Archive for the 'E-Commerce' Category

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.

M-Commerce India – The Future & Challenges faced!!

For last couple of days have been doing lot of research on M-Commerce Models in India and lot of people have come to my rescue in making me understand perils imposed by government regulations restricting growth of e-commerce in india through mobile medium.

Best to my understanding all the existing M-Commerce model been adopted by players like M-Check, Obopay, Paymate etc require user to map a banking instrument like credit card, debit card, bank account etc to their mobile phone account and via an application installed on phone or through the provider concentrate on making payment instrument mobile enabled.

Although its a big leap from security point of you enabling people to start paying via the mobile phone WAP,SMS medium for various merchant services available though still such services have not reached a critical stage due to lot of factors like non-tie up with all the banks or people still not comfortable sharing credit/debit card account information etc.

Trying to understand with such stringent norms coming through TRAI guidelines making its mandatory to identify customers which are as stringent as required to open an saving account and get a debit card, it made me wonder telecom companies with their access and reach are in the best for forward integration into becoming a bank then other way around. If today i using my mobile phone account could start paying at merchants like credit cards or using pre-paid cards start buying stuff like vegetables etc, my bank usage for daily transaction would reduce significantly.

I am sure it may make you think why are people at telecom companies doing same though biggest barrier understood from various experts is the TRAI license fees calculation system which is approx 6% of annual gross revenue. So until unless you register as VAS provider with operator and clearly revenue parted is shown in books it will be still counted as net reciept revenue making the commerce business unviable as merchants wont be ready to pay for transactions around 7-8% where banks are charging between 2-4%.

Compliance to RBI banking norms is much simpler task for such telecom companies for handling banking, fraud transactions but the biggest barrier imposed by TRAI in terms of license fees need to be cleared.

The way around for now is to build MVAS application which can be charged to user account on service or tangible asset delivered for consumption on mobile device then its workable.  The TRAI Guideline paper(linked) actually doesn’t restrict telecom companies to use their platform to accept payments as when you clearly read 2.1.3(iv) it clearly states in case of M-commerce one needs to adhere to RBI guidelines where ever necessary and if you goto RBI guidelines(linked) it states clearly that these guidelines are for “BANKS” for dealing with customers via mobile as a medium, this still doesnt govern the telecom companies.

I  am talking to lot of telecom’s to get their views on same and will do a follow up post if see some success.

Top 10 Finance portals in India – My favourite for Equity Research and Stock Movement Tracking

Top 10 list column is getting lot of page views with readership going up by 20% post adding category.

Today’s top 10 list look at 10 finance sites in India which i believe covers the best information required for equity research, keeping track of secondary markets and financial securities sector. Again in no order

1. Sharekhan.com – official online trading platform for Sharekhan securities one of the most efficient online trading platform with non clutter view to information. Their ability to keep non-sharekhan demat account holders engaged with content is highy appreciable.

2. Myiris.com – Started in pre-moneycontrol day when CNBC was still not the default financial market tracking channel. Excellent qualityof research and clean design keeps me bringing back.  Peers and CXO level audience in Enterprise 2000 and SMB’s have mentioned site as alternate channel to their existing online DEMAT account provider.

3. Moneycontrol.com – Most exposed financial site in India with content syndicated from Network 18 group.  Used to be one of my favourite site when they changed the way financial sites are to be used with web 2.0 tools which improved quality of research done and reduced effective time spent. For some reason lack of product innovation and repeative content from what i see on TV has some what weaned me away.

4. Indiainfoline.com – Another great online demat account company with great content exposed online without logging in again another site which has stopped evolving on product front but quality of content still ensures traction.

5. Valueresearchonline.com – Site has recently gone through a revamp and focus on mutual fund content has brought more interest from financial analyst community. The sites is targeted for more advanced audience which understand various investment instruments instead of amateurs looking for stock movements.

6.Valuenotes.com – Specific focus on Company Research Reports and very strong editorial content leads to high ranking among CFO audience. Biggest advantage this site carries is 70% repeat visitor rate due to high user conversion ratio into premium paid members.

7.Rediff.com/Stocks Section – My favourite Personal Finance tool site. I seriously love the stock hot or not barometer implemented. also ability to see historic movement of stock.

8.Taxindiaonline.com – Comphrensive guide on Taxation Rules & Law, This site is again big refernce point for CFO’s of today and their ablity to remain most updated in sync with Indian Tax Department notifications have got them high subscriber base even from Government departments.

9. InsuranceMall.in – Insurance Comparision engine – one of the early starters in the online space with well established finance company like Bonsai behind it.

10.  Apnaloan.com –  Not a big fan of the site due to lack of information on a self serve model.

TOP 10 Payment Gateway India – New Column on 10 things in no ranking order

After being on horizon with long posts which offered detailed explanations etc had been trying ways to look at daily blogging which wouldnt take much time and will also ensure twitter reader friendly posts 🙂

These posts shouldnt require much time and can be pieces of information which were there in mind but just needed penning down or something have been researching.

The first post will be on my favourite space ” Payment Gateways available for your sites in India ” and my 2 cents on same

1 .ICICI Bank Payseal Payment Gateway

Wouldnt recommend to anyone just on the pure customer service and lack of understanding on sensitivity required or processes companies utilizing payment gateway have. Detailed post available

2. Citibank Payment Gateway

Mix Reaction to their services as offline merchants are not the happy lot but online customers do complain about the time interface provided.

3. HDFC Payment Gateway

Traditional bank looking at adding traditional merchant clients – looks like not a core-service for them

4. AXIS (UTI Bank) Payment Gateway

After long time enjoying great customer service as their platform partner is good with technology and bank is very active on customer net turnover less than 5 crores through payment gateway

5. ABCPayments

No feedback available but its an Inter mesh corporation the company behind Indiamart.com

6. CC Avenues

Inability to accept Master card and higher transaction fees charges to customer is a detterent.Too many complains to even add on a post though very small merchants <1L Rs every year are very happy.

7. Paypal

International payment gateway not ideal for indian merchants due to lot of charges or fees paid in getting money into own account and loss due to currency fluctuation.

8. Transecute

No feedback available

9. EBS

Reseller model similar to CCAvenues but better they deal with banks and provide easy to use interface for SME’s

10. Had no one worth mentioning so self promotion as one stop consultant for payment gateway solutions

Hotel Owner guide to accepting customer booking online

For last 6-8 months have meet lot of small hotel/guest house property owners interested in starting to accepting customer bookings online for their property. In terms of options available there are lot of hotel management software which are basically property management software which not only takes care of online customer booking but other things like staff regulation, property maintenance, billing etc. Though what hotel owners are really looking for is very primary very basic something which allows them to daily update their available inventory online and accept customer bookings for same.

If you are one of those same hotel owners just looking for very basic and functional way to convert customers coming on your website. Then you need not to be worried about investing in something fancy like a property management software. What you are looking for is Payment gateway services which are offered by Banks like Axis, HDFC,ICICI,Citibank in India enabling you to accept master card,visa etc.

Kind of payment gateway you should select is dependent on kind of target customers for your product. If your property is based out of a destination which attract higher propotion of Domestic Travellers instead of international then you shoud look at have payment methods visa,master card and others like Debit Cards, Net Banking as other payment modes for booking and reservations.

If you are looking to attract international tourists then simple Master Card, Visa and American Express should be certain choice of pay mode acceptance.

Once you have defined the payment modes which you would accept one needs to go into details of transaction fees which these banks will charge on each transaction and also monthly or annual fees one need to pay for maintaining such services on ones website. Generally these payment gateway fees can vary between 2-10% dependent on volume and number of payment acceptance modes selected. Ideally one should not go for more than 7% transaction fees and avoid using international payment gateway services like Paypal etc due to higher transaction fees one needs to shed for transfering amount deposited with them in your name to local bank and effect of money loss due to currency fluctuations.

Once you have selected payment gateway then you need a shopping cart or booking reservation engine to which the payment gateway would be integrating here again providers like CC Avenue have payment gateway enabled hotel reservation software called resavenue which at a monthly fees and higher transaction fees offer its software on pay as you use model. Though this can be a good startup option i personally recommend spending 15-25,000 INR as one time setup fees to buy the software and negotiate on lower per transaction fees with the gateway provider which on good negotiation can be brought down easily below 5%.   Which if your hotel is able to do 20-30% of its business from online booking then cost of software upfront is recovered within 10-14 months depending on size of property or number of rooms.

Once through with accepting bookings online the next stage is for monitoring those bookings and updating on daily basis room status. There are payment gateway service providers which will be ready to take this up for you and would suggest smaller hotels to use their services for inital 6-8 months till the time website is stabilized.

If you need help in selecting provider just leave comment on post and will try to help you in whatever way possible in selecting the right provider for your property.

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
July 2017
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