20th January 2007, Mumbai
The second session, which discussed how to leverage internet to E-nable businesses, was moderated by Sanjeev Bikhchandani, founder and CEO, Info Edge. The other members of the panel were Mark Fox, chairman and CEO, Novator; Sandeep Murthy, CEO, Cleartrip.com; Vivek Nayak, chief operating officer, Avenues India; and Virender K Ahluwalia, CEO, Fobaz.
Mark Fox said offline retailers need to move into the online if they want to maintain their market share. He said the line between offline and online is blurring. The web has become the dominant place where customers research for offline purchases. And so if the retailers want to keep up and compete not just in India but globally they will have to integrate their offline businesses with the online. Fox even suggested retailers to extend their businesses into social networking sites and simplify ordering from mobile phones.
Vivek Nayak said there are 12 million retail enterprises, according to 2003 figures, in India, out of which only 4500 are e-enabled. And out of these 4500 online business enterprises, 85 per cent are pure play internet merchants. To drive his point across, Nayak said even well established offline enterprises such as Shoppers’ Stop, Samsung India and Louis Philippe don’t allow their customers to purchase the goods online. On this Sanjeev Bikhchandani responded by saying offline people are smart, may be they don’t see enough customers online! Unimpressed, Nayak said if you create value people would come online.
Now the question remains what’s holding back offline businesses from embracing the online opportunities. According to Vivek Nayak, the possible reasons could be low level of internet penetration, non-availability of easy and secure payment gateway, and technology challenges. He said it’s often difficult for brick and mortar businesses to understand and figure it out how to deploy the necessary technology to create the online efficiency. Clearly the need is for technology companies to become friends of brick and mortar enterprises and create offline solutions that seamlessly integrate with online solutions.
[Update: In an email to AlooTechie, Vivek Nayak has clarified, “I have never said that 'non-availability of easy and secure payment gateway' is one of the reasons eCommerce is not growing in this country. That certainly is not true. India has one of the best online payment mechanisms in the world where an independent payment gateway service provider like us have been empowered by the system to offer 6 credit card payment options and 13 net banking direct debit options. These options are more than adequate for current levels of eCommerce. As and when new payment options come to life, we will be tying up with them too - recent examples being Paymate and ItzCash Card - with whom we have already tied up. On the safety issue, let me say that in the five years plus that CCAvenue has been in existence, I have yet to meet a customer who has lost money because of making payments on an insecure payment gateway. This has never happened. The encryption standards are very high and almost impossible to crack. 99% of frauds one read about in the media originate from unsafe offline transactions in restaurants and shady outlets where the cardholder lets the card out of his sight and leaves himself vulnerable to cheating.” (Editor: I sincerely regret for my inadvertent lapse in reporting the session deliberation)]
While comparing the success of online travel, especially online booking of railway tickets, with that of e-retailing, Vivek Nayak suggested may be it’s because delivering services is far more easier in online travel than in retail. To put the issues in perspective, Sanjeev Bikhchandani added Railways is successful in selling its tickets online because it’s a monopoly and also because it’s competing against its own offline booking counters!
Vivek Nayak emphasized the need for evangelising the benefits of internet for the traditional businesses; the way internet could enable offline merchants to provide their customers 24x7 availability of goods and services, and realise faster closing of sales. He further said lots of people don’t understand online marketing, SEM (search engine marketing), pay per click and online brand management. And so evangelising the concept and benefit of online marketing could play an important role in bringing more and more offline businesses online.
While talking about the credit card security in the light of its reported misuse in online payment, Vivek Nayak suggested the media needs to play a responsive role here. He said, unlike the common perception, it’s more risky to use credit cards offline than online.
Virender Ahluwalia said e-retailing is no different from brick and mortar retailing. In online retailing too the key to success is to understand your customers and competition and offer your services through an online platform which is easy to use and has been designed to provide a better experience to its users. Ahluwalia said online is just another form of business model which gives more control to users. However, the need for e-retailers is to shift their focus from product selling to solution selling so as to provide their customers a much enriched and satisfying experience.
While talking about the way online has revolutionised travel industry, Sandeep Murthy said more and more people are entering the online travel space making more options available to the customers. Illustrating his point, Murthy said if one searches for an air ticket from Delhi to Bombay he could get upto 78 travel options to choose from. No wonder, travel forms almost 60 per cent of the total online business in the country. According to Murthy, India is the second fastest growing travel market in the world. And it is expected that online travel agents (OTAs) may capture 25 per cent of the total travel business in the country by 2008. However, he added, the continued success and prosperity of online travel players will depend on their ability to add value to their customers’ experience.