker Ford claims to have got tangible results from mystery shopping audits in the last two years. “The audits happen every quarter or every month on parameters such as customer experience, dealership experience or to take a closer look at the sales processes,” said Anurag Mehrotra, vice-president (marketing) at Ford India.
What has improved at the auto maker is the speed with which customer queries are addressed. “The amount of time you take to generate a lead and the time taken to get in touch with customer(s) has decreased to about a tenth of the original time,” said Mehrotra.
The profile of a mystery shopper depends on the requirement of the client. Bare International, for instance, maintains a large database segmented by income, preferences, age and seniority.
“While we may pick a senior citizen for an insurance company, a person with a net annual income of Rs.25-30 lakh may be engaged for a luxury car audit,” said Verdia.
Menon is part of a service industry called mystery shopping that may be finally taking off in India. In the past six months, she has undertaken 10 mystery shopping audits for companies in categories ranging from food and beverages to beauty salons, anonymously evaluating customer service and providing feedback about her experiences.
Small, mid-sized and large companies are warming up to the idea of mystery shopping, which enables them to audit their own performance in terms of customer service and a host of other parameters. Often, companies use mystery shoppers to size up the competition as well.
Mock
exercise: Secret shopping is estimated to be a $150 million business in
India by annual revenue and growing at a yearly clip of 30-40%. Photo:
Indranil Bhoumik/Mint
From small local retailers such as
Chunmun, a multi-brand apparel retailer in New Delhi, and caterer Bittoo
Tikki Wala to car maker Ford India Pvt. Ltd, Samsung Electronics Co.
Ltd and Citibank NA, businesses are using mystery audits across
different points of sales to track consumer experience. According to industry estimates, mystery shopping is a $150 million (around Rs.835 crore) business in India by annual revenue and growing at a yearly clip of 30-40%.Bare Associates International Inc., a US-based mystery shopping company that entered India in 2006, was hit by the economic downturn that followed two years later when the US financial crisis erupted. Business has since improved and the company has close to 100 clients, said Sonul Verdia, general manager for India, Middle East and Africa. “We are seeing tremendous growth in all areas, specially retail, insurance, hospitality. Most of the businesses and industries are now customer-facing and see potential revenues coming from delivering customer services,” said Verdia, who works with clients in the retail, beauty and wellness categories.
A typical mystery shopping audit covers the upkeep of the store, ambience, infrastructure, staff attitude, response time, knowledge, and experiences at the sales counter and point of exit. A survey form covers every aspect of a consumer’s experience with a brand. A sample survey form given by a mystery shopping agency includes specific points such as the tone of a salesperson, store hygiene and the nature of pleasantries exchanged during a mystery shopping trip.
“The awareness for exclusive mystery shopping services has gone up,” said Sanjeev Shenoy, managing director of HS Brands International, another US-based company that provides mystery shopping audits. “We saw 20-25% growth in the first two years of our entry into India in 2008, owing to a slow retail scenario, but now we are seeing 40-45% growth.” The company claims to have 6,000 registered mystery shoppers.
Pankaj Guglani, who started mystery shopping services provider RedQuanta in Mumbai in 2009, has seen his client base increase from four to 50, spanning brands from the service industry to auto and consumer goods makers. Guglani, who raised a second round of funding earlier this year, is surprised to see small companies such as retailer Chunmun showing interest in the audits. “Smaller companies led by second generation entrepreneurs who want to expand their businesses are taking the plunge,” he said.
Evaluating the competition is also a key element for companies that use mystery shoppers.
About “60% of our clients want to check on how competition services customers and then establish benchmarks for themselves,” said Shenoy.
For instance, three months ago, global e-commerce company Amazon.com Inc. that is said to be eyeing an entry into India engaged in a mystery audit for an intensive market survey to study the e-commerce market in the country, said Amazon.
Fast-food chain Mad Over Donuts has been using mystery shoppers across its 32 outlets for the last 18 months. “We do this to ensure consistent quality across all our stores,” said Tarak Bhattacharya, chief executive at the chain run by Singapore-based Pragati Ventures Pvt. Ltd.
Automobile maker Ford claims to have got tangible results from mystery shopping audits in the last two years. “The audits happen every quarter or every month on parameters such as customer experience, dealership experience or to take a closer look at the sales processes,” said Anurag Mehrotra, vice-president (marketing) at Ford India.
What has improved at the auto maker is the speed with which customer queries are addressed. “The amount of time you take to generate a lead and the time taken to get in touch with customer(s) has decreased to about a tenth of the original time,” said Mehrotra.
The profile of a mystery shopper depends on the requirement of the client. Bare International, for instance, maintains a large database segmented by income, preferences, age and seniority.
“While we may pick a senior citizen for an insurance company, a person with a net annual income of Rs.25-30 lakh may be engaged for a luxury car audit,” said Verdia.
Earlier this month, Times Internet Ltd, the digital media company of Bennett, Coleman and Co. Ltd, was selected by the department of telecommunications (DoT) to conduct the 2G spectrum auction online. Although tight-lipped about the e-auction details, Satyan Gajwani, the company’s newly appointed chief executive officer (CEO) married to BCCL vice-chairman Samir Jain’s daughter, shared his plan to make Times Internet nimble and profitable. Edited excerpts: How are you preparing for the 2G spectrum auction? Satyan Gajwani, CEO, Times Internet Ltd. Photo: Ramesh Pathania/Mint Satyan Gajwani, CEO, Times Internet Ltd. Photo: Ramesh Pathania/Mint I can’t talk to you about this very much. The technology is already done. We have an e-auctioning platform, which handles simultaneous multi-bidding. There is some customization required for DoT. Right now, what we are doing is security testing. We are just making sure it is super secure, stable and reliable. The system would be so rigorous that no one on our side will know anything about the bids. They will be encrypted. Was the e-auction platform built in anticipation of the 2G auction? It was built earlier. We believe that e-auctioning and e-bidding for tenders or things in general will be big globally. If this is rigorous and strong enough for a 2G auction, then there is no reason why the same platform shouldn’t be strong enough for e-bidding in the US or in Europe. Although Times group launched the online business in 1999, it has been overtaken by younger and smarter companies, especially in e-commerce. What went wrong? The interesting thing is we have participated in everything on the Internet—travel, shopping, news, video, email. Obviously, we have had varying levels of success. You are absolutely right that there have been competitors in each of these businesses and in certain ones they passed us. The question I asked when I joined, why that happened? Is it something structural or strategic? It is a little bit of both. The two major changes that I am trying to make are, one, to structure it like a start-up. So, instead of being one big company, we are turning ourselves into 15 little companies. Each business head is like a CEO and I am more chairman than a CEO. The second thing we are doing is putting emphasis on product and technology. The best analogy I can give is that there is this new CEO at Yahoo—Marissa Mayer. The reason why people are so excited about her is that she is a products person. If a product is really strong, advertising follows. Text, audio, video, photos, is content. How I interact with that content is (a) product. Traditionally, we have been a media company where content and advertising comes first. We were a content company that used technology. Now we are a technology company that uses content. But you have everything—shopping, news and entertainment—all under one roof. Aren’t you confusing the consumer? Today, we run about 15 verticals, The Times of India, The Economic Times, Indiatimes shopping and others. We are trying to run them like independent companies. Actually, legally we have changed our structure. Now Indiatimes Shopping is a separate company. Gaana.com (music website) and news are also separate. In the next few months, we will rebrand shopping. In e-commerce, we are not as big in revenues as Flipkart, but two things make us different and, in my mind, a little better. We are very capital-efficient. Say, if another company has invested Rs. 100-150 crore and has a revenue of Rs. 300-400 crore, our investment has been Rs. 30-40 crore and this year we will do like Rs. 300 crore. We are building a two-tier structure. We are launching a website called SatvikShop.com, an Ayurveda products vertical selling food and personal care items. The same products are going to be available on Indiatimes Shopping. For us, these are just different front ends as we have invested time and effort in the back-end. Are you looking for investors in these businesses? Indiatimes traditionally has been very protective about investments. The way we look at the world now is these businesses need a lot of money and we must give money even if it means giving them an investor, a partner. So we may not raise money in the news portal as it is our core property, but I want Gaana.com to be a Rs. 1,000 crore business. You mentioned that Internet companies need to be nimble. In the digital space, you are competing with start-ups and not big companies. Big companies are burdened by heavy bureaucracy, big approval structures and giant hierarchies. Internet companies cannot run that way. You have to be able to run them quickly, efficiently, nimbly and that can happen with separate ownership. For instance, we will be giving Esops (employee stock options). The shopping management team will own a piece of shopping, which again is very different from the way Times group operates. Times is very strict about equity. But we believe people are going to build this business. Isn’t it too late to change? E-commerce is a great space, but what excites me is the next wave of Internet companies in digital entertainment. Gaana.com is already the largest music service in India. I know we have been talking of BoxTV, the video site comprising films and television shows, for a while now. The product is done, but content deals are taking time. We should build something so good that people would pay for it ultimately. Fortunately, there are global comparables that prove it works. When will your Rs. 261.6 crore deal for Internet, mobile and radio rights for the Indian Premier League (IPL) make money? IPL was a big deal for us. It brought to the centre that we are a serious digital video company. YouTube, which is our partner now, was also competing. IPL is a lot of money definitely. The first year we lost money, but we weren’t thinking about sales. The challenge was to get the site working in nine days. But advertisers are loving it. We have two more years to go and we will make up for the losses.
Network18 Group, which holds a 60% stake in Bigtree Entertainment Pvt. Ltd, has sold a minority stake in the company that runs online ticketing service Bookmyshow.com, to venture capital (VC) investor Accel Partners for around $12 million (Rs.66 crore), said two people close to the development.
Accel Partners has also taken a stake in Bigtree through primary issuance of shares, said one of the two persons, who spoke on condition of anonymity.
“The overall investment ticket is larger (than $12 million) as Accel Partners has also invested in the company,” said the person. Network18 will continue to be a majority investor in Bigtree, said the person, who declined to divulge the total amount Accel is putting into the company.
Bigtree had mandated Mumbai-based investment bank Avendus Capital Pvt. Ltd for this deal.
Sai Kumar, group chief executive of Network18 Media and Investments Ltd, declined to comment. An email sent to Prashanth Prakash, partner of Accel Partners, on Tuesday did not elicit any response. Accel Partners’ partner Subrata Mitra also did not respond to text messages.
Bigtree Entertainment’s founder and chief executive Ashish Hemrajani, too, did not respond to a mail sent by Mint. Calls made to him also remained unanswered.
In 2007, the Raghav Bahl-promoted Network18 bought a strategic stake in Bigtree Entertainment. The company was founded in 1999. Its ticketing service, Bookmyshow.com, was launched in 2007 and allows users to buy tickets for movies, concerts, sports events and plays across India.
Revenue generated from Bookmyshow.com is accounted under Web18, the Internet and mobile arm of Network18. For the financial year ended March 2012, Web18’s revenues grew 18.6% to Rs.100.7 crore from Rs..84.9 crore in the year earlier. However, for the fourth quarter ended 31 March, revenue was at Rs.25.9 crore, almost flat compared to a year ago.
Over $500 million was invested in 67 e-commerce deals last year, according to estimates by VCCEdge, which tracks investment activity. The Internet and Mobile Association of India pegs the number of Internet users in India at more than 100 million, and forecasts the number to triple by 2014-15.
But the going will not be easy any longer for e-commerce companies. “Investors are becoming very selective about investing in these firms. Unless there is something that sets apart a company from others, fund raising will not be easy,” said Siddharth Bafna, partner and head of the corporate finance and transaction services practice at Lodha and Co.
Accel Partners has also taken a stake in Bigtree through primary issuance of shares, said one of the two persons, who spoke on condition of anonymity.
“The overall investment ticket is larger (than $12 million) as Accel Partners has also invested in the company,” said the person. Network18 will continue to be a majority investor in Bigtree, said the person, who declined to divulge the total amount Accel is putting into the company.
Bigtree had mandated Mumbai-based investment bank Avendus Capital Pvt. Ltd for this deal.
Sai Kumar, group chief executive of Network18 Media and Investments Ltd, declined to comment. An email sent to Prashanth Prakash, partner of Accel Partners, on Tuesday did not elicit any response. Accel Partners’ partner Subrata Mitra also did not respond to text messages.
Bigtree Entertainment’s founder and chief executive Ashish Hemrajani, too, did not respond to a mail sent by Mint. Calls made to him also remained unanswered.
In 2007, the Raghav Bahl-promoted Network18 bought a strategic stake in Bigtree Entertainment. The company was founded in 1999. Its ticketing service, Bookmyshow.com, was launched in 2007 and allows users to buy tickets for movies, concerts, sports events and plays across India.
Revenue generated from Bookmyshow.com is accounted under Web18, the Internet and mobile arm of Network18. For the financial year ended March 2012, Web18’s revenues grew 18.6% to Rs.100.7 crore from Rs..84.9 crore in the year earlier. However, for the fourth quarter ended 31 March, revenue was at Rs.25.9 crore, almost flat compared to a year ago.
Over $500 million was invested in 67 e-commerce deals last year, according to estimates by VCCEdge, which tracks investment activity. The Internet and Mobile Association of India pegs the number of Internet users in India at more than 100 million, and forecasts the number to triple by 2014-15.
But the going will not be easy any longer for e-commerce companies. “Investors are becoming very selective about investing in these firms. Unless there is something that sets apart a company from others, fund raising will not be easy,” said Siddharth Bafna, partner and head of the corporate finance and transaction services practice at Lodha and Co.
Satyan Gajwani | Internet firms have to be nimble, can’t be burdened by bureaucracy Times Internet’s new CEO Satyan Gajwani shares his plan to make the firm nimble and profitable
Earlier this month, Times Internet Ltd, the digital media company of
Bennett, Coleman and Co. Ltd, was selected by the department of
telecommunications (DoT) to conduct the 2G spectrum auction online.
Although tight-lipped about the e-auction details, Satyan Gajwani, the
company’s newly appointed chief executive officer (CEO) married to BCCL
vice-chairman Samir Jain’s daughter, shared his plan to make Times
Internet nimble and profitable. Edited excerpts:
How are you preparing for the 2G spectrum auction?
It was built earlier. We believe that e-auctioning and e-bidding for tenders or things in general will be big globally. If this is rigorous and strong enough for a 2G auction, then there is no reason why the same platform shouldn’t be strong enough for e-bidding in the US or in Europe.
Although Times group launched the online business in 1999, it has been overtaken by younger and smarter companies, especially in e-commerce. What went wrong?
The interesting thing is we have participated in everything on the Internet—travel, shopping, news, video, email. Obviously, we have had varying levels of success. You are absolutely right that there have been competitors in each of these businesses and in certain ones they passed us.
The question I asked when I joined, why that happened? Is it something structural or strategic? It is a little bit of both. The two major changes that I am trying to make are, one, to structure it like a start-up. So, instead of being one big company, we are turning ourselves into 15 little companies. Each business head is like a CEO and I am more chairman than a CEO.
The second thing we are doing is putting emphasis on product and technology. The best analogy I can give is that there is this new CEO at Yahoo—Marissa Mayer. The reason why people are so excited about her is that she is a products person. If a product is really strong, advertising follows. Text, audio, video, photos, is content. How I interact with that content is (a) product.
Traditionally, we have been a media company where content and advertising comes first. We were a content company that used technology. Now we are a technology company that uses content.
But you have everything—shopping, news and entertainment—all under one roof. Aren’t you confusing the consumer?
Today, we run about 15 verticals, The Times of India, The Economic Times, Indiatimes shopping and others. We are trying to run them like independent companies. Actually, legally we have changed our structure. Now Indiatimes Shopping is a separate company. Gaana.com (music website) and news are also separate. In the next few months, we will rebrand shopping.
In e-commerce, we are not as big in revenues as Flipkart, but two things make us different and, in my mind, a little better. We are very capital-efficient. Say, if another company has invested Rs. 100-150 crore and has a revenue of Rs. 300-400 crore, our investment has been Rs. 30-40 crore and this year we will do like Rs. 300 crore.
We are building a two-tier structure. We are launching a website called SatvikShop.com, an Ayurveda products vertical selling food and personal care items. The same products are going to be available on Indiatimes Shopping. For us, these are just different front ends as we have invested time and effort in the back-end.
Are you looking for investors in these businesses?
Indiatimes traditionally has been very protective about investments. The way we look at the world now is these businesses need a lot of money and we must give money even if it means giving them an investor, a partner. So we may not raise money in the news portal as it is our core property, but I want Gaana.com to be a Rs. 1,000 crore business.
You mentioned that Internet companies need to be nimble.
In the digital space, you are competing with start-ups and not big companies. Big companies are burdened by heavy bureaucracy, big approval structures and giant hierarchies. Internet companies cannot run that way. You have to be able to run them quickly, efficiently, nimbly and that can happen with separate ownership. For instance, we will be giving Esops (employee stock options). The shopping management team will own a piece of shopping, which again is very different from the way Times group operates. Times is very strict about equity. But we believe people are going to build this business.
Isn’t it too late to change?
E-commerce is a great space, but what excites me is the next wave of Internet companies in digital entertainment. Gaana.com is already the largest music service in India. I know we have been talking of BoxTV, the video site comprising films and television shows, for a while now. The product is done, but content deals are taking time. We should build something so good that people would pay for it ultimately. Fortunately, there are global comparables that prove it works.
When will your Rs. 261.6 crore deal for Internet, mobile and radio rights for the Indian Premier League (IPL) make money?
IPL was a big deal for us. It brought to the centre that we are a serious digital video company. YouTube, which is our partner now, was also competing.
IPL is a lot of money definitely. The first year we lost money, but we weren’t thinking about sales. The challenge was to get the site working in nine days. But advertisers are loving it. We have two more years to go and we will make up for the losses.
How are you preparing for the 2G spectrum auction?
Satyan Gajwani, CEO, Times Internet Ltd. Photo: Ramesh Pathania/Mint
I
can’t talk to you about this very much. The technology is already done.
We have an e-auctioning platform, which handles simultaneous
multi-bidding. There is some customization required for DoT. Right now,
what we are doing is security testing. We are just making sure it is
super secure, stable and reliable. The system would be so rigorous that
no one on our side will know anything about the bids. They will be
encrypted.Was the e-auction platform built in anticipation of the 2G auction?It was built earlier. We believe that e-auctioning and e-bidding for tenders or things in general will be big globally. If this is rigorous and strong enough for a 2G auction, then there is no reason why the same platform shouldn’t be strong enough for e-bidding in the US or in Europe.
Although Times group launched the online business in 1999, it has been overtaken by younger and smarter companies, especially in e-commerce. What went wrong?
The interesting thing is we have participated in everything on the Internet—travel, shopping, news, video, email. Obviously, we have had varying levels of success. You are absolutely right that there have been competitors in each of these businesses and in certain ones they passed us.
The question I asked when I joined, why that happened? Is it something structural or strategic? It is a little bit of both. The two major changes that I am trying to make are, one, to structure it like a start-up. So, instead of being one big company, we are turning ourselves into 15 little companies. Each business head is like a CEO and I am more chairman than a CEO.
The second thing we are doing is putting emphasis on product and technology. The best analogy I can give is that there is this new CEO at Yahoo—Marissa Mayer. The reason why people are so excited about her is that she is a products person. If a product is really strong, advertising follows. Text, audio, video, photos, is content. How I interact with that content is (a) product.
Traditionally, we have been a media company where content and advertising comes first. We were a content company that used technology. Now we are a technology company that uses content.
But you have everything—shopping, news and entertainment—all under one roof. Aren’t you confusing the consumer?
Today, we run about 15 verticals, The Times of India, The Economic Times, Indiatimes shopping and others. We are trying to run them like independent companies. Actually, legally we have changed our structure. Now Indiatimes Shopping is a separate company. Gaana.com (music website) and news are also separate. In the next few months, we will rebrand shopping.
In e-commerce, we are not as big in revenues as Flipkart, but two things make us different and, in my mind, a little better. We are very capital-efficient. Say, if another company has invested Rs. 100-150 crore and has a revenue of Rs. 300-400 crore, our investment has been Rs. 30-40 crore and this year we will do like Rs. 300 crore.
We are building a two-tier structure. We are launching a website called SatvikShop.com, an Ayurveda products vertical selling food and personal care items. The same products are going to be available on Indiatimes Shopping. For us, these are just different front ends as we have invested time and effort in the back-end.
Are you looking for investors in these businesses?
Indiatimes traditionally has been very protective about investments. The way we look at the world now is these businesses need a lot of money and we must give money even if it means giving them an investor, a partner. So we may not raise money in the news portal as it is our core property, but I want Gaana.com to be a Rs. 1,000 crore business.
You mentioned that Internet companies need to be nimble.
In the digital space, you are competing with start-ups and not big companies. Big companies are burdened by heavy bureaucracy, big approval structures and giant hierarchies. Internet companies cannot run that way. You have to be able to run them quickly, efficiently, nimbly and that can happen with separate ownership. For instance, we will be giving Esops (employee stock options). The shopping management team will own a piece of shopping, which again is very different from the way Times group operates. Times is very strict about equity. But we believe people are going to build this business.
Isn’t it too late to change?
E-commerce is a great space, but what excites me is the next wave of Internet companies in digital entertainment. Gaana.com is already the largest music service in India. I know we have been talking of BoxTV, the video site comprising films and television shows, for a while now. The product is done, but content deals are taking time. We should build something so good that people would pay for it ultimately. Fortunately, there are global comparables that prove it works.
When will your Rs. 261.6 crore deal for Internet, mobile and radio rights for the Indian Premier League (IPL) make money?
IPL was a big deal for us. It brought to the centre that we are a serious digital video company. YouTube, which is our partner now, was also competing.
IPL is a lot of money definitely. The first year we lost money, but we weren’t thinking about sales. The challenge was to get the site working in nine days. But advertisers are loving it. We have two more years to go and we will make up for the losses.
FlipKart raises $150 mn from four investors The stake of the two founders has dropped to less than 40% after this fourth round of capital raising
India’s largest and most-funded e-commerce company FlipKart Online Services Pvt. Ltd, which runs retail portal FlipKart.com,
raised an undisclosed amount from four investors. Two people close to
the development said FlipKart raised $150 million in the latest round.
The names include MIH (a part of South African media company Naspers Group) and San Francisco-based family office ICONIQ Capital, besides existing investors Tiger Global and Accel Partners. MIH and ICONIQ Capital hold a minority stake in the company.
“We are excited to complete this (its fourth) round of funding, which would fuel our growth plans, and help us achieve our stated ambition of hitting $1 billion in gross merchandise value by 2015,” Sachin Bansal, co-founder and chief executive of FlipKart, said in a statement.
Earlier this month, Mint reported that the company was in talks to raise over $100 million and the latest round would see new investors infuse capital.
While Bansal decline to say how much stake was diluted with this latest round, he said his and Binny Bansal’s joint stake is now lower than 40%. Binny Bansal is co-founder and chief operating officer of FlipKart.
Founded in 2007, FlipKart has 4,800 employees and services 50,000 orders a day. Its average order size is Rs.1,200. It has a user base of 4.5 million, of which 2.6 million are active customers (those who have shopped at least once in 12 months).
FlipKart plans to invest the money raised in expanding supply chain capacities, launching new categories, and growing the talent pool. It will also look at adding verticals such as fashion apparel and shoes.
Last year, the company was looking at raising capital, having valued itself at $1 billion. It ended up raising an undisclosed amount of money from Accel and Tiger Global, with the company valued at $850 million.
In July, The Times of India newspaper reported that FlipKart would run out of money unless it raised more money in the next nine months.
E-commerce is a capital intensive business and one needs continuous flow of capital to keep the business going, said Deepak Srinath, director of Bangalore-based boutique investment bank Viedea Capital Advisors (Pvt.) Ltd. “For a sustainable, fast-growing e-commerce business, this is the kind of money a company needs. The funding round is in line with capital requirements of a company like FlipKart,” said Srinath.
Meanwhile, FlipKart expects to become operationally profitable in 2013. It will be operationally profitable on all the fixed and variable costs associated to delivery of an order, Sachin Bansal had told Mint earlier this month.
The names include MIH (a part of South African media company Naspers Group) and San Francisco-based family office ICONIQ Capital, besides existing investors Tiger Global and Accel Partners. MIH and ICONIQ Capital hold a minority stake in the company.
“We are excited to complete this (its fourth) round of funding, which would fuel our growth plans, and help us achieve our stated ambition of hitting $1 billion in gross merchandise value by 2015,” Sachin Bansal, co-founder and chief executive of FlipKart, said in a statement.
Sachin Bansal, co-founder and chief executive of FlipKart.
In its earlier three fund-raising rounds, FlipKart had raised over $80 million.IndiaDigitalReview.com, an online digital industry forum, reported on Friday that FlipKart.com
raised $150 million in the fourth round, led by South African media
group Naspers and existing investor Tiger Global. It cited multiple
unnamed sources.Earlier this month, Mint reported that the company was in talks to raise over $100 million and the latest round would see new investors infuse capital.
While Bansal decline to say how much stake was diluted with this latest round, he said his and Binny Bansal’s joint stake is now lower than 40%. Binny Bansal is co-founder and chief operating officer of FlipKart.
Founded in 2007, FlipKart has 4,800 employees and services 50,000 orders a day. Its average order size is Rs.1,200. It has a user base of 4.5 million, of which 2.6 million are active customers (those who have shopped at least once in 12 months).
FlipKart plans to invest the money raised in expanding supply chain capacities, launching new categories, and growing the talent pool. It will also look at adding verticals such as fashion apparel and shoes.
Last year, the company was looking at raising capital, having valued itself at $1 billion. It ended up raising an undisclosed amount of money from Accel and Tiger Global, with the company valued at $850 million.
In July, The Times of India newspaper reported that FlipKart would run out of money unless it raised more money in the next nine months.
E-commerce is a capital intensive business and one needs continuous flow of capital to keep the business going, said Deepak Srinath, director of Bangalore-based boutique investment bank Viedea Capital Advisors (Pvt.) Ltd. “For a sustainable, fast-growing e-commerce business, this is the kind of money a company needs. The funding round is in line with capital requirements of a company like FlipKart,” said Srinath.
Meanwhile, FlipKart expects to become operationally profitable in 2013. It will be operationally profitable on all the fixed and variable costs associated to delivery of an order, Sachin Bansal had told Mint earlier this month.
Flipkart to raise $100 mn by year-end The company is aiming to close the deal between October and December
India’s largest and most-funded e-commerce company, Flipkart Online
Services Pvt. Ltd, is in talks to raise $100 million (around Rs.555 crore).The
company, which runs the online retailer Flipkart.com, is aiming to
close the deal between October and December, said two people close to
the development who didn’t want to be identified.
“E-commerce is a capital-intensive business and (Flipkart’s) current funds will last only till next year,” said one Bangalore-based investment banker, explaining the rationale for raising money. He added that Flipkart is making a gross margin loss per unit sale.
Flipkart has raised more than $80 million in four fund-raising rounds till date. Its existing investors, Accel Partners and Tiger Global Management LLC, reinvested in the company between December and January. Sachin and Binny Bansal, co-founder and chief operating officer, currently hold less than 40% in the firm.
Experts said valuations in the e-commerce space have taken a further beating with investors questioning the model of negative gross margins and no visible path to profitability. Flipkart sorely needs the money, they said.
Last year, Flipkart was looking at raising capital when it pegged its valuation at around $1 billion, but ended up raising an undisclosed internal round from Accel and Tiger Global, which valued it at $850 million.
Founded by the two Bansals in 2007, Flipkart currently has 4,800 employees and services 50,000 orders a day. Its average order size is Rs.1,200. It has a user base of 4.5 million, of which 2.6 million are active customers (those who have shopped at least once in 12 months).
It’s eyeing sales of Rs.4,500 crore by FY15, having clocked revenue of about Rs.500 crore for the year ended 31 March.
In July, The Times of India newspaper reported that Flipkart would run out of money unless it received investment in the next nine months.
Sachin Bansal sees profits as early as next year.
“We will be operationally profitable in 2013. We were profitable in the first two years, but growth puts pressure on profits…it’s a trade off,” he said. Flipkart will be operationally profitable on all the fixed and variable costs associated with the delivery of an order, Bansal added.
“Our investments in technology and infrastructure will continue,” he said.
As volume goes up, revenue rises too, as also costs such as packaging and warehousing. “As we have our own warehousing, which has the capacity to handle growth over the next four years, our costs will increasingly come down,” said Ravi Vora, vice-president (marketing) at Flipkart.com.
Currently, all e-commerce companies in India are offering cash-on-delivery (CoD) service, basically targeting those who are not comfortable paying online. The charge for CoD goes to the e-commerce company.
In its bid to restrict cash burn and add to profitability, Flipkart has put a Rs.300 minimum order cap for the free delivery option.
“We relook at the free-delivery strategy every six months,” said Bansal, adding that as penetration of credit cards goes up, there will be less dependence on this. “CoD strategy depends on the cash dependency of an economy,” he said.
Flipkart, which acquired online electronics retailer Letsbuy.com earlier this year for an undisclosed amount, is exploring opportunities in payment gateways, content, logistics, reviews and technology. The company will also explore adding new verticals such as fashion apparel and shoes.
“We can create a separate brand if speciality experience is required,” said Bansal.
Meanwhile, dismissing market speculation that Flipkart is gearing up for a potential acquisition by a global e-commerce firm, Bansal said Flipkart is “a multi-billion dollar business and can become a large sustainable firm. There is a possibility for an IPO (initial public offering)”.
“We have seen that Internet companies have got good valuations by listing on Nasdaq or the NYSE (New York Stock Exchange),” said Deepak Srinath, director of Bangalore-based boutique investment bank Viedea Capital Advisors (Pvt.) Ltd, who said listing overseas could be an option for firms such as Flipkart. A company needs to have a record of profitability to be eligible to list in India.
According to an estimate by the Internet and Mobile Association of India, online shoppers in the country will treble to 54 million by 2015. First Data Corp. and ICICI Merchant Services, in a December report, estimated India’s e-commerce market to have grown to about Rs.50,000 crore from about Rs.19,688 crore in 2009.
“E-commerce is a capital-intensive business and (Flipkart’s) current funds will last only till next year,” said one Bangalore-based investment banker, explaining the rationale for raising money. He added that Flipkart is making a gross margin loss per unit sale.
Sachin
Bansal (left) and Binny Bansal, the co-founders of Flipkart.com.
Founded in 2007, Flipkart currently has 4,800 employees and services
50,000 orders a day.
The other
Bangalore based i-banker said there was too much emphasis on customer
acquisition, which is bleeding Flipkart at a per unit sale level. “One
cannot be so customer-centric that they (Flipkart) cannot make money…
It’s not sustainable in the long term,” he said, adding that e-commerce
firms have to start charging customers for delivery to begin with.Sachin Bansal, co-founder and chief executive at Flipkart.com, told Mint:
“We are always talking to investors. The next round will see new
investors.” He, however, did not disclose the amount the company plans
to raise in the next round.Flipkart has raised more than $80 million in four fund-raising rounds till date. Its existing investors, Accel Partners and Tiger Global Management LLC, reinvested in the company between December and January. Sachin and Binny Bansal, co-founder and chief operating officer, currently hold less than 40% in the firm.
Experts said valuations in the e-commerce space have taken a further beating with investors questioning the model of negative gross margins and no visible path to profitability. Flipkart sorely needs the money, they said.
Last year, Flipkart was looking at raising capital when it pegged its valuation at around $1 billion, but ended up raising an undisclosed internal round from Accel and Tiger Global, which valued it at $850 million.
Founded by the two Bansals in 2007, Flipkart currently has 4,800 employees and services 50,000 orders a day. Its average order size is Rs.1,200. It has a user base of 4.5 million, of which 2.6 million are active customers (those who have shopped at least once in 12 months).
It’s eyeing sales of Rs.4,500 crore by FY15, having clocked revenue of about Rs.500 crore for the year ended 31 March.
In July, The Times of India newspaper reported that Flipkart would run out of money unless it received investment in the next nine months.
Sachin Bansal sees profits as early as next year.
“We will be operationally profitable in 2013. We were profitable in the first two years, but growth puts pressure on profits…it’s a trade off,” he said. Flipkart will be operationally profitable on all the fixed and variable costs associated with the delivery of an order, Bansal added.
“Our investments in technology and infrastructure will continue,” he said.
As volume goes up, revenue rises too, as also costs such as packaging and warehousing. “As we have our own warehousing, which has the capacity to handle growth over the next four years, our costs will increasingly come down,” said Ravi Vora, vice-president (marketing) at Flipkart.com.
Currently, all e-commerce companies in India are offering cash-on-delivery (CoD) service, basically targeting those who are not comfortable paying online. The charge for CoD goes to the e-commerce company.
In its bid to restrict cash burn and add to profitability, Flipkart has put a Rs.300 minimum order cap for the free delivery option.
“We relook at the free-delivery strategy every six months,” said Bansal, adding that as penetration of credit cards goes up, there will be less dependence on this. “CoD strategy depends on the cash dependency of an economy,” he said.
Flipkart, which acquired online electronics retailer Letsbuy.com earlier this year for an undisclosed amount, is exploring opportunities in payment gateways, content, logistics, reviews and technology. The company will also explore adding new verticals such as fashion apparel and shoes.
“We can create a separate brand if speciality experience is required,” said Bansal.
Meanwhile, dismissing market speculation that Flipkart is gearing up for a potential acquisition by a global e-commerce firm, Bansal said Flipkart is “a multi-billion dollar business and can become a large sustainable firm. There is a possibility for an IPO (initial public offering)”.
“We have seen that Internet companies have got good valuations by listing on Nasdaq or the NYSE (New York Stock Exchange),” said Deepak Srinath, director of Bangalore-based boutique investment bank Viedea Capital Advisors (Pvt.) Ltd, who said listing overseas could be an option for firms such as Flipkart. A company needs to have a record of profitability to be eligible to list in India.
According to an estimate by the Internet and Mobile Association of India, online shoppers in the country will treble to 54 million by 2015. First Data Corp. and ICICI Merchant Services, in a December report, estimated India’s e-commerce market to have grown to about Rs.50,000 crore from about Rs.19,688 crore in 2009.
Mixed signals in e-tailing It’s true that the accent of India’s e-tailing sector has been on discounts rather than on choice or range of products
A friend who lives next to a cluster of malls in south Delhi has
taken to buying online. Top of her shopping list are clothes and
footwear. It’s an absolutely surprising disclosure, considering barely
two years ago she confessed to being a mall rat. Having bought close to
100 books online in the last one year, another acquaintance has
graduated to purchasing mobile phones, fragrances and sundry other items
on the Internet. He says his current bank balance is below the
permissible deposit limit because of his predilection to shop online. He
claims he sees his colleagues doing the same—not just surfing websites
but ordering as well. A row of delivery vans (and scooters) from these
shopping websites parked outside is the proof he points to.
However, not all buyers are young or logging in from their workplaces. A young colleague’s homemaker mother has got hooked to coupon sites in search of discount deals at salons and restaurants.
Examples such as these would have you believe that India’s e-commerce business is on a roll. It’s true that today everything from diapers to diamonds is available online and the rush of entrepreneurs entering this sector is showing no signs of slowing down. However, the reality is that despite the buzz around e-commerce in India, the country does not feature in the top 10 emerging markets, according to AT Kearney Retail E-commerce Index released last month.
China,
which is ranked No.1 with an estimated online retail market at $23
billion, is followed by Brazil, Russia, Chile and Mexico. The Retail
e-Commerce Index analysed the infrastructure, regulatory and
retail-specific variables for retailers interested in investing in
emerging markets. China has 513 million Internet users and 164 million
online shoppers, spending mostly on consumer electronics, apparel and
beauty products.Brazil, which spent $10.6 billion online in
2011, shops more for appliances and consumer electronics rather than
clothes. The fashionable nation prefers to buy clothes at brick and
mortar retail stores. Russia’s 15 million online shoppers surf the Web
from their mobile phones. There are 1.8 mobile phones per person in the
country, according to the report.
An earlier study on the digital consumer by Avendus, a financial services provider, pegged India’s Internet users at 80 million of which roughly nine million shop online.
This number is expected to increase to 38 million by 2015.
There may be several reasons for India’s dismal performance in the e-commerce sweepstake. Right now, the sector itself is in a flux. Business models of most e-tailing companies are less than sound devouring too much capital. The cost of customer acquisition remains high and margins are pathetic as consumers have been lured by hefty discounts. Needless to say, most of them are living from funding to funding and few will eventually survive.
But that is at the business end. There are concerns at the consumer end too. Seen through the eyes of Toshik Anand, a young professional who has just moved back to India from the US where he was primarily shopping online, the experience here leaves much to be desired. For a start, with its focus on cash on delivery which has been driving volumes for India’s e-commerce companies, payment gateways remain an issue. The “checking out process” is an irritant as very few websites store your credit card data. It is inconvenient to repeatedly feed your details for every transaction on the same website. In the US, websites throw up your details even after a single transaction, says Anand.
Secondly, most Indian websites are hawking similar stuff and the choice is narrow. The 28-year-old, who incidentally works for an online retailer, failed to find squash shoes online as most sites had listed them under tennis shoes. Besides, all of them had the same pairs, he complains. Eventually, he walked into a store to buy.
It’s true that the accent of India’s e-tailing sector has been on discounts rather than on choice or range of products. Probably unlike in the US, e-commerce in India took off because of deal sites and serious price-offs on products selling online. Guess that’s why diapers are the most popular products selling online on babycare sites as several of them offer up to 30% discount.
Except for the top three or four shopping sites, most others have service and delivery issues, too, especially if you happen to be living outside the metros. These processes need to be refined. In short, what is needed is better service, better choice and not necessarily better offers.
Jatin Modi, who works for Yebhi.com agrees that the sector has been discount driven. But he claims websites such as his are leaving no stone unturned to improve service quality. The company has introduced its own carriers called Yebhi Champs who are educated and knowledgeable about the product they deliver. The company’s newly introduced “try and buy” policy allows consumers to order more than one size or colour in a product, try them and pay for only what is kept back. The rest is returned with the Champs. “It’s like getting the trial room to your doorstep,” Modi says. The demand from tier 2 and tier 3 cities is swelling with women over 35 taking the lead in shopping online, he claims.
He believes despite the glitches e-tailing is here to stay. The gentleman with the low bank balance agrees—buying online is like an addiction. It increases slowly.
However, not all buyers are young or logging in from their workplaces. A young colleague’s homemaker mother has got hooked to coupon sites in search of discount deals at salons and restaurants.
Examples such as these would have you believe that India’s e-commerce business is on a roll. It’s true that today everything from diapers to diamonds is available online and the rush of entrepreneurs entering this sector is showing no signs of slowing down. However, the reality is that despite the buzz around e-commerce in India, the country does not feature in the top 10 emerging markets, according to AT Kearney Retail E-commerce Index released last month.
An earlier study on the digital consumer by Avendus, a financial services provider, pegged India’s Internet users at 80 million of which roughly nine million shop online.
This number is expected to increase to 38 million by 2015.
There may be several reasons for India’s dismal performance in the e-commerce sweepstake. Right now, the sector itself is in a flux. Business models of most e-tailing companies are less than sound devouring too much capital. The cost of customer acquisition remains high and margins are pathetic as consumers have been lured by hefty discounts. Needless to say, most of them are living from funding to funding and few will eventually survive.
But that is at the business end. There are concerns at the consumer end too. Seen through the eyes of Toshik Anand, a young professional who has just moved back to India from the US where he was primarily shopping online, the experience here leaves much to be desired. For a start, with its focus on cash on delivery which has been driving volumes for India’s e-commerce companies, payment gateways remain an issue. The “checking out process” is an irritant as very few websites store your credit card data. It is inconvenient to repeatedly feed your details for every transaction on the same website. In the US, websites throw up your details even after a single transaction, says Anand.
Secondly, most Indian websites are hawking similar stuff and the choice is narrow. The 28-year-old, who incidentally works for an online retailer, failed to find squash shoes online as most sites had listed them under tennis shoes. Besides, all of them had the same pairs, he complains. Eventually, he walked into a store to buy.
It’s true that the accent of India’s e-tailing sector has been on discounts rather than on choice or range of products. Probably unlike in the US, e-commerce in India took off because of deal sites and serious price-offs on products selling online. Guess that’s why diapers are the most popular products selling online on babycare sites as several of them offer up to 30% discount.
Except for the top three or four shopping sites, most others have service and delivery issues, too, especially if you happen to be living outside the metros. These processes need to be refined. In short, what is needed is better service, better choice and not necessarily better offers.
Jatin Modi, who works for Yebhi.com agrees that the sector has been discount driven. But he claims websites such as his are leaving no stone unturned to improve service quality. The company has introduced its own carriers called Yebhi Champs who are educated and knowledgeable about the product they deliver. The company’s newly introduced “try and buy” policy allows consumers to order more than one size or colour in a product, try them and pay for only what is kept back. The rest is returned with the Champs. “It’s like getting the trial room to your doorstep,” Modi says. The demand from tier 2 and tier 3 cities is swelling with women over 35 taking the lead in shopping online, he claims.
He believes despite the glitches e-tailing is here to stay. The gentleman with the low bank balance agrees—buying online is like an addiction. It increases slowly.
Top Parenting and online shopping sites for childrens
Body size preferences are flexible and can be changed by environment and
circumstance, found a British study that found stressed men prefer
overweight women. Compared to a control group, stressed men rated a
significantly heavier female body size as the most attractive, and they
rated larger female bodies as more attractive in general.
THINKSTOCK PHOTOS
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Earlier research has shown that men also prefer heavier body sizes
when resources are unpredictable or unavailable. Certain evolutionary
theories suggest this may be because when times are tough, a thin woman
may be ill, have irregular periods, and may be unable to support
pregnancy. The study also found that the stressed men gave higher
ratings to a wider range of female figures than did their unstressed
counterparts.
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babycentre.com
mammamia.com
fortishealthcare.com
indiaparenting.com
huggies.co.in
indianbabycare.com
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