Posts Tagged 'E-Commerce India'

E-Commerce 2.0 – Deal Sites in India and their Future

Over last 2 years one has seen lot of Deal sites come up and be at forefront of the new E-Commerce revolution, to name a few snapdeal.com, dealsandyou.com,sosasta.com(Groupon India venture),mydala, taggle, koovs, bindaasbargain, dealivore among many others.

Many have raised the question on the business model of the deal sites questioning the need for a crowd sourcing/group buying models ability to gather scale in Indian market scenario. From Indian E-commerce successful measurement metrics of doing 1000 transaction/day being a yardstick for a model to survive one sees atleast top 3-4 players already achieving the scale and going strong, though in how much time will they achieve 10,000 transactions per day to become a success is to be seen.  These models requires going hyper-local which means if you are in Delhi, you just dont need deals from South Delhi but actually go upto the level of providing deals in New Friends Colony. While having set that this space will have 2 different models of operations which will emerge out keeping in mind India scenario very similar to OTA space where we will have deal sites similar to Makemytrip.com model (One of my fav Indian E-commerce company) of the world focusing on end to end customer acquisition,servicing and value realization and other will be like Via focusing on being a platform b2b play, both the business models have their own merits and demerits with MMT model shown its worth will wait for Via model to prove its exit value.

While deal sites focus on going hyper local and expanding market beyond the traditional digital advertisers enabling SME’s to use power of Internet to scale customers we have seen lot of new E-commerce players coming in and building businesses using marketing reach of Deal sites.  Which brings us to the next part of the story on how Deal sites are going importance in the overall digital value chain by owning 3 important pieces required to build relevant e-commerce model in india

- E-commerce ready Audience

- Customer service

- Trust

1 out of 5 deals on deal sites being pushed are voucher codes for other e-commerce companies ranging from Letsbuy, HP snpafish to lensmart.com like niche players which shows how Deal sites are becoming an important quadrant in digital media planning and focus need to think e-commerce acquisition strategies around it.  Which proves that deal sites model shouldnt be considered a pure-play e-commerce but one with high media valuation.

In US and UK Voucher code strategies have been core for growth of e-commerce with large media houses running coupon code sites and meta search engines. One believes deal sites can play an important role by becoming a voucher code platform in parallel to deal a day concept which will help them in following ways

i) Generate content which will help improve SEO traffic

ii) Impact Organic traffic with people not satisfied with deal pipeline today still remain regular visitor and this acts like a strong retention strategy.

iii) Deploy parallel media revenue which goes straight to bottom-line and helps improve revenue in capital intensive business.

The deal sites will become central to e-commerce ecosystem as ebay was 3 years ago from where most of the current wave of e-commerce companies validated their business models by setting up ebay stores.  Deal sites are here to stay and there is enough room in market for multiple players.

Interview with CEO of Redbus.in – Online Bus Reservation Platform

Following is an email interview which we did with Pahninder Sama, CEO Red Bus.in. We talked more about the industry they are working in challenges faced and whats their unique positioning in market.Q1. Can you  give us some brief on redbus

redBus is the first player in India to launch the concept of online bus tickets. Today, it is India’s largest such service with the highest number of routes (over 3200) and over 250+ bus operator partners. Consumers get some unparalleled benefits that are unique to redBus:

-         They can book return tickets

-         They can choose their seats

-         They can get tickets home delivery

-         They have access to the best-in-class bus operators

-         They can book tickets over the phone, through their mobile, on the net or in person at our partner outlets.

Q2. Give some background on founders and their experience

redBus was started by 3 friends from BITS Pilani.

Phanindra Sama – Ex Texas Instruments

Charan Padmaraju – Ex Honeywell

Sudhakar Pasupunuri – Ex IBM

 Q3. Why Bus reservation. What is the potential market size in terms of rupee value and how do we segment it.

Bus reservation is a very large market. There is no formal study available to dig statistics. However, approximately the market is pegged at about Rs. 15000 crores. The best way to segment it is geographically, by states. Each state has some busy (priority) routes. One can estimate the market by the number of buses and average load per bus for those routes and add it up to get the state market size.

 Q4. Is this business volume driven or with coming in of luxury buses we will see tour operator using bus as medium also being pushed online

I’m not sure if I understand the second part of this question correctly, but to answer the first – yes it is a volume driven game. Greater volumes change the dynamics of the relationship of the players in this industry.

 Q5. The space at which rail & Air is moving why don’t we see the bus operator segment evolving at same pace.

The bus space is relatively young and you will see it booming in the next few months. We have already started experiencing 30% month-on-month increase and the word-of-mouth will kick start this boom.

 Q6. Keeping in mind low operation standards maintained by smaller bus operators, when you sign them up is their a service level agreement with minimum quality standards being imposed.

We are conscious about the bus operators we tie up with. There have been instances where we have broken our relationship with operators with whom some customers had a bad experience. That’s how serious we are about service levels.

 Q7. What are the main hurdles you face to get scale for your business?

Streamlining the operations with 100s of bus operators throughout the country and building robustness is one of the hurdles to attain immediate scale

Q8. When selecting a bus operator for Delhi-Jammu segment I noticed it threw up 2-3 option with similar fares and originating point. What extra information you tend to provide which can help me to take a decision on bus operator to select as they are not brand names which I have heard of before. Eg data would be performance of operator in terms of number of times bus is running on time and so forth.

We will soon have a discussion forums powered by users. That will give other travelers an idea about experiences of people who have used those bus operators.

 Q9.  Are you looking at other monetization opportunities like advertising as even bigger transaction sites like yatra.com and naukri.com has started to do so and are getting good revenue results.

We surely are. However, that’s not the revenue model of priority right now. We want to master our core business before we can get into maximizing other revenue models.

Q10. What all can we expect in 2008 from Redbus like external integration with travel meta search engines etc.

Of late, some travel meta search engines are showing interest in displaying redBus results. It may come through in sometime.

The market is dynamic and moving at a very fast pace. The operations / offering on redBus.in could be quite different in 2008.

flipkart.com – Fresh Book Store for Indian Market

Binny Bansal the founder of flipkart.com seems to be an intelligent man going around the blog world and leaving trail for people to reach out to his portal. Smart and free way of publicizing your initiative. In the US this is a common PR practice with portals to get blogsphere interested first and then traditional media follows.

Keeping in line with Business India 2.0 blog objective to showcase new developments in Indian webspace here is a review on Flipkart.com an online book store.

For long this space has been seen by lot of VC’s looking at investment in e-commerce india. Though the volumes have not been encouraging + the tax laws of our land are not favorable.  In my earlier post on Retail E-Commerce play in india i had taken a shot at online book stores and how horizontal portals are doing much better jobs moving books instead of people like firstandsecond.com

Flipkart.com comes perfectly in this space trying to get the fundamental rights which is easy to navigate comprehensive database of books to buy. The site scores high on usability though functionality is still limited keeping in mind level which bookstores have evolved in India. The search functionality needs little more work and rather than implementing a generic keyword search it need to weigh in elements of book details, book title etc. Idea is to create a relevancy score which can go up or down based on number of times a book is displayed in results and number of times it receive click based on relevant keyword.

For book portals to involve in India they need to get the book cafe concept going. Idea is to generate content around book topics which forces user to buy books on the topic. Most of the people try to get this going using user generated reviews but this is just not enough.  Create a facebook application track users book liking or even better just track hot topic searches and include them as keyword or cue for people to search for books related to those topics. A tag cloud which is not dependent on input from your search keyword but global search trends or indian search trends. Idea is to entice user to find content which might be already existing in books rather than wasting time on unstructured content on Internet.

The billing process and shopping cart used by site is simple though i didnt like the EBS integration interface as for some reason it slowed down the process.  Still unable to figure out why in india the payment gateways dont allow card details to be captured at merchant end and only processing information sent to payment gateway as this makes batch processing very difficult.

In the end flipkart.com is a good start or showcase for firstandsecond.com,nbcindia.com or other bookstores which went online way to understand when selling books on web how much usability can make different for increasing daily book movement volumes from 500 transactions per day to 1000 transaction.

Lets hope these web 2.0 book stores bring more to traditional  online bookstores which just act as mere catalogs online.


Contact Details

E-mail:siddharthpuri@gmail.com Call Me :+91-9910444460
April 2014
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