Is India Ready For Ecommerce?

gust-1.jpg (7678 bytes)For e-biz to become prevalent in India,
we need to address the infrastructural and cultural constraints.

The internet has existed since the 1970s.
But 99% of the internet-cognizant population has become familiar with it only as recently
as the past six years—driven entirely by the advent of the world wide web (www). The
web is probably one of the most exciting phenomena in recent times and has the potential
to change how we lead our day-to-day lives, through the much-hyped business to consumer
(B2C) ecommerce wave. The deployment of ecommerce applications can provide an organization
with significant benefits in reaching new markets, reducing costs, improving cycle times
and enhancing service levels. In fact, in many parts of the western world this is already
happening. However, in India, though the promise and capabilities of the technology are
already in evidence it is still a long way to go before these become common-place for a
number of reasons.

There are probably already a dozen or so
B2C ecommerce sites in India at present. Ranging from general purpose sites
(www.rediff.com) to specific sites that will let you order your groceries
(www.home-land.com, www.bababazaar.com ), buy cinema tickets (www.clicktickets.com), real
estate property listing services (www.indiaproperties.com), to a site that will even
(supposedly) enable you to buy an automobile via the internet! However a number of things
have to happen before it can be heralded as the dawn of a new era in India. There are a
few pre-requisites related to the social environment that have to be in place which we are
still far from achieving.

SANCTITY OF CREDIT CARD
TRANSACTIONS:
Most of us would be skeptical in giving our credit card numbers
across the web. In India, concern for and attention to security is still in its infancy
and any transactions on-line involving credit card numbers is not likely to be entirely
secure.

NOT YET LEGAL: The
validity of a card transaction without a physical signature is still in doubt. There is no
regulatory ruling that has come out in this regard. The default at this point is that an
on-line credit card transaction could still be considered invalid without a signed
credit-card slip.

NO CLIENT-SERVICE FOCUS: B2C
ecommerce needs customer service par excellence to really ‘hook’ consumers and
get them to come back repeatedly. For example, anyone who has purchased a Dell computer
on-line would probably never acquire a computer any other way! This mind-set is only now
emerging in India and the pace at which it becomes ingrained in our culture will directly
determine consumer confidence in ecommerce.

GENERAL LACK OF TRUST: When
there is a general lack of trust in even a local merchant’s credibility and quality
consciousness, this concern will be exponentially greater while dealing with a faceless
remote entity.

NO RELIABLE DELIVERY
INFRASTRUCTURE:
In cases where physical delivery of products is concerned online
transactions need to be anchored by highly predictable and reliable delivery mechanisms.
The track record in this area has been inconsistent at best and is nowhere close to the
levels that will garner customer confidence.

CULTURAL FACTOR: The
existing culture does not facilitate the purchase of ‘unseen’ things.

POOR PC PENETRATION: With
PC penetration at about 0.1 computers per 1000 people and internet penetration that is
even lower where are the shoppers going to come from? If an Amazon.com with its access to
consumers using the best infrastructure in the world is still to show a profit, will
Indian merchants be patient enough and wait it out for the long haul?

While the inexorable march of technology
will no doubt continue, innate human resistance to change is what will determine the pace
of its acceptance in India. Will we embrace technology-driven change as fervently as
‘netizens’ in other parts of the world have?

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