Waiting for Godot

BANGALORE: It has been almost two years since Indian consumers started witnessing retailing on the Internet. There are currently tens of Web sites which sell numerous goods. By now these sites have gained confidence and understand the needs and psyche of the Net customers. They now wait for the Cyber Laws to be in place before venturing into selling a wider range of products.

Even as it was found that the Indain consumer is a little hesitant about sharing his/her credit card information over the Web, some sites started delivering goods through the VPP route. The lack of cyber laws and the diffident attitude of the Indians to transact over the Web have resulted in low priced or a smaller range of products being offered by e-commerce sites. Which perhaps is the reason why business-to-business (B2B) sites are doing very well in India as compared to the Business-to-Consumer (B2C) sites. The B2C e-commerce start-ups are at the moment involved in image building exercises, so that once Web transactions catch up in the country they will have customers who will buy from their site.

E-commerce enabled sites in India generally vend flowers, toys, food items, cassettes, CDs, cards, etc., so that the risk of losing huge money is avoided. These sites await the implementation of Cyber laws so that a wider range or high value products can be offered. Fabmart offers CDs and cassettes on its site (www.fabmart.com) and is planning to increase its product range to books, toys, garments and computers, while Homedel (www.homedel.com) offers branded food items and is planning to offer books and music cassettes in future. Eshoppee (www.eshoppee.com ) offers everything to do with computers, audio & video and electronic products.

These service providers have invested quite a bit on their business and are still investing and are expecting to reap the benefits soon. As eshoppee.com director Rama Subramaniam said, "Eshoppee.com has already invested US$3 million and are expecting to spend an additional US$2 million shortly. Based on the encouraging response we have got, we are likely to break even in about a year." Eshoppee is also targeting at a revenue of US $15 million in 2000-01. In setting up Fabmart, the promoters had got a funding of over Rs 5 crore and are likely to break even in three years. Fabmart Vice President K. Vaitheeswaran said, "There are no revenue targets for us in the first year of operations, except that we are targeting 10,000 happy customers who should have shopped with us. Each of these 10,000 happy customers will spread the word to 10 others. We expect a revenue of Rs 45 crore in the third year of our operations." Homedel, which began operations in October, invested about Rs 3 lakh, excluding the office space, and is hoping to break-even in December 2000. "This year we are expecting a revenue of Rs 6 lakh and next year Rs 30 lakh," said Homedel managing director Pritam Shetty.

These e-commerce sites have their own rationale for offering their range of products. Fabmart chose music cassettes and CDs because it satisfied four parameters that were important to them - low value item for a customer to test buy on the Web, no complicated logistics involved, replication of product is possible and the buyer can hear an audio clipping before buying it. It chose only the music category because they want to be the best store in music. According to Mr Subramaniam, "Eshoppee decided on computer and electronic products, because we have found a niche in the area of electronic goods and also found a need wherein the future of software for these products is going to be Web-based. Hence, we feel there is a great opportunity for us to serve our customer in a unique way. We are also planning to deploy Internet enabled mobile agents who can take net access to non-net savvy segment of the population." While according to Mr Shetty of Homedel, "We have our own Web designing centre and so we thought we would set up an e-commerce site to sell food items to those who do not have time to go to the market, mainly bachelors, working couples, and people who party."

Likewise there are other e-commerce-enabled sites that offer similar products. Delhi-based Bababazaar (www.bababazaar.com) sells fruits and vegetables and provides its services in Delhi alone, but is soon planning to set up a wider network in the country. There are sites that offer different services like, Satyam Infoway which has launched www.serwiz.com, a virtual marketplace to buy and sell services. The services covered include medical, engineering, legal, architectural, accounting, payroll, back office operations, insurance claims processing, content development, R&D services, educational services and call centers. Satyam Infoway has offered these services over the Web to set open global markets for Indians in the service industry by providing a virtual link between the service provider and consumer of services. It is also negotiating with 90 odd service providers for the Web site. Well known clothes store Sheetal (www.sheetalindia.com) offers garments, which they claim, are worn by connoisseurs not only in India but internationally as well. The studio designs clothing for a formidable clientele consisting of international fashion models, leading film stars, and pop singers.

Except for Satyam Infoway and Sheetal, other sites have started with a small range of products and are in the process of offering a wider range of products. Perhaps we need to wait and see if everything will go well when the cyber laws are framed. Educating the public of the safety aspects and the advantages of retailing on the Web is the need of the hour. Once people know how this works and how secure it is to transact on the Web, they will definitely realize how much better it is for them to buy on the Web than go to the marketplace. It should be quickly added that this holds true for most of the consumer goods.