2013 trends for a maturing E-commerce space in India

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2012 was an exciting year for Indian e-commerce, which capped off an incredible 5 years of exponential growth, from approximately $1.75 Bn in 2007, to over $14Bn by 2012. A lot is being written about 2013 as a year of possible consolidation for the industry. But regardless of how things develop in this sphere, 2013 will see more interesting trends and more interesting innovations in the Indian e-commerce, as the market matures.

The rise of M-Commerce

Kleiner Perkins (one of the world’s largest VC firms) research into mobile Internet usage this year uncovered some fascinating insights for the Indian context. Globally, the share of mobile Internet traffic is approximately 13%. However, in India, the % curves for desktop internet .v. mobile internet usageintersected in May 2012 and have since diverged: mobile Internet traffic in India now outweighs desktop traffic. Assuming this trend continues, and is perhaps accelerated by the emergence of increasingly affordable in mid-low end smartphones (with even Apple rumoured to be entering this market), India will be the first true-mobile-first market. Indian e-commerce firms prepared to invest in creating world-class mobile platforms are best-positioned to capture more market share.

Bridging Thee-Commerce Product ExperienceGap

The essence of e-commerce still means that customers must feel a certain degree of comfort that what they are buying will fit them / look good on them / look right in their living room etc., and clearly many Indian shoppers still have major concern over this (despite generous returns policies).

In 2013, we expect to see some interesting initiatives in India to bridge the information gap between what the consumer wants and what the product is. In fashion and lifestyle this may include innovations that leverage technology to help a consumer to find an item of clothing that is a perfect fit via a ‘virtual try-on’ experience, or perhaps how an item of furniture will look in your own living room.

Social becoming more about Online Reputation Management (ORM) and less about catching attention

E-commerce adopted the use of social media early on, but for a long time social media has been about eyeballs, offers and other ways of grabbing the attention of potential customers. The thinking was that wherever the customer is, your brand should also be. Simple. Well, not really. Your brand’s online reputation management must be characterized by the existence of one seamless ‘voice’ across all channels: Facebook, Twitter, Linkedin and so on. Customers in 2013 will more and more value brands that stand for something, or are differentiated in ways other than low prices and wide product ranges. We have seen just how important this mix is with our recent focus on Apple products. Customers are buying MacBooks, iPads, and iPhones from us directly from social media engagement that is not limited to offers and features. Our ORM across our social media platforms has been a focus of ours of late, and companies more and more will understand the value of this in 2013.

Product Videos: Engaging and Informative

Most e-commerce companies are very much aware of the importance of including high quality product images on their product pages. Typically, products are photographed from several angles, with the photos touched up to give a glamorous look. Photos tell part of the story, but in 2013 we believe video will start to be a significant differentiator in e-commerce for a number of reasons. Firstly, you can create more impactful content via video. Sure, that laptop bag looks nice from several different photo angles, and I can read all I need to about the product in the product description section, but how does it look on someone’s arm? Does it look sleek and professional or a little tacky? How many compartments does it have? How big are they? Could I comfortably fit a laptop in there along with a couple of books and a few snacks to keep me going throughout the working day? What are the best features of the bag? What would a young business professional think of it? These questions and more, could all be answered with a simple 60 second product video, with someone showcasing the product, putting it to use, and laying out its strong points in a way that appeals to the viewer. Product videos are not easy to execute, but if done well they can have a significant impact on product page conversion rates. We expect to see this as a major trend in Indian e-commerce for 2013.

‘Shoppable’ Images & Videos

And even going one step further, interactive, or ‘shoppable’ images and videos have recently been experimented with by several large players, includingIKEA and Gucci. Shoppable images create a vision of how products will look in the place where they are meant to be placed. So rather than browsing through an array of product pages to look at images of chairs, tables, sofas (all with plain white backgrounds) customers can browse through images of a fully-furnished home, tastefully designed with a selection of products available from that company – each product viewing in its natural setting, with of course a clickable link from the product image to the product page. Shoppable videos can be used in a similar way. With the typical high-production values of a fashion video, a company can display this season’s must have products – the difference being that the products in the video are clickable (even as the video plays) and when clicked, bring the viewer to the product pages of the selected product.

Emergence of B2B

The Indian e-commerce story so far has been dominated by B2C e-commerce companies. However, there is one trend that has yet to really hit the subcontinent, which we believe will begin to feature more and more in 2013. This trend has revolutionized how business is conducted in the developed world and the numbers involved are incredible. The trend is B2B e-commerce.

In the 2012 US Dept. of Commerce report, B2B commerce in the US was measured at $3.7 Tn. While this figure includes transactions carried out over EDIs (eg. how Wallmart manages electronically its inventory requirements with 60,000+ suppliers) the figure is very much representative of businesses adopting e-commerce en mass. In the same report, B2C e-commerce is measured at $400 Bn. A huge figure on its own, but it is a mere 1/10th the size of B2B.

Indian B2C e-commerce is currently valued at $14 Bn, with many commentators predicting it to reach $60-80 Bn by 2025. But looking at the US, the giant opportunity of tomorrow in Indian e-commerceis clearly B2B. Companies that can win the loyalty of businesses and leverage technology to assist them in their efforts to increase efficiency will be able to grow to a scale that will be the envy of the B2C portals. Businesses buy larger basket sizes, and they buy more often in comparison to consumers. The question is not ‘if’, but ‘when’ this macro trend will really hit India.

We believe that the B2B e-commerce wave could soon hit India because of the educational role that B2C has been playing for the past 5 years. The advancement of B2B e-commerce is very much supported by the prior establishment of a strong B2C market. In a nascent market like India, potential business buyers may be resistant towards embracing e-commerce for reasons of trust, skepticism, or just general inertia that sometimes hampers the adoption of would-be beneficial innovations within an organization. However, with the penetration levels of B2C e-commerce increasing month-on-month, and with 800% growth over a 5-year period, B2C e-commerce has reached a point of critical mass. In 2012 e-commerce has very much been on the business agenda, and many business professionals have by now bought online – it’s much easier to hand over Rs. 200 for a book on your first online purchase than it is to spend several lakhs on a bulk order consignment of laptops for your business. But those first few B2C purchases, if a satisfactory experience for the customer, are laying the foundation for adoption of e-commerce in Indian business by those same customers who have gained comfort with e-commerce via B2C. It is certainly our experience with the majority of our customers. Almost all have prior experience as B2C customers with the established players. So not only are they well-educated about e-commerce, but they expect nothing but the highest standards of customer service. Companies of all sizes are adopting. While we serve smaller orders via our website very efficiently, we’ve gone an extra step further with our corporate microsite offering for large businesses: we offer tailor made e-procurement solutions for large businesses to streamline their operations in this area.

And if today’s business professionals are gradually adopting e-commerce, the business leaders of tomorrow are already full-blown experts. The age profile of Indian Internet users is overwhelmingly young: 75% of users are in the 15-34 age bracket. Today’s young Indian web-users are already booking cinema tickets, and buying shoes online and are extremely comfortable using e-commerce. The same individuals who are buying movie tickets and shoes for themselves today, will be the MDs and admin buyers of tomorrow – thus, even if the B2B e-commerce wave does not break fully in 2013, its arrival over the coming few years is very much certain.

Disclaimer: This article is originally written by Arvind Sivdas, Co-founder, OfficeYes.com for indiadigitalreview.com. For original article Click here.

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Mohit Bansal(23) is B.Tech in Electronics and Communication Engineering from Indian School of Mines, Dhanbad, India. He has interest in business and entrepreneurship and has published couple of research articles. He is also associated with various NGOs. He is with Techaloo when it was just in concept stage. The Techaloo site was not existing even then. Currently Mohit is working with Mu Sigma as a Business Analyst Profile.

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