NEW DELHI: LG Software, the Bangalore-based commerce service provider or CSP,
is all set to add an online payment gateway to its e-Buy, an e-commerce enabling
software service. The e-Buy service enables merchants/companies to commerce
enable their Web site by providing the back-end transaction processing
capability. Says, Aamod Wagh, Director, e-business, "Our clients need not
even change the existing Web site. The moment a customer clicks on the buy
button, we take over the job and it is up to us to ensure that the customer
makes a purchase."
The service, applicable to small merchants/companies in the Rs 50 lakh
category to corporations such as the Reliance Group, was launched a couple of
months ago. It is essentially targeted at the B2C segment, where LGSI will apply
a transaction fee along with charging an up front fee model. Anywhere between
2.5 to 3 per cent is what the company is looking at along side a fee of between
Rs 75,000 and Rs 1 lakh. The service for the B2B segment, however, will have a
flat charge, which is being worked out. The segments LGSI is targeting are the
automobile, manufacturing and consumer electronics. Quoting IMRB figures
estimating the size of the Indian e-commerce market at Rs 500 billion by 2001,
the company hopes to rope in 700-1000 customers by the end this year and expects
the figure to go to 2000 by the end of calendar year 2001.
In addition to ensuring back end transactions, LGSI will play an active role
in driving traffic to their merchants’ sites through its portal. " We
will deploy push marketing techniques as well," says Wagh. LG, which has
invested around $2.5 million in this initiative, is hoping to break even on the
investment by the end of the second year. Wagh claims to have signed up as many
as 25 companies for providing this service but chose to remain tight-lipped
about the names. Most of the Web sites would be launched by the end of February.
The commerce service provider model, though very popular in the US, is yet to
catch up in India. LGSI is the first and currently does not have any competitor.
The situation is not likely to remain the same for long though, says Wagh.