What it takes to do online retail in india

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Slides from my Barcamp talk.

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  • Good insights. Flipkart has stuck with the obvious in 'dhanda' which is actually very difficult to execute as most of the failed startups can vouch.
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What it takes to do online retail in india

  1. What does it take to do eCommerce in India? Mekin Maheshwari
  2. Changing buying behaviour for 100M people <ul><ul><li>- Customer delight is a survival strategy </li></ul></ul><ul><ul><li>- Your partners not being good enough is YOUR fault </li></ul></ul><ul><ul><li>> Suppliers </li></ul></ul><ul><ul><li>> Payment gateways </li></ul></ul><ul><ul><li>> Couriers </li></ul></ul><ul><ul><li>- Be willing to do a LOT more than what offline retailers do </li></ul></ul><ul><ul><li>> more than what other online services do </li></ul></ul>
  3. Order Lifecycle <ul><ul><li>- Attract users to the site </li></ul></ul><ul><ul><ul><li>Family, Friends, SEO, SEM,WoM, Brand Building </li></ul></ul></ul><ul><ul><li>- Provide selection </li></ul></ul><ul><ul><ul><li>Make it easy to Find & Discover products </li></ul></ul></ul><ul><ul><li>- Provide details to evaluate a product </li></ul></ul><ul><ul><ul><li>Description, Specifications, UGC </li></ul></ul></ul><ul><ul><li>- Price well </li></ul></ul><ul><ul><ul><li>Have to be competitive to the most obvious options </li></ul></ul></ul><ul><ul><li>- Provide convenient payment options </li></ul></ul><ul><ul><ul><li>Online, COD </li></ul></ul></ul><ul><ul><li>- Confirm payment </li></ul></ul><ul><ul><ul><li>Most people think eCommerce ends here! </li></ul></ul></ul>
  4. Order Lifecycle (contd.) <ul><ul><li>- Get the item </li></ul></ul><ul><ul><ul><li>Procure from Supplier (Just-in-time) (Supplier selection) </li></ul></ul></ul><ul><ul><ul><li>Keep Inventory (Inventory Prediction, Planning) </li></ul></ul></ul><ul><ul><li>- Clean & Check for sanity </li></ul></ul><ul><ul><ul><li>Pages missing, MRP printed lesser than told to you </li></ul></ul></ul><ul><ul><li>- Pack the item </li></ul></ul><ul><ul><ul><li>Tamper proof, weather proof, breakage proof </li></ul></ul></ul><ul><ul><li>- Select courier & hand-over </li></ul></ul><ul><ul><ul><li>Courier performances vary across regions a LOT </li></ul></ul></ul><ul><ul><li>- Get tracking id & communicate to customer </li></ul></ul><ul><ul><ul><li>Follow-up for timely delivery </li></ul></ul></ul><ul><ul><li>- Take care of returns (faulty product/user changes their mind) </li></ul></ul><ul><ul><ul><li>Minimize returns </li></ul></ul></ul>
  5. This is dhanda <ul><ul><li>- No glamour – this is dhanda and very traditional at that </li></ul></ul><ul><ul><li>- Your competition is on SP road and Chandni Chowk </li></ul></ul><ul><ul><li>- Dealing with suppliers: </li></ul></ul><ul><ul><li>> Signing agreements with suppliers </li></ul></ul><ul><ul><li>> getting them to share data feeds </li></ul></ul><ul><ul><li>> getting them to fulfill your orders </li></ul></ul><ul><ul><li>- Dealing with Payment Gateways </li></ul></ul><ul><ul><li>- Setting up & operating large warehouses </li></ul></ul><ul><ul><li>- Dealing with Couriers </li></ul></ul><ul><ul><li>- These organizations & people work very differently from tech </li></ul></ul><ul><ul><li>- People may not be as forthright & honest </li></ul></ul><ul><ul><li>- SLAs mean little (till you achieve scale) </li></ul></ul>
  6. Do this for the long run <ul><li>- Very low margins (You need high volumes) </li></ul><ul><li>> Amazon Nett Profit of $1.1B* on Revenues of $34B </li></ul><ul><li>> Google Nett Profit of $8.5B on Revenues of $29B </li></ul><ul><li>> Infosys Nett Profit of $1.5B on Revenues of $6B </li></ul><ul><li>- Profitability takes a lot of time </li></ul><ul><li>> Amazon turned in minimal profits in Q4 2001 (7 th year) </li></ul><ul><li>- But then this is what all other businesses run around </li></ul><ul><ul><li>> P/E ratio: Infy 24.5 ; Goog 20.1; Amzn 82.2 </li></ul></ul>* All numbers are for the year 2010
  7. Some things that have worked for Flipkart <ul><li>- Customer first. </li></ul><ul><li>- Cash On Delivery </li></ul><ul><li>- Logistics is a menacing challenge: Our own Logistics </li></ul><ul><li>- Depth in a category before breadth in categories </li></ul><ul><li>- Service, before Marketing </li></ul><ul><li>- Investing in Technology </li></ul>
  8. Questions/Comments/Discussion.

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