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| June 5, 2000 | ||
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| NET
SHOPPING
Bull in the Cyber Shop The flowers and sweets you ordered take weeks to come, e-tailers are finding it hard to deliver. By Sheela Raval
According to NASSCOM, an association of software companies in India, there are about 70 sites offering online shopping facilities in India. While some of these sites deliver merchandise anywhere in India (rediff.com, satyamonline.com, fabmart.com, indishop.com), others cater to a limited area (bababazar.com in Delhi, subhikhsa.com in Chennai, uphaar.com in Mumbai). Says Rediff CEO Ajit Balakrishan: "e-tailing is a growing phenomenon, which is bringing about a shift from high-priced to standardised products." No sweat at all. That's what financial consultant Pratima Shrivastava thought too. But one brush with cyber shopping and she is bristling with caveats. "Net shopping is not as hassle-free as it is made out to be. What you are promised is completely different from what you actually experience." Last month, Shrivastava logged on to rediff.com and selected a book. The site took her to a membership form which she filled up. Then came the "terms and conditions". Shrivastava read them and then clicked on "back", only to find that all the information she had filled in was gone. She filled in the form again but it was not accepted. Her user name was "incomplete" the site said and told her to use an alphanumeric phrase -- something that was not mentioned earlier. When she finally managed to submit the form, the site informed her that her location (Delhi) was not serviced by courier and her order would be sent by registered post. But the form had only six digits of her pin code. Worse, she couldn't make changes in the form. Exasperated, she cancelled the order. Is this the revolution that sundry
dotcoms have been tom-toming? It seems the growth of cyber commerce in
India has missed the target by miles. Statistics provide a comforting,
even though erroneous picture: e-shopping in the country grew by more than
three times in value terms last year, from Rs 12 crore 1998-99 to Rs 50
crore in 1999-2000. That's a healthy rise but still a measly 1 per cent of
the total retail turnover. According to the Boston Consulting Group, per
capita online retail revenue in India is less than 70 paise. Compare that
with $2.3 (Rs 101) in China and $20 (Rs 880) in Australia. Indian
consumers usually buy low-value products on the Net and most e-shopping is
restricted to music, cards, flowers and books. There are many reasons why Indians are not clicking on those "buy" icons. The Indian consumer prefers to pick up provisions from the neighbourhood store; he wants to touch and feel the clothes he is buying; he wants to try out an appliance before buying; and he is not very conversant with technology. Says Viraj Sawant, director of DBS Internet Services: "Technophobia, very low penetration of credit cards and a lack of popularity of debit cards might make e-tailing an uphill task." These aren't the only sluice gates holding back the flood of e-tailing in India. Sites are found wanting in key areas like logistics and distribution. India Today ordered flowers for an ailing staffer on satyamonline.com. The order was confirmed the next day but the flowers never reached its destination. Nevertheless, the billing part of the transaction was efficiently completed and Rs 299 debited to the credit card. Strangely, the onus of recovering the money or cancelling the transaction lies with the customer. Making things worse for the consumer is the fact that the Net is still an uncontrolled territory. Rules governing e-tailing are yet to be framed so there's no guarantee that a cybershop will stand by what it promises. If something goes wrong -- and the chances are very high -- the seller can conveniently shift blame to the courier company. The Satyamonline management was apologetic about the goof up and even wanted to send a box of sweets to the India Today office. "Something has gone wrong at the delivery end but such cases are very rare," explained Satyam Infoway President (Communications) David Appasamy. He then shifted the blame: "There are no efficient courier firms providing professional services." Such glitches are not uncommon. India Today placed another order worth Rs 500 placed on the amul.com site five week ago. The merchandise is yet to arrive. Many sites don't stick to deadlines. India Today ordered 1 kg sponge cake from Rediff on April 15. The order was confirmed through e-mail within hours (Rediff order No. 548359). But while it promised to deliver within 48 hours, the cake arrived only on the fourth day. "Unlike in the US, automated inventory tie-ups with distributors are practically non-existent in India," says Madhu Kodali, president, e-commerce, Indiainfo.com. Indeed, back-office jobs like picking the right product, packing it, shipping it and tracking its progress till it reaches the customer is a major headache. Some online retailers like Jaldi, Fabmart and Indbazaar outsource products from offline retailers. Some like bababazaar and Indishop handle everything in-house. Others like Amul use their own offline retail network. "This end of e-commerce has proved to be the most troublesome," admits Jayen Mehta, marketing manager of Amul. Another catch are the hidden costs like shipping charges. Shirt manufacturer Chiragh Din charges $5 (Rs 220) even for delivering within India. So a shirt priced at Rs 800 may actually cost the customer Rs 1,020. Similarly, Hyderabadbazaar.com, an online supermarket aimed at NRIs, offers free delivery within Hyderabad but charges Rs 265 for delivery in Andhra Pradesh, Rs 350 for south India, and Rs 440 for rest of the country. So, has e-commerce tanked in India? Not really. While the business-to-business segment is set to grow, the business-to-consumer bit may not be able to achieve the critical mass that is so important for a business to remain afloat. "The Internet customer is very hard to predict. Retaining a customer is tough on the Web because he has a wider choice," says Kumud Goel, managing director of KLGE Systel, which owns the jaldi.com site. Adding to this problem is the low penetration of PCs in India -- three computers for every 1,000 people. Hemant Sharma, CEO, Trisoft Design, says, "The business-to-consumer segment really doesn't have critical mass. A few people browsing the Net from their offices are not enough to qualify as an Internet revolution." Even if pc prices come down, and connectivity becomes cheaper, unless online stores iron out the problems of logistics and distribution, it will be a long time before jaldi.com, which claims that it has sold goods worth Rs 3.5 crore within six months of launch, can hope to become the amazon.com of India. |
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A
Saturday afternoon in May is not a good time to hang around in Mumbai's
crowded Crawford Market. Hundreds of shoppers laden with purchases jostle
along the pavements, search despairingly for taxis or struggle to find their
way through the narrow alleys. The crowd, the sweat, the grime is enough to
put you off shopping for life. But wait: surely shopping in the summer of
2000 is going to be different. At least in Mumbai, where dotcoms offering
the ease of "online shopping" have mushroomed in the past few
months.