When we talk about the India growth story, one cannot forget E-Commerce. Attend any startup event – especially in 2011 and you’ll find quite a few entrepreneurs or enthusiasts working upon a so-called niche E-Commerce product for India.
We all know that not many of the old companies of the late nineties survived in the 21st century. I saw a similar Ecommerce craze in around 4-5 years back as well. While online buying has seen a huge surge, thanks to better internet penetration, ease of use and more trusted providers in the game, the prime question everyone is asking about is – Are we really ready for Ecommerce now? What do the numbers say? For most corporations and investors alike, especially in internet space, a 3 to 5 year break even point is either not viable or acceptable.
To add my two cents to the debate – I’d say people in India shop online for 3 primary reasons in the following order – bargain deals, better range of products and ease of use. Snapdeal and a lot of other deal ventures are doing a great job sourcing the right deals to the consumers. Whether the companies themselves are making money is another point of discussion – but the consumer surely gets an incentive to buy online / offline.
With open source technology options around, starting up an E-Commerce venture has become relatively easy – especially from technology perspective. That makes trying out ideas a little easier as well. And I think that has led to quite a few entrepreneurs jump on the bandwagon – just to realize that starting a website and running a business are two different things.
E-Commerce is highly capital intensive and risky, especially in India. Logistics and supply chain, payments, taxation and law operations in India are quite different than in the other countries. The prime thing is an E-Commerce business requires is consumer ‘TRUST’ – and with so many variables in the business, one surely needs a lot of commitment and dedication to build his own successful model.
Entrepreneurs with experience in the US and UK might need to unlearn a lot of things before they can successfully venture into India. That being said, having a niche category is very important. With limited funds at disposal, it is very important that one concentrates on a particular category and get foothold in that before trying out other ones. Trying to supply everything to everyone is a sure shot way to failure – yes, this does not apply to Amazon or eBay but to most of us.
All said and done, a lot of things have changed over the past decade. While changes in eCommerce scenario can be a book in itself, let me mention a few points:
- Internet speed and availability has greatly improved
- Yes, the number of internet and E-Commerce users have increased phenomenally as well
- People are now comfortable making payments online
- Logistics have fairly improved – though there’s a lot of room for more improvement
- The disposable incomes of middle class people – especially in Tier 2 and Tier 3 cities have improved. People in these cities do not have access to all branded products and that’s what is making them buy online
- The technology has also improved over years. There’s a lot of research already available on user experience, payment handling and more – easily available to entrepreneurs
- Integration of mobile devices to the pure play platform
For entrepreneurs, there was never a right time to plunge into an E-Commerce venture than NOW – however, as a word simple advice, make sure you are adequately capitalized, have a specific lesser crowded niche to venture into and have a right team with you !
After all, even if you make a 100 million $ turnover, the prime question applicable to all businesses still remains – Is your E-Commerce venture really making money?






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