An Introduction to  E-Commerce Market in India
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An Introduction to E-Commerce Market in India

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The presentation provides an overview to the e-commerce market in India for budding entrepreneurs. Highlights the areas to focus on.

The presentation provides an overview to the e-commerce market in India for budding entrepreneurs. Highlights the areas to focus on.

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    An Introduction to  E-Commerce Market in India An Introduction to E-Commerce Market in India Presentation Transcript

    • An Introduction to E-CommerceMarket in India by Anirudh Chari
    • E-Commerce Market has evolved from a ‚here-also‛ to a dedicated platform to showcase, promote and sell products over the internet to an audience not limited by geography or store location Broadband penetration Indian companies start to witnesses experiment, new Amazon sudden growth USPS entrepreneurs start online posts first in most Launches e- businesses ever profits markets stamps globally Even traditional players such Backbone of 3G networks by as utsav sarees, Chirag Din, e-commerce Facebook Mobile Google etc. find success in e- formed launched for operators made Launched commerce college operational its beta students version 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 New business models start Acquires emerging globally such asNetscape One of the Ebay Youtube Groupon, etsy, Kaboodle, etc.Launched first large acquires largely oriented to facilitate companies PayPal for iTunes online shopping SSL to reach $1 $1.5 mn becomesEncryption mn in online the largest Mobile commerce witnesses a enabled sales digital spurt backed by growing Online music number of MIDsShopping retailer The roots for social – e- commerce were laid All views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I have not undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 1 resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request any user reproducing the information to contact me before using the same,
    • The e-commerce market in India is currently in its nascent stage and is expected to grow at about 35% CAGR over the next 3-4 years ■ The e-commerce market in India is estimated to be valued E-Commerce Market in India (in INR Crores) at over INR 30,000 Crores and is forecasted to grow at 50,000 46,520 around 35% CAGR over the next 3-4 years 40,000 31,598 ■ The usage pattern, however, has remained quite uniform 30,000 and skewed over the years with services continuing to 19,688 dominate the overall market while others still lag behind. 20,000 14,030 8,146 10,000 ■ Online travel contributes to close to 80% of the total market 0 CY 2007 CY 2008 CY 2009 CY 2010 CY 2011 ■ Financial services market, such as online insurance payments and transactions through trading accounts, grew Travel Non travel Total E-Commerce Industry at an estimated 25% during the one-year period ending Source: IAMAI report on the E-commerce Market in India December, 2010 Components of the E-Commerce Market in India e-tailng, 8% ‒ Comprising 8% of the e-commerce market, this Other Online sector is expected to grow by 34% by 2012 Services, 6% Financial ■ Online retailing contributes to about 8% of the total market. Services, 8% It comprises of buying consumer items such as cameras, Digital computers, home & kitchen appliances, flowers and toys, Downloads, 2% gifts online Online Travel, 76% ‒ This category has grown from about INR 980 crores in year 2007 to over INR 1,500 in year 2009; and is currently valued at about INR 2,200 crores. Source: IAMAI report on the E-commerce Market in IndiaAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 2resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • Backed by a advances in technology, i.e. internet penetration, security, evolving user experience management and cost competitiveness, the e-commerce market is only expected to grow Critical mass of Internet users  100 million Internet users Mobile Internet is a big growth driver  mobile installed base 6x to 8x bigger than PC installed base Rising middle class with disposable income  consumers that are spread across the country are computer literate and also have access to devices from where they can access the internet. Middle class is increasingly turning to e-commerce as the primary outlet for sophisticated consumer products and services Payment gateways & logistics  new breed of domestic logistics companies recognize the importance of reliable delivery and technology investment, and a number of new payment gateway companies such as CC Avenue have sprung up to service the growing e-commerce ecosystem. Alternative payment methods such as net-banking and cash on delivery are now mandatory offerings for leading e-commerce platforms User Experience  Customers prefer a trusted relationship with an e-commerce brand, and the conveniences and reliability of e-commerce businesses have to outweigh the benefits of traditional retail outletsAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 3resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • Business models in the space have evolved across the spectrum, engulfing personalized time-share on every device…Business Traditional E-Commerce Emerging E-CommerceModels E-Retailers - E-Retailers - 3rd Party – Seller Private Sales Daily Deal Mobile Brands Stores Platforms Stores Commerce Push Deals Penny AuctionsService Infrastructure Marketing Companies Execution / Integration Processing / Order FulfillmentProviders All views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I have not undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 4 resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request any user reproducing the information to contact me before using the same,
    • …with convergence as the theme today ■ E-Commerce models are converging as different marketplaces and disruptive business models are springing up and growing fast ‒ amazon’s investment in living social ‒ Groupon rejected offer by Google ‒ GSI Commerce acquisition of Ruelala ■ E-Commerce is no longer only an alternative distribution channel, but a way for brands and merchants to reach out to customers in a targeted manner ‒ Convergence of e-commerce, distribution and services with full-service/marketing ■ E-Commerce is converging with content and social to create strong audience relationships and enable sophisticated audience segmentation and targeting ‒ Higher content engagement, greater content stickiness ‒ Higher consumer yield and consumer lifetime value ‒ Greater audience reach and segmentation through social mechanismsAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 5resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • Friend Centric Social Shopping is fast evolving as a the next big wave, especially backed by the increasing socially connected user bases on social networking sites • They offer deep discounts – up to 90% off – local products, services and events.Group Buying / • The sites are able to offer massive discounts because they rely on group buying – offering local businesses aDaily Deal slew of new customers who all purchase the deal in bulk • E.g.:Groupon, Snapdeal, etc. • People tend to trust peer reviews over corporate advertising. These types of shopping sites usually have a list of products that are rated and reviewed by members of the siteReviews and • This is nothing new – think Amazon – but with the latest social shopping craze, these recommendation sitesRecommendations have really stepped it up: many offer discounts for reviewing a product or points for recommending a purchase to friends and family. • Users log on to a site and either connect with their friends via Facebook or another social network, or inviteReal-Time Online their friends and family via email. They can then shop online at the same time, discussing products andShopping getting each other’s opinion on services. • E.g.: Wet Seal, DoTogether • Amid a relatively new form of commerce comes an even newer way to leverage social technology for consumers: geo-location-based social shopping. Using a geo-location service like Foursquare or Facebook Places, this type of social shopping happens in brick-and-mortar stores. Upon entering, you are usually givenGeo Location some points or are directed to in-store deals from within the geo-location app on your smartphone. Users canBased also look up product information and interact with other shoppers, all via their smartphones. • The points earned can be redeemed for gift certificates at that stores • E.g.: Shopkick, myShopanion • Users are rewarded based on their purchases and on visiting stores (virtual or brick & mortar) which can henceRewards Based be redeemed for later buys.Social Shopping • These are similar to credit card programs and more the users spend the faster they can accumulate the credits • Another major trend in the social shopping experience is combining consumerism with charity. There areCharity-Based several websites and apps that allow users to somehow donate to charity when they shop. This donation isShopping usually either added on as a percentage of the sale, or, more commonly, costs the consumer nothing and instead is given by a sponsor or corporate partner of the social shopping serviceAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 6resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • Hence, it is imperative for an E-Commerce company to develop the right set of capabilities to capture the vast opportunities in the space, including but not limited to managing a users experiences… Moving online store visitors up the relationship ladder provides significant opportunities for growth:  Loyal customers have almost double visit to carts  Loyal customers have almost triple conversion rate  Loyal customers have 10% higher cart value Towards mature decisions Loyal Decision Quality Purchase Interested Aware Unaware Maturity of Decision Free Fall Stage Guess Work Stage Impromptu Stage Imformed Stage  Decisions are not  Decisions are based on  Some decisions are  Decisions are based on consciously made opinions based on facts absolute facts  Actions do not have  Actions have limited  Some Actions  Actions have consistancy consistancy consistancy consistancy  Daily happenings direct  Personal motivations  Facts direct some parts  Facts direct business business direct business of business  Key factor for success is  Key factor for success is  Key factor for success is  Key factor for success is accuracy luck experience focusAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 7resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • …and effectively using the data collected is imperative to business successFocus Area Objective Sample KPI’s Guidelines  Use search engine optimization using traffic Attract different types of  # of Visits per Month Insights visitors to site using alternative  Unique Visitor Count per MonthVisits to the  Utilize variety of acquisition Channels channels and approaches,  Advertising Cost per Visitorplatform  Customize acquisition approach by prospect providing differentiating value  % of Visitors Bookmarked Site Segment add  Page Rank of Homepage  Provide additional reasons for visiting site  Subscriber / Visitor Ratio  Call to action for subscription on landing Page Motivate subscription at first  Total Unique Subscriber CountSubscription  Make subscription fast and Convenient sight, providing additional value  Number of Subscriptions per Monthof visitors  Provide immediate value add for Subscription add and good first impression  % of Subscribers with Full Data  Promote competitive value Propositions  Duration From Visit to Subscription  # of Items Viewed per Visit Make items of interest easily  Use effective and alternative categories for itemsCreating  # of Items Viewed per Subscriber accessible and pro-actively  Pro-actively recommend Itemsinterest in  % of Subscribers Viewing Items communicate relevant  Provide ability to search with alternate meansitems  # of Categories Viewed per Subs. information on merchandise  Provide creative and instructive item views  % of Items Not Viewed for Long Time Avoid abandonment of added  % of Item Adds Abandoned  Provide one click check-OutCreating items  % of Item Adds Removed  Make single item purchase fastercustomer providing convenient transition  % of Cart Value Proceeded to Checkout  Cross-sell before check-outloyalty to check-  Average Item Time in Cart  Make added items accessible even if abandoned out and following up  Average Time to Checkout Site  % of Check-outs Abandoned  Provide convenience and speed in Checkout Ensure completion of check-out  % of Potential Value AbandonedReduce Cart  Remind and follow up abandoned Cart with convenient processes and  % of Abandoned Carts Purchased LaterAbandonment  Motivate abandoned cart purchase with benefits cart follow-up  % of Abandonment to Competitor Site  Make cart available in next visit if abandoned  % of Subscribers with Abandoned CartsAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 8resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • …and thereby, increasing sales, time spent and valuation of the platformFocus Area Objective Sample KPI’s Guidelines  % of Payments Bounced  Provide alternative payment modesStreamline Process payment securely  % of Potential Value Bounced  Ensure and promote payment SecurityPayment and using alternative  % of Bounced Payments Abandoned  Keep customers informed about payment Processprocesses means  Payment Attempts per Purchase  Follow-up and recover failed Payments  Number of Fraudulent Cases Identified  % of Subscribers with 2 Purchases Identify and motivate non-  Regularly provide new content and OfferingsPromote re-  % of Subscribers with >2 Purchases returning customers  Pro-actively take actions for dormant Visitorsvisit and re-  % of Subscribers with >1 Visit providing additional  Provide value add for repeat Businesspurchase  % of High Value Loyalists information and value add  Recommend for cross and up-sales  % of Subscribers with Returned Goods  Develop a rating scale for products Identify and promote the  % of subscribers liking productsPromote  Enable users to share the products either on the social aspects of the e-  % of subscribers recommending productssocial aspects same platform or other platforms commerce platform to  % subscribers commenting on productson the  Motivate users to become prosumers by providing increase sales and  % subscribers visiting other platforms fromplatform additional value to them – brand ambassador valuation ours for comparison programsIncreaseinteractivity –  Provide sellers with information on consumers for Promote businesses as  % comments and replies on productsbuyer – seller, targeted marketing well as business for the  % sellers responding to user queriesseller-seller  Provide interaction session off-line to promote members on the platform  # of comments on blogs and responsesand buyer- interactivity between buyers and sellersbuyerHence, E-Commerce performance management, through effective strategies and tactics across customerlifecycle is imperativeAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 9resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • The key success factors
    • The key success factors for a start-up ecommerce platform ` Procurement and deciding on what to sell How’ and User ‘when’ a product is Interface Design delivered Key Success Factors Product Conversion Recommend ation Rate Personalizati on and Product Recommend ationAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 11resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 1 A viewpoint on ‘What to Sell’ – Deciding on product categories that is amenable to be moved to the online space and thereby developing a niche for the e-commerce platform decides its success While targeting a large user-base is important, developing a niche product portfolio is essential to developing a brand image. A new start-up can focus on one or a mix of the following to develop their own brand image in the market Options What it means to the e-commerce platform • Developing relations with large brands offering them scale and in turn seeking discounts that can be passed on to the consumers Luxury products at a • Constantly negotiating with the product / brand owner for better deals against larger volumes unbelievable discounts • Constantly finding new brands to be showcased on the platform • Maintaining product delivery time agreed with the customer as well as the product originator/aggregator • Sourcing a niche portfolio of products from other geography/ market such that it is cost effective for the Niche products not available in users the geography/market • Maintaining product delivery time agreed with the customer as well as the product originator/aggregator • Dealing with regulatory nuances in the local market for the product • This can entail developing a large distribution network for delivering day-to-day products to the customers at Making day-to-day products given times available – convenience and • Sourcing the products on time each time price • Negotiating based on volumes, product portfolio and exclusivity in the region of presence Linked to a larger cause • Sourcing products that are linked to a larger ‘cult’ or ‘cause’ or ‘aspiration’ in the domestic market • All large retailers and aggregators can avail of this opportunity through tie-ups with regional logistics vendors Large offline scale being to have an online presence as well as a means of value added service to the customers exploited online • Products unavailable in the store can be added to wish-lists and sent to the customers to offer additional value and maintain loyaltyAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 12resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 2 A viewpoint on User Interface Design – entrepreneurs often get influenced by the ‚complexities‛ of their business and begin designing the experience for exceptions that only apply to 5-10% of visitor… While user experience is critical to success on all types of websites, it is especially critical for ecommerce websites given that visitors purchase decisions are linked to the aesthetics to the website. A poor user experience will result in loss in sales Below are some examples of what I consider are aesthetically designed user interfaces Other examples of well designed e-commerce websites include 1. DesignCode 2. Shoe Guru 3. J.Crew 4. Nestliving Abercrombie & Fitch Crate & Barrel TOOBYDOO 5. Naked & Angry 6. Hard Graft 7. Hard Graft 8. Crate and Barrel’s 9. Armani Exchange 10. …. Apple Ann Taylor Russell & MacKennaAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 13resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 2 …in other words, a shop should give an average user the feel ‘special’, ‘pampered’ and ‘motivated to buy’, alongside subconsciously inducing ‘trust’ Identified below are some of the specific factors that are generally present on well-designed e-commerce websites… Design Aspect Why its important? Navigation • E-commerce sites often face considerable challenges with navigation because of the number of products that are presented on the ‚Design for the site dumbest and • Large sites, such as those of department stores, have to be especially careful with navigation, because finding what the user learned will wants will usually become increasingly difficult with more options appreciate!‛ • One factor to consider is how the average visitor will attempt to find a particular product • Sufficient user testing is extremely helpful for identifying potential navigational issues Product should • A design that is extravagant for no legitimate reason will do more harm than good, it will draw attention to the design of the site overpower Design and away from the products • The focus of design should be on the product rather than on making the website a ‚piece of art‛ Focus on Check- • If the checkout process involves too many steps or is confusing, shoppers will wind up abandoning their cart with items left out unpurchased • Ideally, check-out should involve a minimal amount of steps and should be as easy as possible for shoppers • Processing time is another aspect that should be taken care Design to match • When designing an e-commerce site it’s important to consider the style of the products that will be available on the site the product • If the design style does not match well with the particular products that are for sale, there will be a disconnect that exists and visitors may have a hard time relating to products and determining if it is right for them. Showcase what is • Showcase the popular products rather than forcing products on to the shoppers relevant • A number of sites are using a large area on the homepage that they can use to promote current sales, new product lines, or whatever will generate interest • On theses sites, this area will often be updated frequently, or it may include some type of slideshow. Promote related • Promoting the right products that buyers are likely to be interested in is key regardless of the approach that is used products Photos – who • Selling online is different than selling in a physical store because the buyer cannot touch the product or see it in person before wants to see making a buying decision unclear photos? • Providing quality photos that accurately portray the product can help to overcome this challenge and can make the buying decision easier on visitorsAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 14resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 3 A viewpoint on Increasing Conversion Rate – traffic is not the best metric to judge an e- commerce platform, instead, conversion rate is the metric new entrepreneurs should worry about In the virtual world - online conversions can come in many forms. If you’re selling a product online conversion happens when a visitor makes a purchase and becomes an active customer, and if you’re offering a service your conversion might be getting visitors to phone-in  Unless the USPs are copied across the site, a they might never be seen so make sure your USPs are visible across the site1 2 3 Agility to Flaunt your Be open to  Constantly look at additional communication channels such as online price USP criticism chat, Voice Over IP providers such as Skype and online feedback forms variations to ensure you cater for enough visitors as open communication can help increase your credibility  80% of customers research before committing to buy – hence while comparing and adjusting your prices, look at the overall price to the customer also taking into account any shipping fees and taxes4 5 6 Mirror Your Widen Widen  Employ multi-channel coherent marketing to promote your products and Offers on all Product Portfolio of services channels Portfolio offers  Always be on the lookout for new opportunities and closely follow customer trends and taste – Analyze, Analyze and Analyze  To become an appealing proposition, consider catering to as many customer groups as possible by diversifying your product offersAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 15resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 4 A viewpoint on Personalization and Product Recommendation – Move away from a product centric model to a customer centric model Converse with your customer… …to understand their needs… …their aspirations… …but don’t force your thoughts onto …and trust on the backend numbers… …to reward them… your customers, let them choose what they wantAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 16resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 4 A viewpoint on Product Recommendation – give the users the power to identify, recommend and vote ‚aggregate wisdom‛ Capturing and utilizing the wisdom of the masses to pro-actively cater to their needs. Design Aspect Why its important? Top Rated • Visitors are recommended products based upon the ratings received from other customers. Products • The products that receive highest aggregated ratings in any given category or sub category start appearing as recommendations for visitors when they visit those categories or subcategories • Some e-tailers have actually started adding more predictive attributes in the ratings, to help other individuals make better decisions. Collaborative • A highly advanced algorithm does statistical match across different product combinations – and the recommendations are made filtering purely based upon the affinities across various products • The good thing about collaborative filtering is that it minimizes the level of manual involvement from category managers and automatically finds patterns of product combinations based upon aggregate purchase behavior • This is what powers ‚People who purchased this product also purchased….‛ type of recommendations at Amazon • Although these type of recommendations require a relatively high implementation cost, they minimize the need for setting up manual business rules and can run on a ‚Auto pilot‛ mode to some extent • Though the biggest downside with collaborative filtering recommendations is that they tend to produce ‚Averaging effects‛ which causes the overall most popular items to be recommended more often which means that they will be consumed and rated more frequently as a result Expert’s voice • Although it is good to see statistically relevant recommendations based upon a democratic way of collecting insights, humans by Humans need a nature would take recommendations more seriously if they are coming either from experts in the category or from other individuals human touch… who have similar tastes • For example, a serious audiophile visiting bestbuy.com may not be interested in the best selling home theater systems on the site • The true power of online recommendations is where customers are able to get advice and recommendations from others like them – who they can trust more than the average crowdAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 17resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 5 A viewpoint on Securing the Payment Channel – Assurance and trust are key to repeat purchases All online retailers are concerned about minimizing charge-backs and payment fraud. This is one of those costs that can be minimized if appropriate and proactive steps are taken An e-commerce platform faces the following  Unless the USPs are copied across the site, a they might never be seen security threats… so make sure your USPs are visible across the site  Constantly look at additional communication channels such as online chat, Voice Over IP providers such as Skype and online feedback forms to ensure you cater for enough visitors as open communication can help1 2 3 increase your credibility Securing Securing Securing connections the your own with your payment  80% of customers research before committing to buy – hence while servers users channel comparing and adjusting your prices, look at the overall price to the customer also taking into account any shipping fees and taxes  Employ multi-channel coherent marketing to promote your products and services  Always be on the lookout for new opportunities and closely follow customer trends and taste – Analyze, Analyze and Analyze  To become an appealing proposition, consider catering to as many customer groups as possible by diversifying your product offersAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 18resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • 6 A viewpoint on Delivery – ‘How’ and ‘when’ a product is delivered can decide the fate of a platform A developed and integrated logistics set-up is key to assuring and ensuring repeat business. Differentiation in terms of product packaging and delivery provide the users the assurance Challenges ahead an e-commerce start-up…  Giving the user the option to set delivery date and time can be make customers feel ‘special’1 2 3  How a package is received at the door-step and how the customer is Options on greeted has a long term impact on sales On-time informed Packaging delivery delivery  ‚People don’t like to wait‛, hence delivering the product on-time in the best condition possible will influence loyalty as well as increase customer base  Customer is king and why should the customer pay for a damaged product? INSURE the product that is sent to the customer and tell4 5 6 them that you are doing them a favor,  Who wants a product that doesn’t look and feel like, what it seemed on Insurance Return Manage the platform? Give the users the option to return the product in case on products Policy Costs they don’t like it. This way a consumer’s confidence on the platform increases  All the above cost money, and hence it becomes integral to identify the best suited solution to the problem at handAll views and opinions in this document are personal and / or have been gathered based on extensive research in the sector and personal interest. All data points have been collected through secondary research, informal industry contacts and I havenot undertaken any additional work to establish the reliability of the sources or to evidence independence of the relevant source. Furthermore, collection of data for market assessment has been limited to such information as can be collected from 19resources on the published public domain and meetings with market participants. Wherever sufficient information was not avai lable in the public domain, suitable assumptions were made to extrapolate values for the same. Hence, would request anyuser reproducing the information to contact me before using the same,
    • Anirudh Chari Working as a management consultant, for over 4 years I have had the opportunity to work on several projects for Indian and International clients in the areas of Strategy Formulation, Validation & Implementation, Business Planning, Entry & Expansion Strategy, Feasibility studies & Location Advisory and Market Assessment. This entailed, advising several companies across sectors, such as, Telecom, Media & Entertainment, Mobile Value Added Services, Information Technology, Infrastructure & Financial Services, Real Estate, Manufacturing, etc. My technical background & my management degree from IE Business School have not only provided me leverage while assisting my clients during project delivery, but also while pitching for new assignments and cross selling theanirudh.chari@gmail.com services of the firm.anirudh_chari@yahoo.com+91 91360 11000 I have also been involved in a few start-ups and entrepreneurial ventures over+91 99102 61161 the past years that failed. The most recent venture was an online commerce platform with a unique social value proposition. The other ventures have been ina.chari the power sector and second-hand auto retailing.