India’s Online Retail Saga – A Review
Before going into the details and dissecting the online retail scenario in India I would like To clearly state that “Indian’s do not buy online”. Yes it’s in their nature. They may buy a gift online, they compare prices online and mostly they gather information on their options through internet. Rarely will you find someone choosing the online mode before the various formats of retail India offers. Indian’s do prefer to gift online as it makes their life much simpler. They can avoid the hassles of selecting; packaging and posting the gift through the online channel. Many Indian’s also like to do a brief online research on the products they might like to buy, but eventually they buy it from regular stores. This is very much evident from the fact that Network 18’s comparison site clocks more hits than its E-tailing website. Some leading Indian e-tailing websites have also positioned themselves differently like: Infibeam’s tagline start with “Gifts to India “ , Naptol “Online shopping and price comparison India”.
No surprise that India’s online retail industry is trailing at Rs 1105 crores ($ 0.23 billion) whereas UK’s online retail market stands at a whooping £9 billion($15 billion). Despite of the small size and its seasonal nature (Diwali, New Year, Holi, Rakhi etc ) in Indian online retail we cannot discount it as a niche business. The online retail has seen a 30% increase year on year from the last few years. With India poised to have third largest net users by 2013, the growing economy and worsening traffic conditions; we certainly would have more online purchasers in India. Hence all the largest business houses in India have either entered or are planning to enter the online retail space. We already have Reliance Rmoneymall, Pantaloon’s Futurebazaar.com, Videocon’s eDigiworld.com, Vishalmart’s Vishalmegamart.com and we have Tata coming up with its own e-mall.
Despite of the small market size we have lot of players in this online space due to the small market barriers. Let me cover the top ten Indian retail websites ranked according to daily page views
*Arrived with the help of cubestat.com and alexa.com. Are only indicative and not accurate.
Ebay.in: No wonder that worldwide leader in retail Ebay is doing great in India too. Backed by a powerful brand, loyal customers, and experience in online retail it has generated good traction in India. It came to the Indian scene with a bang by acquiring Baazee.com in june 2004 for Rs 230 cr. Their graph in compete or alexa shows that though they have a large loyal customer base , they are not attracting new visitors. Maybe it’s time to revamp their strategy a little
Flipkart.com: I call it the Indian amazon.com; and what do you know according to their linkedin page ”it was launched in sept 2007 by employees of Amazon.com” . With traffic comparable to that of ebay.in I don’t think they should call themselves a startup. I also came across some good revies about the site in mouthshut.com. The success story of flipkart would require a separate post.
Infibeam.com: I will give a 9/10 to this website on site content and design. They were in news recently when they acquired picsquare. Infybeam’s Car retail section is also a unique in this space which is helping them to gain a lot of eyeballs.
Shopping.rediff.com: Rediff never fails to impress me. Full with Simple and elegant web 2.0 features and the website is seamless. I did actually buy a gift from rediff and the experience was quite satisfying. What they could probably do is to increase their inventory. I think they can do better given that alexa shows only 1.7% of the customers visiting rediff.com visit shopping.rediff.com
Naaptol.com : Positioned as a comparison website, they actually do sell online too. They have multiple revenue sources like advertising, selling online and passing on leads for local stores. The site is very rich on content and the design seems to be flawless. Refined web 2.0 features are also present in the website.
Shopping.indiatimes.com : Give the Times brand and the popularity of the Indiatimes website I personally feel that they can do better. Their homepage is cluttered with a lot of links. They are trying to sell too many things but unfortunately they only have a single homepage. A redesign in the lines of shopping.rediff.com can do wonders to their traffic and profitability.
Indiaplaza.in: Amazingly Indiaplaza which looks so Indian is a company based in US. They were acquired by Fabmall.com and retained the name Indiaplaza. Given their traction and visits I think they can afford a redesign of the website. I find the websites design and features very basic.
Homeshop18.com : Like all other network 18 websites, it has also taken India by storm. Very professionally designed and promoted the website is gaining traction fast. Running on Network 18’s Information network they are a possible player to be watched out in the future.
Futurebazaar.com : A future groups venture though elegantly designed and professionally managed I see declining trends for the website in alexa and compete.com.
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“MBA marketing student at SIBM Bangalore; heart lies in web 2.0. Unfortunately someone is stealing my ideas; as they get implemented before I pen them down. ”
Hey Porush, thats what the internet is all about, it works with lightening fast speed. This is again one of the reason it offers innumerable opportunities to everybody(small or big) out there to take their cues and do something good..
Before closing, can you please tell us, where does you get the figure for online Indian retail industry ?
what will be the future of online retail in india ???
@Ashish Thanks for the comment. The figures have been collected from online tools such as google insights,google trends,cubestat,alexa and compete. These tools may not be accurate individually but combining the results and validating against each other you do get a fairly accurate idea.
@Vikrant Future of online retail is certainly bright as it is bound to grow at a good rate and also provides good margins. The profitability and traction a company generates depends upon how much are they willing to invest in their website and operations. The trend shows that properly designed websites with good web 2.0 features and the sites that give the maximum to their customers are the ones that are successful.
I doubt the margins are that high, considering the low volume, high transaction costs (payment gateway), inventory costs, and the need to be competitive with offline options.
I wouldn’t be surprised that the most profitable areas are the ones like flowers, books and trinklets. Electronics and the like are probably cats and dogs.
Also, I think most people would agree that 30% ecommerce growth in a market like India could potentially be called under-achieving.
@Ni8in : Mostly the players i have mentioned do not have their own inventory , but signup many small retailers who have them. Buy a good from rediff or ebay u will understand what i am talking about.
I am not sure about the margins on different products and on the third point i cannot agree less
Hi Porush,
I m also a MBA Marketing student, 2nd year from Pondicherry University. I agree with your statement that Indians do not purchase online. According to me the reasons behind Indians not shopping online is the fear of payment security, doubt on quality of things displayed, lack of credit card etc. So what can the companies do to overcome this problem?? And also as a student can v do anything, except increasing awareness in Indian mass, so that they can go more online?? Because as far as i feel Internet is future of world…
Hi Porush,
Good post and I would like to add my online shopping experience.
infibeam – Excellent service purchased a book on Sat and delivery received on tuesday.
Same is the case with flipkart.com, nbcindia.com.
However, my exeprience with indiaplaza.in was not satisfactory and I am still awaiting a refund from them. I ordered rakhi to be delivered in usa and they did not execute the order and till date they have not able to find out why? and neither have they given a refund.
My suggestion for online shopping would be first to check whether they have given their physical address, some sites do not give their physical address and it becomes difficult to correspond and return the goods back to them.
As regards, shopping habits, yes, due to security concerns many of them do not shop online, alternatives are available such as
a) some of the sites offer to collect cash on delivery.
b) Buy prepaid intenet shopping cards which I am told some of the Banks have started, not sure which one?
Books are definitely cheaper online but one has to compare between sites some good sites for books are landmark, crosswords, granth, nbcindia, infibeam, flipkart, pustak, kithabay, thestorez etc.
Happy shopping.
Hi Porush,
its a eye wakening to know that many of the indians are prefer not to buy online though they use it for gathering information.perhaps, its owing to the less population who is aware of the internet retail shopping and may be due to the insecure payment procedure. it is well said that the retail sector is booming rapidly and it will grow at the tremendous rate.but, how about the rate of people using the internet for purchasing online?
is adding features through web2. enable the people to drift towards purchasing online?…
With Regards,
Hillang Tasap
2nd year MBA
Pondicherry University
Good blog but can you explain me the future of online retail in india…