With the growing internet penetration in the country the Indian e-commerce industry is beginning to enter a new phase. More and more start ups are looking at ways of biting into the e-commerce pie. But is there room for all?
SME mentor interviews the guru of e-commerce, Alok Kejriwal, founder of Games2win, who talks to us on the current scenario of this sector and its potential to grow.
Q: Whether or not there is an ecommerce boom the truth is, you and I as consumers have suddenly been bombarded with spams in our inboxes from online retail stores. How do you see this trend from a business perspective?
Alok: There are 3 or 4 key things here.
• First: It's the laziest internet business to start today. It really doesn't take anything to start an ecommerce portal. All that you need to spend is on the domain that costs 500 rupees. You don't pay for the software. You are selling something to somebody, using someone else payment gateway and someone else's courier. And above all, someone else's money to do all of that! So actually someone else's business that you are executing!!
I think the challenge is that a lot of people love to be entrepreneurs. And ecommerce is the first standard class they all enter thinking that they will graduate from there. But graduation happens in the 12th. And they seem to have forgotten that.
• Second: The challenge is that people are looking at the glory and the glamour of the business and not the nitty-gritty's.
• Third: VC's are indulging the entrepreneur. There seems to be a phantom, a ghost. The ghost of Silicon Valley which will supposedly come, acquire them and take them home like a bride. But little do they know that their knight in shining Armour will come and drink their blood. So I actually see them becoming the brides for the Dracula!!
Do most of these ecommerce websites actually have the infrastructure to make it big?
Alok: I don't think they do. I think that a lot of these guys pretend to be having big backends, but they have these stand alone software and they are running around shoving things here and there. They are not thinking. They need to think. They need to take a step back and look at what they are trying to really do for people.
Q: A lot of entrepreneurs and experts are questioning the cash on delivery option in India. Companies have claimed that 40-50% of their deliveries are being returned due to this mode of payment. Do you really think Cash on Delivery works for Indians?
Alok: I think COD, the cash on delivery model certainly works. I am saying it's not a food item and how do you change your mind because in India everybody is doing cash on delivery. It is a culture. In fact in India the culture is show me first then I will pay. When was the last time you ordered Pizza from Dominos, brownies and told the guy that you didn't want to buy it. We all call medicines, soft drinks from shops, so we often ask for deliveries. Do you ever say after calling for delivery to go away? That means people in India pay.
Q: What about portals specializing in one product line like bags or shoes and are eventually aspiring to become Amazon.com?
Alok: I get a mail from an online retail store every single day, at 2.30 in the afternoon to buy a bed. Everyday? I got a bed when I married 22 years ago. It's doing fine. Nothing's wrong with it. Even after I die, it will exist. This is just an example, but everybody has become so desperate to show sale. In India they say, if one is selling onions and potatoes that person will be able to make his daily bread comfortably, however, the minute he decides to sell zucchini, he will have to call 20 people, make that extra effort to sell his stock.
Q: Should companies focus on a single product or spread their wings?
Alok: Just to give you an example I buy coffee only from one shop in colaba which is 300 years old and its divine. And even if they raise the price by 300 rupees I will pay for it.
I think curating the product is far more worthwhile than curating the sales of your company. You need to be more fascinated about the fact that product happens rather than overall sales. Infact I would say you should have the mentality of a small shopkeeper, a "nukkad ki dukan", rather than becoming a Westside. But then be the best at it. If you are selling agarbattis, become the King of Agargbattis!
Where do you see Flipkart going?
Alok: They have had a great first mover advantage. It's the first brand that comes to me when I think of buying. I certainly don't say that it's the only brand. For instance I have been buying this autobiography of yogi and I have given away 250 books this year. Now I'm beginning to think, is there a place where I can buy it cheaper? Since the book is the same. I know that another delay and I will certainly not remain committed anymore.
However I do see a positive about flipkart. One thing that really stunned me about them recently was their recommendation. Their recommendation of books was perfect! They send me a recommendation of 10 books and I am going to buy 8 out of them. To me that's incredible. They have really got into my mind.
What is the future of e-commerce in India and is there scope for everyone to grow?
Alok: I think there is scope for everyone to have a common funeral. They should all buy funeral pyres and sit in them and become Sati, Thats it. That will be their real outcome. There is no scope for so many of them to exists and hope that they will exist. They will die, they will burn, they will extinguish themselves.
However, what I do feel is there has been a large institutional play in ecommerce. All the offline biggies like Croma, Shopperstop, Crossword, Mad-over-donuts who actually have the brand and the customers are eventually going to turn online and will be the real heros.
If you see the Kemp's Corner Crossword shop it is at least 30,000 sq feet, it must be at least Rs 1 crore in rent. It might be easier for them to turn online. Its only a matter of time. So all these satis that are going to be sitting in the end when the fires are lit, the biggies will come and buy all of them and put them in their house. They will all become managers in Shoppers Stop and the Croma.
Incase you are immensely passionate about online retail and if you are looking at ways of innovating,
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