Off line route to On line success

Last few months of chatter about the e Commerce scenario in the country has had me baffled in many ways than one. The valuations , the work culture , the last mile delivery and the insane hiring in the early days and the recent layoffs.

The Global Context

From a more macro economic perspective , the protectionism which Mr. Trump once reeked of has not played out so well ( I am referring the China and the Mexico stories ) . Also , the silver lining is that the Calendar Year 2017 has seen not only the big engines firing but also emerging economies . However , global commerce and therefore investment in the Indian e Commerce sector will be a geo political risk with new leadership emerging across the globe.

The Turmoil

The early 2014’s witnessed billions of dollars being poured in the Indian e Commerce Ecosystem. Then came in the news of firms making substantial loses and investors becoming cautious and pushing the companies to strive for successful business models. Along with the declining investments in the sector , 2016 also brought along firing of employees . According to data from Traxcn around 300 start ups closed down in 2016 . The consolidation in the industry ( Myntra ; which was bought by Flipkart , acquired rival Jabong for $70 million. ) or the apparent termination of bloodbath has also had investors looking at other sectors .

The learnings from Off line Business:

The Cash Burn
The cash burn has to cease .
With only 1% of the Indian market being online there is an urge to grab a more potent market share . However , to reduce the cash burn and see some semblance of profits , the customer acquisition costs have to come down . Firms now need to embrace the ‘ earn and burn ‘ approach.

The Logistics Route :
As Mr. Deepak Parekh ( HDFC Ltd . ) pointed out in a recent address ; India delivers only about 2 million packages a day compared with an estimated 57 million in China and 35 million in US . Needless to say that the logistics , warehousing and the transport infra are the key pivots for the Indian e Commerce . Sprucing up core logistics has been the challenge and key focus area for offline organized retail in the country as well.

It is beyond the UX :
While any of the Indian e Commerce may oscillate towards offline and online medium of getting eyeballs ; what has to be comprehended is that in the current customer experience perspective even the last mile delivery counts , specifically from a customer experience point of view . At times the contentment associated with the speediest delivery can be offset by the rudest delivery boy . The UX and the CX in turn has to be more widely envisioned.

Discount Me Not :
Late 2016’s also saw the decrease in discounting and it’s effect on growth was anybody’s guess. For a business channel which has made inroads on discounting , movement to providing value to the customers for each of the transactions conducted on the interface ( mobile or web ) has to be made paramount.
Some of us do maintain that the Indian consumer e Commerce story got heated too much too soon ; however with a fresh the set of investments flowing and with a more strategic focus on posting profits we should be looking at clear skies very soon !!