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.
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.
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.
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.
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."
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."
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."
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."