Indian E-Commerce Players Will Innovate To Overcome Challenges & Scale

23 August, 2011

The third edition of the VCCircle E-Commerce Forum, co-hosted by Techcircle.in, has witnessed a flood of 400 participants from the entire e-commerce ecosystem, including entrepreneurs, investors, as well as executives from offline retail firms – all congregating to discuss the new e-commerce categories, offline plays and infrastructure challenges for a status check on the industry.

Speaking at the keynote, Ajit Balakrishnan, founder of Rediff.com (India) has said, “I wish there were 100,000 e-commerce firms – that way we would have 50-100 e-commerce sites which are great. It is fantastic to have irrational and rational exuberance.” He has also talked about the mosaic of institutional drivers, such as backhaul connectivity, credit card population, capital gain issues and legal issues in the ecosystem.

The opening panel – The Indian E-Commerce: A Status Check & Where Are We Headed – has been moderated by Manik Arora, MD of IDG Ventures, India, while the participants are HomeShop18, Infibeam and eBay India.

Manik Arora has started the discussion by stating that India has already witnessed venture capital investments in excess of $500 million this year and this number can easily cross the $1 billion mark by the end of 2011. Half of this has been invested in the e-commerce sector.

Sundeep Malhotra, CEO of HomeShop18 has added to this by saying, “Although capital and finance are readily available, lack of talent, infrastructure and logistics still pose a challenge. But the biggest challenge is the lack of credibility and trust. Companies need to build customer confidence for better acceptance of e-commerce.”

Gautam Gandhi, head of business development at Google India feels, “We play the role of an intermediary. We are all entering new territories and will witness how online and offline will meet each other in the near future.”

Infibeam’s founder Vishal Mehta has said, “As a culture, we foster innovation. E-commerce is about flawless execution, trust of consumers and there may be a lot of issues to simplify now.”

According to B Muralikrishnan, country manager of eBay, “Scalability at various levels is the biggest challenge for Indian e-commerce.”

The second panel – The Rise Of New E-commerce Categories: Can They Scale – has seen Vani Kola, MD, IndoUS Ventures, as the moderator and Inkfruit, Carat Lane, Babyoye and Sequoia Capital as participants.

“Value on delivery has to be taken care of. It is mandatory for all e-commerce companies to make it a priority,” comments Kashyap Dalal, CEO, Inkfruit.

“There will be one or more $1 billion exit in India by 2012,” predicts Vani Kola.

The panel called What Attracts Large Retailers To The Game has witnessed Future Group, Tata-owned Infiniti Retail and Bombay Stores participating in a riveting discussion, moderated by Mahesh Murthy, Partner, Seedfund.

Kashyap Mehta, head of e-commerce at Infiniti Retail Ltd, has commented, “Retailers go online to increase their reach, since it provides more access and also because it offers a convenient channel to do both discovery and research online. They can set up a multi-channel to tap various cycles of a consumer transaction.”

Rajiv Prakash, advisor (digital businesses) to the Future Group, has said that Future Bazaar is using the Web, mobile and telephones as digital channels to reach out to users. “Our idea is to take a digital commerce approach and we will use digital influences – from increasing awareness through to marketing and online research – when information in stores is unavailable. Digital is important in enabling conversations.”

According to Bombay Stores’ CEO Anagg Desai, it is a “no option, no brainer” choice for offline players seeking to go online. “It’s like going on Facebook,” he has said. “Wherever it brings relevance to introduce an offline play, like travel sites and matrimonial sites, e-commerce stories will also set up kiosks and stores.”

In the last panel on E-Commerce Ecosystem: Infrastructure Enablers and Service Providers, moderated by Alok Mittal, MD of Canaan Partners India, the discussion has revolved around the readiness of the ecosystem and the main challenges being faced by backend players.

Pawan Gadia, head of e-commerce at flower retail chain Ferns N Petals, is targeting a turnover of Rs 30 crore. “Technology challenges still rule, as bandwidth and hosting are still very expensive. Quality analytics is still too prohibitively priced. There is a lot of customised per-vendor requirement when it comes to technology,” said Gadia.

BillDesk MD Srinivasu agrees that the existing infrastructure is not good enough and there are only 20 million issued credit cards in the country and 250 million debit cards. However, the number of people transacting online is growing now. Domain name registrar and hosting services provider Net4 India’s MD Jasjit Sawhney has said that the technology challenge is the least of the problems, especially with Cloud computing and software as a service offerings from Oracle/SAP and other large firms. “Start-up time to set up an e-commerce business has shrunk manifold,” he observes. Incidentally, Net4 India had attempted a payment integration service but had to pull it off as it was not viable.

Courier companies such as Aramex will soon allow users to swipe their credit cards on delivery of packages, right at their doorstep. According to Perci Averi, country manager of Aramex, there has been a sea change since the company first stepped into e-commerce in 2001 and that there are more companies wanting to take control of what’s being shipped, better control over inventories and information. Technology is playing an important role, he opines. “Courier times will fall from days to hours,” adds Averi.


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Indian E-Commerce Players Will Innovate To Overcome Challenges & Scale

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