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Concerns About Payment Gateways & Logistics Voiced At E-Commerce Forum

E-Commerce is India is at a very nascent stage, there is hype, but a lot needs to be sorted out before it can thrive. At least this was the prevailing sentiment amongst CEOs and other execs of major e-commerce companies attending the VC Circle E-Commerce Forum at New Delhi. Most felt that logistics and payments are the areas that need to be addressed. “What they said” notes from the conference:

– B. Muralikrishnan, Sr. Director, Marketing & Product at E-Bay India said compared the Chinese e-commerce giant Taobao, which has a 79% market share with more than 400 million product listings and stressed on replicating its manufacturer friendly model; in contrast E-Bay India has 1 million listings. The share of top 10 cities in E-Bay India’s business was around 60%, while business from tier 1 and 2 cities was also growing, as tech products are not easily available in the regions. Muralikrishnan was skeptical about the use of Cash On Delivery as a payment mechanism, but at the same time, was critical of the problems that plague payment gateways in the country, which lead to a bad e-commerce experience.

– Vishal Mehta, Founder & CEO, Infibeam emphasized on the need for local language content on e-commerce sites, giving the example of China and said that English is spoken only by a handful of people; he predicted that in the coming years, 50% to 60% payments online would still be through cash on delivery.

– Dhruv Shringi, Co-Founder & CEO, Yatra.com said that domestic flight sales account for one third of all online sales for Yatra, International flight sales are just at 2%-3% at this time, and the sale of holiday packages is minuscule: so it’s mostly hotels. He voiced doubts about choosing mobile, saying that customer communication and post sale services can be done through mobiles, but he doesn’t see it as an opportunity for selling Air tickets since most people travelling by Air own a computer and like to book through the web site. However, it could be used for bus and railway ticket bookings.

– Sachin Bansal, CEO & Co-Founder, Flipkart felt that payments and logistics are not in a good shape in the country and is making it difficult for customers to transact online. He informed that Flipkart is planning to introduce credit and debit card swipes for home delivery. Flipkart’s conversion rates were in mid-single digits.

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– Vinay Gupta, Founder of Via, said that its hard to sell anything except tickets online. Holiday package sales are expected to remain offline for the next 3 to 5 years. He advocated the adoption of a hybrid concept where sales and membership can be  done offline through retail partners and said that India needs an assisted online sales model.

– Adarsh Gupta from music label Saregama said that there is a need to improve search and discovery. On being asked about his stand on DRM, he replied that Saregama would only sell DRM free music. He credited Caller Ring Back tunes and their subscription model for driving high growth for the company.

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