E-commerce is real and it’s happening

E & T,

There may be a nip in the air, but online entrepreneurs and mobile vendors sport a warm glow. It’s an assuring glow and the satisfaction stems from India Inc. Hundred million denizens use the Internet in India, and we are still counting. India is home to 800 million mobile subscribers.

This growing community has encouraged service providers, social media and entrepreneurs, besides attracting international players. Good news is that e-commerce in India will shape up like China. “When we look at China and the US, the US’ largest offline retailer versus the online is in the ratio of 5:1. It is the opposite in China and India will take the China route in the coming years,” said Anshuman Das, managing partner of executive search and advisory services firm Longhouse Consulting. He was speaking at TES, (Tie Entrepreneurial Summit 2011) Asia’s largest entrepreneurial summit held in Bangalore today.

E-commerce addresses the different layers of the pyramid. Kunal Bahl, CEO snapdeal.com, an online couponing company, described tier I city buyers as those who shop for convenience, while the tier II city consumers rely on the online medium for products, which are not available in offline stores. “In most mature markets, e-commerce contributes to 3% of GDP (gross domestic product). Right now, the India GDP is 1.7 trillion, which indicates that there’s scope for growth. The key aspects of e-commerce are value, assortment and convenience,” explained Bahl. However, infrastructure-related issues like logistics and user-friendly payments need attention while creating a business model. Price tag, which is crucial factor, has confused many start-ups, who are not sure whether to sell products at the maximum retail price (MRP) or offer a discount. This confusion can be sorted out through a proper eco system.

On its part, most businesses leverage the potential of the Internet medium. Arguably, mobiles offer huge business opportunities, seen as vertical specialization or horizontal skills. “You can build a 3D view of users and focus on specifics like geography. This is possible only through the mobile,” explained Rajesh TS Reddy, co-founder-CEO, July Systems, a leading provider of cross platform mobile solutions to businesses worldwide.

Most mobile entrepreneurs have created apps for the local market, before scaling up to the demands of the global consumer. “There are several opportunities for mobile entrepreneurs, which need to be tapped. For instance, as a facility music has reached a critical mass, while other facilities like payment, citizen services and entertainment need to be developed,” reasoned Mouli Raman, CTO and Co-founder, OnMobile Global Ltd, one of the largest white-labelled Data and Value Added Services companies for Mobile, Landline and Media Service Providers. A dedicated segment of mobile entrepreneurs localizes services and apps for rural India.

It goes to prove that small town folk and small and medium enterprises don’t hesitate to adopt technology. This is something Dinesh Agarwal learnt early in his career when he began IndiaMART.com, which has emerged as India’s largest online B2B marketplace connecting Indian suppliers with domestic and international buyers. “In 1996 when I started out, there were 500 Internet connections. The poor Internet connectivity was overcome by building a directory of exporters,” recalled Agarwal, looking back on his 15-year-old enterprise. This free listing, free enquiry service rolled helped build the business brick by brick, and the brand was reinforced through trade fair participation. When Internet happened in a big way, it led to direct sales. “By 2005, we had a 5,000 customer base and this resulted in a good entry barrier,” he added. It sure did, since IndiaMART.com is credited for setting a record of being profitable from day one, and this is something which no other online company in India has been able to emulate.

IndiaMART.com’s USP is that it offers products for small and medium businesses to generate business leads using online catalogs or storefronts. This helps establish their credibility through third party verified trust profile and use business information like finance, news, trade shows and tenders for their business promotion. Naturally, it’s paved the way for consistent success. “We have seen a compounded annual growth rate of 45%-50% since the last seven years,” Agarwal beamed. As a product building company, IndiaMART.com has one million SMEs in its customer base, of which 50,000 are paid customers. Over the next two years, the entrepreneur will service these customers and create a B2B community within one million. This will be developed into a community model, which will be replicated on the mobile.

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