e-commerce in 2040 - a peek into the future

e-commerce has been continuously evolving thanks to fierce competition and ever changing consumer behavior. Today majority of online commerce happens over a dot com portal accessed primarily through a laptop/PC/mobile device. However in times to come things are set to change dramatically.

Lets fast forward to year 2040 and look into the lives of Dinesh, Sudha and Anil.

It is Friday morning, time is 8:15. Dinesh, 27, a bank employee is speeding away on his hydrogen powered car, thinking about his beach trip over the weekend. en-route to work, he sees a giant electronic hoarding which is showcasing a latest range of goggles. Minutes ago, in the background the hoarding had communicated with Dinesh’s car and figured out his weekend plans, demographic profile and shopping history. After analysing the data the hoarding’s AI deduced that he’s mostly likely to buy a goggle hence, the display Ad. Sitting in his car Dinesh calls out a voice command and his car internalises the complete specs of the goggles, which in turn appears on his car’s 3D dashboard, he takes a quick look and places an order, a simple voice command and it’s done. About 9:00am he arrives at his office desk to find the product delivered at this desk. Dinesh is all smiles.

On the other side of the world Sudha, 39, mother of two kids receives a party invite from a friend living in a far off city. The moment she hits ‘accept’ on the digital invite, she gets a complete list of airway tickets for that sector and a preferential booking in her favorite hotel. She then taps the ‘auto’ option and the system picks the best flight based on her past travel patterns, weather forecast, medical history, income levels etc and books a ticket in the best possible flight, all in one seamless action, No need to key in credit card number or fill in host of fields. She’s travel ready in less than a minute.

Meantime, Anil, a sixth grader is preparing a quick checklist of items he needs to carry for his school excursion the next day. His parents have given him a monthly budget of Rs 50,000 ( I guess that would be equivalent to 5K of our times ). He has to make sure he picks the right stuff which fits into his budget. In Anil’s case AI doesn’t come into play as he is growing up and as part of curriculum he has to do his own thinking. He manually feeds in the list to a tablet PC, being a naughty kid he slips in a few bags of chips and choco bars. He manually calculates the prices, they fall in his budget, he authorizes the payment by placing his thumb and viola order is through. However, what Anil is unaware that  the system has rejected chips and chocos since it is against his dentist’s advice. Also an Immediate notification was fired to his parents about this cheeky act. Package arrives in a while, a note is tagged in, it reads “ chocos and chips were delivered to your parents “ and Anil feels sheepish as reality descends on him.

All this might sound wishful thinking but I strongly believe this would be very much a reality in the future when technology makes a major leap, this means the way we shop will be changed forever. Those will be times when commerce will come to us, we don’t have to step out or carry cash/card to make a purchase. Data analytics coupled with tech innovation will redefine the conventional e-commerce formats.

e-commerce companies will have to lead the way by investing in newer technologies, advanced logistics and creating major touch points to improve customer service and overall buying experience.

What’s your vision? Do you think e-commerce will change in future? If yes, which direction would it go? Feel free to share your thoughts.  
 

How does Amazon's entry into Indian eCommerce market change the dynamics?

Indian online retail or eCommerce as it is better known is close to Rs 50,000 crore big industry ( Source: Assocham ). After a cat & mouse game, American online retail giant, Amazon has made a spectacular entry with junglee.com . In case you thought junglee is a new kid on the block, it was born during the google era, Amazon had acquired it in 1998, for the complete story click here

Now, what happens when a $48 billion company forays into a booming and a fiercely competitive industry? Who will benefit? Who would loose out? Will they be as successful as they were in other parts of the world? How will it change the dynamics of the industry? here’s my take.

Amazon hasn’t gone with its own name and stuck with junglee.com for a simple reason that they are testing waters before making a big splash, but I feel they should have gone with the name amazon, it’s a global brand and commands great recall value, many online shopper’s are familiar with the name amazon so, why go with some other name, that part fails to impress me.

As of now junglee.com is more of an information aggregator, allowing its users to browse several million products from several thousands of global brands. Naturally, without any doubt consumers will stand to gain the most, in terms of pricing, assortment of merchandise, customer care ( Yes! it matters even for an online retailer, in fact much more than offline retail )  and superior reliability of online transactions.  

Amazon’s entry will certainly shake up the online retail market in India, flipkart’s acquisition of letsbuy.com is a clear pointer to the future. I foresee consolidation in this space, though the online eCommerece space has huge potential for growth, the companies which were ‘ built for sell’ might rake in quick moolah and make an grand exit.

Henceforth, If junglee.com proves a  speedy enabler for offline manufacturers and small retailers to get online fast enough, that will truly be a game changer for sales & distribution channels in India, might well go on to be a piece of history in making. Amazon has already received a nod from FIPB, they are injecting about Rs 15 crore to set up a fulfilment center. It’s quite evident that Amazon is here to stay for long.

It will be interesting to see how the existing eCommerce portals would respond to the entry of Amazon. Flipkart has already made its move, looking forward to an exciting bout in the coming months.


Online Shopping Tip: Don't respond to unsolicited Ad mails, type in web addresses yourself.

FDI in retail, who will be worst hit?

Recent announcement of allowing 100% FDI in single brand retail (and the plan to roll out 50% FDI in multi brand retail ) has sparked wide range of 

debate, here’s what I think of this burning issue.

FDI in multi-brand retail will certainly give a boost to the organized retail sector, which in turn positively impacts several stakeholders, including producers ( read as farmers ), workers, employees, consumers, the government, and, hence, the overall economy. In a true potential scenario, opening up of FDI can increase organized retail market size to $250+ billion by 2020, which would make it one of the largest in the world. Though many may be celebrating the move ( push rather ) there are few communities who might take a massive hit in few years from the date of roll out.

Farmers:  I would like to believe that in the initial phase farmers will benefit from the entry of foreign retail giants. Promise of fair price, crop insurance, high yielding seeds, access to modern farming techniques etc will excite and benefit the often under paid and neglected farmer. However, in the longer run the benefits will be marginalized. A good way to measure the effect of retail power on farmers and farm workers is to look at the portion of each Rupee  spent on food at the supermarket -referred to as the retail food Currency  that goes back to the farm. By this measure, virtually all food producers in the countries (where retail industry is organized) have seen their share of the retail food currency decline over time, at points dropping so low that farmers have been forced out of business in heaps.

Also in the longer run Retail giants might start dictating terms to farmers on what & when to produce and slash the unit prices owing to surplus supply. Other area to ponder is that more than 70% of revenues of large format stores come from non-food items where the farmer does not even figure, so eventually farmers might loose their level playing field.

Consumers:   This one is specific to fresh vegetables / fruits and processed food (vegetarian per se). The retails giants in order to consistently stock their self’s irrespective of seasonal changes would in all probability encourage farmers to grow produce inorganically, this would lead to massive supply of less nutritious and at times worthless produce, it may not necessarily affect the consumers health however, nutrition value will be compromised. Here government regulations play an important role, stringent laws can ensure good quality but I have my own doubts (In almost all arena’s we have brilliant laws but seldom implemented).

Small Retailers / Kirana shops:  Probably the one’s who will be worst hit due to FDI in retail. The very idea that big retail can co-exist with kirana is virtually impossible simply because the large retailers can totally change the buying behavior of the customers. The kirana technically caters to the needs of the customers on a daily or ‘on need’ basis, people run to nearest kirana to pick up dailies however, large retailers will work on the psyche of the customers by pushing bulk sales, weekly big purchases where customers will be groomed to buy in bulk to avail fantastic discounts. The kirana and the small retailer cannot bundle promo packs because it can’t deal directly with producers so naturally many a kirana stores will perish in due course of time, few might offer value added services like free home delivery, sales on credit, customized sales etc. However, many would be simply slayed by the giants.

In my opinion, without sounding harsh, it would be ideal for the Kirana’s to phase out or find opportunities to be part of the giant retailers supply chain ecosystem, this could give them long term business and ensure continuity in the retail segment.

Personally, I’m extremely excited at the proposed changes in FDI in retail. In principle, governments should not prevent anybody, Indian or foreign, from setting up any business unless there are very good reasons to do so. Hence, unless it can be shown that FDI in retail will do more harm than good for the economy, it should be allowed and it looks very much the case.

What’s your take on FDI in retail? Please do share your views would be glad to read them.

The Cbazaar story – Part 1

 
It was year 1997, the dot com world was pretty nascent, so was I. Having finished graduation and fresh into B-school, I was extremely excited about doing something on my own, though much to my family’s displeasure as I didn’t share the passion for the ancestral business.

In pursuit to do something new and electrifying, I tagged along with my classmate, Ritesh (Co-founder & COO, NATL) who shared similar sentiment and enthusiasm towards technology and innovation.

Buoyed by the success of an Internet café in Central Chennai, we both set out to kick start our own cyber café. However, even before it could fully take off out came the pivotal turning point of my entrepreneurial journey.  A train trip set stage for the biggest ever chain reaction in mind. I had picked up a magazine to kill time. The mag had done a cover story on Amazon, a successful dot com company set in the Silicon Valley, they also featured few desi dot com start-up's. I recollect the likes of bababazaar.com, an online grocery based out of New Delhi and muchadpaanwaala.com, a humble paan shop from Mumbai catering to connoisseurs across the world. By the time I had finished reading the article I knew this was the space I wanted to be in.

Back in Chennai, Ritesh and I brainstormed over the possibility of setting up our own dot com company and after series of astounding conclaves, we laid foundation to chennaibazaar.com, an interactive portal where we offered groceries, FMCG and utility services to the citizens of Chennai.

Our business model was fairly linear and it fit the ‘bootstrapping’ ideology which is now heavily glorified in the start-up circuit. For starters we raised capital from Family, set shop out of Ritesh’s home, struck deals with local wholesalers ( pay-per-order deals ). We picked orders online, bought the stuff from our vendors and door delivered, simple enough.

The most significant investments we made were on an internet connection (which was relatively expensive those days), a humble Bajaj M80 (rugged all terrain 2-wheeler) and a delivery boy (apparently he still works with us). We had no software pro’s, Ritesh and I built chennaibazaar.com from scratch and took turns to maintain the portal.

Managing chennaibazaar.com was no walk in the park, many a times Ritesh and I had to make deliveries, we travelled to the remotest parts of Chennai to honour the client's purchase. Call it austerity at start-up but we loved it, the charm of doing our own thing kept us going. Fluctuating prices was another pain in the neck, it jolted us quite regularly. We were also challenged by rejection of goods and trust me, reverse logistics is a complicated affair (but that’s for another post).

As the customer base increased things got busy, we were thrilled to receive media coverage and that was clearly the highest point for us. During this uptrend we discovered a killer service – Railway ticket reservations. We realized the latent demand in that segment, the hassles attached to railway booking led us to this discovery. We coaxed a railway reservation agent to team up with us, we took orders through chennaibazaar.com  which was basically an online version of the reservation form, EoD our team mailed the list to the vendor who in turn booked the tickets, and next day our man had them delivered. Railway reservation thing was an instant hit, created a buzz in the market and orders poured in.

However, the hype turned into tragedy when a team from southern railways came down hunting, we were asked to pull down the service (Indian railways was planning to come out with their own railway reservations portal). What we offered wasn’t illegal but we couldn’t put up a fight partially because we were naïve and didn’t want to get into legal hassles, so on that fateful evening we had to pull down the service and everything came to a standstill.

So, what happened to chennaibazaar.com? Did we find the next big thing? What was our next step? How did we beat the dot com bust and eventual slowdown in economy? To know more watch out for the next post.