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e-shopping soars this festive season

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CIOL Bureau
New Update

The online market in the US is elated. CNet news.com on November 26 reported

that Amazon.com shares closed Monday up $3.13 to $12.21, a 34 per cent jump and

at Barnes&Noble.com, shares closed Monday up 28 per cent, or 29 cents, to

hit $1.30.

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Gartner researchers predicted $11.86 billion in sales in North America this

holiday season and more than $25 billion worldwide. Last year, e-commerce

holiday sales hit $9.1 billion, according to a Gartner analyst. Many research

firms agree that sales hit more than $9 billion by the Thanksgiving Day.

The mood is no less in India. If the figures are any indication, the B2C

sector is proving all pessimists wrong. Almost all online shops in the country

are reporting 20 per cent rise in transactions in November. This is expected to

touch 60 per cent by January.

Indiatimes, a premier online shopping mall, reported 68,840 unique shoppers

till today, in just five months. It included October-November, the most

happening months in the Indian calendar, where the growth has been 60-70 per

cent. Their expectations are riding higher for December-January, when every

online shopping mall is looking forward to a surge in business. For Indiatimes,

the cumulative e-commerce business has clocked a respectable turnover of Rs 4.2

crore and is slated to touch Rs 8 crore by the fiscal end.

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Compaq’s cooldukaan, an online store, which is not exactly an online

retailer like Indiatimes or Fabmart, and deals only in speciality items like PCs

has alone clocked 25,000 hits last month. Their average hit per month usually is

nearly 15,000.

Says Narasimhan Tupil, country manager - eBusiness, Compaq Computer (India)

Pvt. Ltd., "Given the fact that PC buying is not like usual retail

consumption and falls slightly at the higher level of need, it is remarkable

that we are selling on an average 150 plus units per month with an yield of Rs

60 lakh, this festival season."

He informed CIOL that after launching their "Diwali Dhoom Dhamaka"

bonanza on November 10, they have sold out their entire stock within 10 days.

According to him, Compaq maintained its 11-day delivery timing even in such a

rush. In just one year of business (first anniversary was celebrated in October

15, 2001), cooldukaan has sold 1,600 PCs and registered a revenue of over Rs 6

crore.

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Sifymall had around 15,000 visitors on an average per day in

October-November. "We are targeting it to go up to around 100,000 per day

by the end of January 2002. We had revenues of Rs 40 lakh in October and

estimate it to be around Rs 60 lakh in November," said Vivek Bali,

president, portals, Satyam Infoway Ltd. Their total number of registered users

is around 170,000 at the beginning of November 2001. "We have added around

10,000 new users in the month of October-November, Bali added.

Sifymall had crackers delivered in top 10 cities at "reasonable

rates".

Similarly, Indiainfo (iishop.indiainfo.com), which call

themselves a shop for all shops has reported an increase of 5-7 per cent in

number of buyers during the seasons from an average of 3 to 3.5 per cent.

"We average 1,400 visitors a day onto the shopping section alone, and the

total conversion percentage would be a little higher as we cross promote

products, where a user need not come to the shopping section to complete a

transaction," said Giri Balasubramaniam N, vice president — strategy and

alliances, Indiainfo.com Ltd.

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According to Giri, October 2001 has been 10.3 lakh transactions, November

would be around 12 lakh based on present trends, and expect to touch 16 lakh by

January 2002, as "January is a Sankrati month and our regional channels do

exceptionally well".

Fabmart, often attributed the title Amazon of India, which closed on November

14 a big Diwali shopping bonanza for October-November, is also upbeat this

festival season and expects to touch 150,000 registered shoppers by January

2002. Their total registered shopper base is around 135,000.

Says K Vaitheeswaran, vice president - marketing, Fabmart, "Our revenues

for 2000-01 was Rs 3.2 crore, this we believe makes us the largest e-tailer in

India. For 2001-02, we hope to touch Rs 10 crore. For October-November the

revenue estimate is Rs 1.5 crore."

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While almost all online shopping malls seem to be focusing at the NRIs,

Indian customers too form a sizable number contributing to their revenue. The

main differentiator depend on how effective the marketing reach of each is and

what is the range.

For Sifymall, range of products, multiple payment gateway and wide variety of

partners add to their inline revenue. Says Vivek Bali, "Currently, we have

the largest range of categories and within categories, depth of merchants and

products in online shopping in the country."

For Fabmart, great customer service, excellent merchandise and lots of

special offers act as their differentiator. Says Vaitheeswaran, "We have

been having an online payment gateway and encryption technologies for around two

years now. Our customers have faced no problem with us in this regard. Moreover,

our customer surveys show that over 97 per cent are very happy with us. Our

repeat order ratio is running at around 50 per cent."

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Commenting on Indiainfo’s trump card, Giri says, "We

are a platform for transaction and offer our users a banquet of shopping options

from ‘established players on the Net and otherwise’ thereby increasing their

‘choice set’ and providing them a ‘one stop shop’ option. Being the only

portal major to start in the US and move to India, Indiainfo.com has always been

strong on the NRI segment, which is our primary target audience. The driver for

us is our language editions, which have a very loyal NRI audience and gifting

from this community to loved ones on India is very high."

This festival season, to be different, Indiatimes took the stance of

incentivising the consumer by giving away thousands of free deodrants, CD-roms,

jewellery, pendants etc. with every transaction on its shopping mall. Says

Mahendra Swarup, CEO, Times Internet Ltd., "Our differentiators have been

branded products - be it sweets from Haldirams or greeting cards from Archies or

confectionary from Nestle; wider range of merchandise, unique propositions —naturally

matured Alphonso mangoes was a huge sell out; product bundling, free deliveries,

trust in the brand "indiatimes", multiple formats to communicate and

connect with the consumers etc."

E-commerce players are hoping high for the future. Says

Vaitheeswaran, "The market size is still very small. Our estimate is that

online shopping in 2001-02 will be between Rs 35 crore to Rs 50 crore."

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Swarup expects the market to grow more than 100 per cent in

the next six months.

Narasimhan compares, "The present online business is

like the cellphone business of 1997–beyond the reach of the common people and

not at all cost-effective." But he is optimistic that it will change

drastically and become the cellphone business of today."

Says Bali, "Online shopping has a lot of potential in the Indian

context. The reach of the Internet is still very low, but growing rapidly.

Online shopping mainly offers the benefit of convenience to the browser. Also,

it helps in categories or products where distribution is not extensive. Business

which are able to tap this potential effectively are likely to see order of

magnitude growths in the future."

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