outlook15
As part of our #Outlook15 series, we asked heads of e-commerce companies – Amazon India, Flipkart, HomeShop18, eBay India, Indiatimes Shopping, Infibeam and ShopClues about their focus areas for 2015, and the challenges that the online e-commerce ecosystem needs to address. Answers have been shortened for brevity.

Which according to you were the top developments and roadblocks in the e-commerce segment in 2014? Why?

Sundeep-Malhotra-Homeshop18Sundeep Malhotra, Homeshop18

– Exclusive launches by digital companies which garnered attention as well as sales. At HomeShop18, some of the exclusive launches that did exceedingly well were the Spice WhatsApp phone, Zen Firefox Phone and Spice Watch phone called the Smart Pulse.
– Food and ration was a new category that was launched this year and we saw a nearly 100% growth in this category.
– A substantial change was noticed in the evolving customer base with emerging cities developing as high demand markets.
– Customers experimented with new and other safe payment options by adopting mobile wallets.
– T-commerce (TV) got enough attention as a sustainable model to scale operations, with others looking at foraying in the sector.
– Some hiccups faced this year were logistical growth not matching up to the demand of the e-commerce industry.
– There was a constant need of technology support and infrastructure to ensure smooth customer experience. Also, continuous training of customer service executives was necessary and important investment of this year.

Vidmay Naini, eBay India

– Many brands and retailers made their online debut either through owned websites or through online marketplaces such as eBay India.
– E-commerce also proved to be a great platform for MSMEs to expand their business not only within India, but also globally through retail exports.
– Emergence of Micro entrepreneurs and ‘micro-multinationals’, capable of selling to a global audience, without the infrastructure of a traditional exporter. On eBay India, there are 15,000 entrepreneurs engaged in retail exports and reaching consumers across 206 countries.

Vishal Mehta, Infibeam

– Increased smartphone penetration has been the key growth driver for e-commerce as there has been increased number of mobile transactions. This will continue to grow as more and more merchants will adopt mobile responsive platform offering convenience and speed.
– Logistics and Internet penetration are still major challenges for e-commerce players in Tier II and Tier III cities and will help to e-commerce discover more pin-codes if adequately addressed.

Saurabh Malik, Indiatimes Shopping

– We witnessed many fold increase in online transactions as compared to the previous year.
– Significant rise in overall conversions in tier 2 & 3 cities, and startlingly, this is a huge jump as compared to metro cities.
– 2014 has also been a significant year for us in terms of growth in Fashion & Lifestyle categories like Footwear, Apparel and Home Décor.
– On the flip side, we, along with industry peers are still evolving in terms of courier logistics. During festive season, for instance, the orders grew invariably versus the courier capability, which led to delay in delivery and hence gaps in promised service.
– The difference in taxation laws from state to state also plays a major hurdle and COD option is a challenge for tier 2 and tier 3 cities/

Sanjay Sethi, ShopClues

– Some of the significant developments included consolidation within the sector, multi-million dollar investments, high-decibel advertising, and heavily-promoted flash sales.

What are the consumption patterns (online & mobile) that you observed in 2014?

olivier renckAmit Agarwal, Amazon India

– Nearly 50% traffic comes through mobiles and over these past 18+ months, we have witnessed a significant increase in traffic & sales through our mobile platforms. Additionally, the repeat rate of customers is very healthy, indicating a good shopping experience.
– Nearly 50% of the orders come from non-metro cities.
– Customers are ordering unique products with the same enthusiasm as they are ordering popular products. We have seen growth across all departments including the usual suspects like Consumer Electronics, Books, Shoes, Watches, Baby Products, Apparels and the new ones like Gourmet & Specialty Foods, Pet Supplies, Party Supplies, Musical Instruments and Office & Stationary Supplies. Instruments like Ektara, Gopichand, Harmonicas, Bamboo flutes feature in the bestsellers list on our Musical Instruments store along with guitars & keyboards. Some exotic products like Newby Flowering tea got ordered from across India right from Bangalore, Delhi and Mumbai to Bhatinda, Hoshiyarpur, Chamarajanagar, Tadepalligudem (AP), Khelmati (Assam) and many other towns. Customers started ordering X’mas trees on Amazon.in in November and their sale has jumped up by 9X in December.
– High repeat purchases on items like sanitary napkins, oral care and adult diapers. Napkins and adult diapers are particularly fast moving with a large number of customers buying these at regular frequencies.
– Cash on Delivery continues to be a popular payment method contributing to more than 50% of the overall transactions but card transactions are on the rise as well.

Sundeep Malhotra, HomeShop18

– Non-metros are increasingly becoming growth drivers for Homeshop18. Sales in Tier II and III cities mirroring those in Metros and Tier I, due to higher Internet usage and mobile presence.
– The products categories popular this year was food & home improvement segment with nearly 100% growth of the category.
– Mobiles, Home Appliances and Health & Beauty continue to contribute over 50% of our sales. Clothing especially, sarees and Bollywood inspired suits were also popular.

Vidmay Naini, eBay India

– Customers have been shopping more for products in the lifestyle category with women shoppers in the country being the prominent contributors to the category, as per the eBay Census 2014. The lifestyle category has increased its share in the pie to 45%, trailing the electronics category by just 2% now as compared to 7% in the previous Census.
– eBay India received 43% of traffic through mobile devices with 40% of products traded through mobile devices in India. Increasing usage of mobile devices with deep penetration of mobile phones in non-metros has led to increase in online shopping through mobile devices.
– A considerable demand in the global market for unique products like Indian jewellery and handicrafts. This growing demand has led to a growth in export hubs on eBay India. To support this initiative eBay India facilitates its merchants to export to 206 countries in the world with the top countries for retail exports on eBay.in being US, UK and Australia.

Michael Adnani, Flipkart

– M-commerce in general has become more popular. We see over 50% of our traffic coming from mobile – with majority of the traffic from tier 2 & 3 cities. Along with searching and comparing of products online, they are opening up to doing transactions too.

Vishal Mehta, Infibeam

Vishal Mehta

– Categories like home furnishing, electronics, home appliances, life-style are still majorly browsed and transacted over traditional devices.
– Consumption of mobile, entertainment and travel category has increased over mobile platform as there has been an increased adoption of mobile apps and responsive sites by merchants.

Saurabh Malik, Indiatimes Shopping

– The percentage of traffic from mobiles & tablets grew tremendously. Subsequently, the conversion rate of mobile traffic saw huge jump in 2014 as more and more consumers shopped from mobile than they did in 2013.
– The average purchase value of mobile customers is however much lower than that of desktop.

Sanjay Sethi, ShopClues

– We launched our Android app in early 2014 and now nearly 40% of our business comes in from this platform.

cmn-Amazon

How has the sector changed from 2013 to 2014?

Vidmay NainiVidmay Naini, eBay India

– Consumers took to e-commerce through multiple access points ranging from PC to laptops, smart phones, phablets and tablets, television and even interactive kiosks.
– With online shopping becoming mainstream in India and forming a significant part of the multi-channel strategy of brand and retailers, tapping consumers at all touch points took precedence in 2014.
– 2014 also saw high speed internet becoming mass and taking on to Bharat (non-metros) and Rural India. This, coupled with the increasing trend in non-metros of installing WiFi routers in the households have given consumers freedom to consume Internet through various mediums like PC, mobile and TV giving further impetus to online shopping.

Vishal Mehta, Infibeam

– We witnessed consolidation, new categories going online and new startups offering value added services complimenting existing and mainline e-commerce players.
– E-commerce valuations have gone up opening more investment opportunities and there is a change in transaction medium to mobile platform. There’s been an increase in the number of online stores as more and more local & national brands are now adopting e-commerce to increase growth.

Saurabh Malik, Indiatimes Shopping

– Discounts and deals ruled in 2014. Most of the eCommerce players ran some or the other sale throughout the year.
– Last year, the focus was on upscale of service & delivery, but this year, equal emphasis was on keeping customers coming back along with new acquisitions. We can sum up the major changes as increase in online customers and the usage of mobile apps for shopping.

Sanjay Sethi, ShopClues

– Indian masses have actually shown preference for it over physical retail. Competition has intensified and its imperative for players to have a differentiated offering in the market.

Michael Adnani, Flipkart

– Customers are becoming more comfortable with shopping online. The quality of products and speed of delivery getting better have been the key factors in building the general level of confidence in customers.

– Increasing amount of participation from tier 2/3 cities. Online platforms offer them access to products that is not available at their location. A lot of people from smaller cities are going online instead of offline because not only can they get the product at the same time as the rest of the country, they can get at the same price too along with superior after sales service.

Sundeep Malhotra, HomeShop18

– Greater Internet penetration, cheaper devices and increase in mobile Internet have allowed consumers access to more brands.
– We have also witnessed an increased adoption from non-metros with increased traffic from emerging markets like Guwahati, Patna, Lucknow, Ahmedabad, Jaipur and Dhanbad. 40% of our consumer base belongs to emerging markets. Unlike metros where people first used desktop for shopping and then mobiles, consumers in smaller towns have started virtual shopping with our TV channel and directly graduated to mobile shopping.
– Recently, we went stock-out on the launch of Zen Firefox U105 that was available at only Rs 1,999. It received a staggering 15,000 orders, reiterating the demand of low cost devices in India.

Vidmay Naini, eBay India

– Tier II & III cities driving e-commerce in India: e-commerce in India has seen a significant upsurge in the number of people shopping online across 4,556 e-commerce hubs in the country with 3,313 tier II & III cities (Bharat Hubs) and 1,233 Rural Hubs dominating the shopping trends.

Saurabh MalikSaurabh Malik, Indiatimes Shopping
– In 2014, people bought more Footwear, Apparel, Home Décor and other non-electronic items online than they did in 2013. It’s primarily because people are now more confident with the timely delivery of goods, return policies of the e-commerce websites and the huge variety & discounts they get.

Vishal Mehta, Infibeam

– There has been drastic shift of urban metro population from offline to online shopping, due to improved IT infrastructure and Internet penetration. Further, it is now shifting from fixed devices to mobile devices with increased usage of smartphones in Tier 1 and Tier 2 cities.

Sanjay Sethi, ShopClues

– Consumers from tier 2/3 towns hopped on to the e-commerce bandwagon en masse in 2014, led by Internet penetration and awareness. With each passing month, we saw a steady increase in traffic on our site.
– The aggressive use of mass-media by many industry players helped to create interest and we saw many first-time consumers shop on our site.

How has your relationship with brands changed in 2014? What are your observations?

Sundeep Malhotra, HomeShop18

– In 2014, we expanded our portfolio by foraying into the grocery and ration segments, and also strengthened our existing categories with new brand tie-ups. We continued to see our brand ties strengthening and partners continuing to offer products along with manufacturer warrantee to our customers across our multi-channel platforms – TV, Web and Mobile.
– We also extended our brand associations by engaging with celebrities to bring their personalized focus to our product portfolio. With Shilpa Shetty Kundra, we launched the exclusive SSK Line of sarees whose pocket-friendly glamour was appreciated by our shoppers.

Vidmay Naini, eBay India

– Our relationship with brands has only become stronger in 2014 due to our extensive reach that allows them to offer products to a wide customer base.
– We have tied-up with well-known Large Format Retail (LFR) chains like South India giants Viveks and Sangeetha Mobiles to add to the existing ones, who will be offering their specialised product range exclusively to our customers. Besides, leading brands like Karbonn Mobiles and Intex have already launched their latest offering exclusively on eBay India.
– We now have many brands and merchants across categories who are exploring the online route through our platform as part of their omni and multi-channel strategy. This allows them to reach out to customers across all demographic groups on ebay.in.

Vishal Mehta, Infibeam

– We follow structured brand alliance guidelines and act as an extension to the brand’s offline retail arm while brands also follow a uniform structure to offer products and services for online and offline channels. In India, Infibeam is one of Apple’s exclusive & authorized partners for iPhones and iPad.

How have the exclusive tie-ups with brands helped your company in 2014?

Michael AdnaniMichael Adnani, Flipkart

– Exclusive associations help us offer a wider range of products. The key focus is to introduce products that are in tune with every customers need. These partnerships actually help us better serve the customer. The overall aim of these associations is to increase customer satisfaction.

Amit Agarwal, Amazon India

– Recently, we launched nearly 4 brands exclusively on our platform, including President Shri Pranab Mukherjee’s new book ‘The Dramatic Decade’, book on the Bollywood blockbuster Dilwale Dulhaniya Le Jayenge by Aditya Chopra, The OnePlus One smartphone, Britannia Good Day Chunkies, Grasim, Victorinox travel gear, The Trunk Label, The Closet Label, Canon Pixma MG 5670 printer and may others.
– We not only play a significant role in driving sales but also in building consumer awareness about products and educating customers about the benefits of these offerings so that they are able to make smart purchase decisions.

Sundeep Malhotra, HomeShop18

– Our exclusive tie-ups have allowed us to en-cash on the pre-buzz and excitement around new launches while extending our business through engaging customer experience.
– Exclusivity has helped us tap into newer markets, riding on the trust of our customers who are assured of genuine products
– In the lifestyle and apparel segment, we sold 3,000 sarees of the exclusive SSK line within the first 21 minutes on our TV Shopping channel.

Saurabh Malik, Indiatimes Shopping

– Exclusive tie-ups with brands bring trust & accessibility and converts offline transactions to online transactions. This also helps the customer know the brand in detail and make an informed buying decision.

What are the likely trends that you expect to see in 2015? Why?

Amit Agarwal, Amazon India

– We will continue to focus on three key aspects — product selection, reliable online shopping experience and building quick & convenient delivery mechanisms. We are focused on creating a Mobile First experience, since we want our customers to be able to do everything they do today on their PCs from their mobiles while searching and shopping online, be it through a browser or an app.
– Although the range of screen sizes and device capabilities available in India is very high, we do not try to force fit one mobile interface to all devices. We have multiple mobile platforms that help us support all Internet enabled devices in the market. The smaller screen size of the phone also has impact on how customers browse, search, discover and research products on the phone.

Sundeep Malhotra, HomeShop18

– 2014 has sown the seeds of some of the trends that will unfold in 2015. Digital commerce will see greater consolidation and investments in personalization, digital marketing and web analytics in order to stay competitive.
– There will be greater exploration to build alternate models of sustainability. India Inc will continue to further open doors to increase their foray in digital commerce through investments or mergers and acquisitions.
– The growth of M-commerce is already apparent, but next year will see mobile become the first screen for a large part of the population and is likely to take over web transactions. Also, for TV shopping specifically, we believe mobile will play the role of a complimentary second screen, aiding consumers in deeper discovery and wider choice besides ease of ordering.
– Mobile wallets will pick-up steam as the preferred modes of payment.
– Logistics sector expanding and catching up with the demand and creating a mechanism to reach out to Tier III & IV towns of India.
– Technology will continue to play an important role in the growth of this industry and big data will help in acquiring new customers and reaching out to them with personalized products and promotions.

Vidmay Naini, eBay India

– The year 2015 will be more defining in shaping up the industry as players with sustainable business models & the ability to deliver scale will dominate the consumer’s wallet & win in the long run.
– We aim to concentrate further on smaller markets in 2015, both from a buyer & seller perspective, as they will be the major stakeholders in the e-commerce industry in the coming year. We also strongly believe that the future of e-commerce is mobile commerce and with the increasing usage of mobile devices, we look forward to promoting adoption of the eBay mobile app across platforms in 2015.
– Retail exports will continue to be a key focus for us. In the coming year, we will see a plethora of offline traders getting online to sell. They will come from across the country and offer merchandise ranging from handicrafts to apparels to even machine parts.
– In order to meet the employee requirement for the sector in the future, we will also focus on training merchants through our ePro programme launched last year with NIIT, which helps them understand the online marketplace model and start their online venture online or scale their business.

Vishal Mehta, Infibeam

– Mobile commerce will continue to grow in coming years due to availability of affordable smartphone in the market. Adaption of mobile responsive platform and increased usage of mobile applications will be driving trend in 2015.

Saurabh Malik, Indiatimes Shopping

– In 2015, we are targeting to explore more niche categories, with an increase in coverage beyond tier 2 and tier 3 cities.

Sanjay Sethi, ShopClues

Sanjay Sethi

– Mobile commerce will take the center-stage resulting in a need for niche professionals and service providers
– Language-based personalization and communication in regional languages will come into focus
– E-payments will become the norm. Wallets will gain prominence
– Social Shopping/recommendation based shopping enabled by social media
– More brands will embrace e-commerce (apparel, FMCG, auto, real estate) – anyone with significant offline footprint.

What are the challenges in the e-commerce segment that needs to be addressed in 2015? How do you think these challenges can be addressed for the growth of the sector?

Amit Agarwal, Amazon India

– We look forward to a scenario where the laws evolve to keep pace with the new-age online business models in order to enable a faster, convenient and nationwide access to customers for sellers, especially small and medium businesses, at significantly low costs.
– It would be good to see how the interstate movements of goods can be made less cumbersome. Goods and service tax (GST) is a great example that could make it easier for the small and medium sellers & manufacturers to move their goods which is cumbersome today.
– You can make payment regulations that makes it very easier for customers to pay.
– Opening up this sector to FDI will be good for consumers and Indian businesses as it would allow us to partner with local manufacturers to source products not carried by other sellers on the marketplace, giving Indian consumers unique and wider choices at lower prices. Allowing FDI will also positively impact infrastructure development in the country.

Sundeep Malhotra, HomeShop18

– For e-commerce to expand further in India, it is important to have Uniform GST and tax measures that will play a crucial role to make e-commerce a success story in India. This move will certainly simplify the tax structure and make India one single common market by rationalizing the supply chain and thereby, offering better value.
– Building rural infrastructure will ease pressure and allow faster movement of goods. We hope to see a continued growth in both e-commerce and m-commerce with better broadband connectivity across the country.
– Addressing concerns around logistics issues, building a superlative customer engagement experience are some of the challenges in front of industry players.

Saurabh Malik, Indiatimes Shopping

– Capability of logistics infrastructure and Taxation/Laws unification across India needs to happen in 2015. This will enormously help e-commerce players to tap the un-serviced areas and increase reach.