Will Ecommerce Tick In India

Will Ecommerce Tick In India

The onus on Indian marketers to go online raises questions about the process, patterns and customer psyche involved in shopping, online or otherwise. 

ecommerce, online shopping

Gaurav
Chadha   mailto:Gauravc@niit.com

Jeff
Bezos of amazon.com dreams of selling everything through the internet. And so do
many Indian marketers willing to add the dotcom dimension to their businesses.
The question, however, is whether Indian consumers would like to buy everything
off the net. Before putting their businesses online, marketers should ask a
couple of obvious questions about the psyche governing the buying behavior of
Indian consumers. How many times do people take a prescription via wire even
from family doctors, or how many times do customers decide to buy a
plastic-wrapped item without touching, feeling and experiencing it. Sure, people
like me are not prone to the see-it-buy-it syndrome any more, but when it comes
to buying flowers for my sweetheart or ordering medicine for my ailing family,
perhaps I am a bit too old-fashioned. So, is ecommerce not going to take off in
India? Will consumers stay away from buying online?

Buying

Buying is a
decision-making process that tries to satiate consumer needs at various levels
and the factors that govern it primarily are:

• Product needs

• Information
  assimilation needs

• Experiential
  needs

• What-I-see-is-what-I-get

Consumers first experience a need
that drives their demand for the product or the service. In case of repeat
purchases, the consumer would know what to buy and decision making is relatively
simple and straightforward. However, in case of a first time purchase customers
must go through a series of informative cycles based on the importance and
urgency of the product. Information may be acquired from collaterals,
experiences of other users or customers, or advertisements. Just as lot of data
in analysis adds weight to findings, consumers tend to assimilate information to
feel confident and post their decisions. After acquiring information and short
listing couple of products, customers hop around number of establishments before
they finally shop.

In the hopping process, the
customer experiences the ‘moment of truth,’ wherein, either the customer
experiences the service–like the eye check-up at the surgeon’s clinic before
ordering for spectacles–or notionally experiences the product by touching or
feeling it. What follows is an evaluation of offerings that were short-listed
initially and some spur-of-the-moment selections too. Finally, the customer
decides to purchase or not purchase the offering based on the assessments after
notionally experiencing the offers. Back home with the product, customers try to
analyze if they got what they saw or experienced during interaction with the
merchant.

As is quite evident, the process
of buying is pretty complex, replete with instances in which the customer
experiences the product before deciding. Now, try doing this on the internet and
there are already people saying, "Well, this could be done partially."
So let us take a look at what can be done on the internet and where it falls
short.

_Selling

No doubt
that the internet is a virtual datamine as far as information is concerned. So,
as regards information assimilation needs of the consumer, marketers expect the
internet to do a good job of providing information to consumers. However, with
information littered all over this mine called the web, it is extremely
difficult to excavate the information without spending some time on the net.
Search engines, both generic and site-specific are the ultimate information
finders that act as the stores’ frontline staff providing information to
consumers. Artificial intelligence notwithstanding, search engines do fail to
fill the information needs of the online buyer. This is equivalent to
incompetent sales persons sitting on the front desk of a store trying to
configure solutions for the buyer. Usually, serious surfers who know their
business and want to quickly achieve results use search engines. An ineffective
search engine interacting with a serious surfer is a case of bad responsiveness
of the staff and results in the customer leaving the store undecided.
With too many such instances the consumer’s patience wears down even before
the information needs are satiated.

Some may argue that this happens
in real life too when the customer finally decides to stop hopping, and go for a
purchase. But relatively speaking, while shopping offline, customers decide to
buy the product or service as per their will. On the other hand, online
customers are forced to decide due to either too much data or the lack of it, or
perhaps due to poor response time from the website. Apart from this forced
decision-making that leaves them dissatisfied, customers are also expected to
make lot of assumptions about the product. For instance, while shopping online
for a t-shirt for myself, I was given three size options by the web store–small,
medium and large, leaving it to my intelligence to decide which size would fit
me. Of course, after applying my tired-from-surfing-brain, I conveniently
decided to close the web browser before heading to a nearby apparel store where
I chose the best fit t-shirt after a couple of trials.

Ecommerce

But, with
ecommerce doing well the world-over, as is the popular notion, why this
bickering? First, ecommerce is just the means to an end rather than the end in
itself. It may be one of the strategies a company follows and not the only
strategy. Returning to ecommerce doing well, marketers willing to add ‘e’ to
their businesses must remind themselves that the world’s biggest online
retailer, amazon.com just posted a loss of $720 million. More recently, one of
Hong Kong’s biggest retailer is reported to have snapped the wires on its
ecommerce venture indicating that online selling did not fit its strategy.
Instead of losing heart from these reports, Indian marketers should look at the
reasons for the e-business failing in some cases and doing well
elsewhere.

Losses to amazon.com
notwithstanding, ecommerce has progressed well in the Americas on two counts–faith
in technology and the brands. Faith in technology manifests from willingness of
the masses to use new technology as against traditional equipment. Just five
years back, purchasing a fully automatic audio system with a remote was
considered a bad investment. The logic being that automatic and miniaturized
systems such as those from Sony and Panasonic are very sensitive and would not
adjust to dusty Indian conditions. Also, automatic systems were considered too
complex to be handled by the local service shops if anything went wrong. Things,
however, have changed today, with consumer electronic majors pulling out all the
stops with VCD players, Digital TV with HDTV, and consumers replacing old age
TVs with the latest technology marvels. On the other hand, in contemporary
times, Indian customers are debating the pros and cons of the MPFi technology in
new cars. Not to say that Indians are in any way a technology-averse community,
but it does take time to gain faith in new technology.

Agreed that the internet was
never marketed commercially, but even the Americas have seen the internet for
ages before deciding to shop through it. With the internet mania raging like a
wild fire, it will require some pro-active steps from marketers before India
shops through the wire. This becomes even more debatable considering the fact
that TV shopping, which has been on for more than four years now, has never
really taken off in India. The reason for this slow take-off, as one consumer
quipped is, "In India what you see is not what you get, and hence I need to
touch it, feel it and experience it before I buy it." This fear psychosis
of a typical Indian consumer is further illustrated by the branding aspect.

_Brand

To a customer,
brand is a name that guarantees ‘something.’ Something here could equal
quality, value or any other perception factor that translates into customer
satisfaction. Buying branded apparel from Park Avenue, for instance, assures the
customer of quality fabric. However, brands such as Park Avenue, Raymonds and
Tata are not just built overnight. A symbol or a trade name becomes a brand
after customers experience the quality of the product or a service repeatedly.

One of the basic fundamentals as
far as brand building is concerned is consistency. Consumers feel easy and
relaxed while purchasing brands since they feel confident about the product due
to its consistent attribute as compared to a non-branded product. This adds to
the fact that just like a typical market scenario, convincing a consumer to
purchase a brand is easier when selling a product via the net. Marketers, thus,
need to ensure that their brands are in sync with the minds of consumers before
they are online. This takes care of two issues of consumer behavior during
online shopping–’Am I getting value for money’ and ‘Do I finally get
what I see.’ While buying brands, online or otherwise, consumers feel
confident about their buying decision and seldom show post-purchase dissonance
typically related to price-performance or value-for-money judgment–the same
lady who haggles at Janpath would never be seen haggling at a Levis store!
However, the most important contribution of branding is by way of assuring
customers that what-they-see-is-what-they-get.

Brand image

Coupled with
faith in technology, brand is perhaps the biggest force behind online buying and
selling in the US. Marketers in the US such as amazon.com can think of selling
everything from cars, bicycles, crockery items to grains and pulses via the
internet as almost everything has been branded. However, looking at the Indian
scenario would tell Jeff Bezos that it is a different kettle of fish where
Indian markets and consumers are concerned. Branding in India is largely
restricted to either high-touch goods like apparels or FMCG, or high-tech
products such as automobiles. With organizational focus on quality being far
from paramount, customers experience inconsistent units in branded products
also. This forces them to opt for interactive shopping, looking for more options
and experiencing products before taking them home, even in a repeat buying. In
addition to slow technology adoption, lack of confidence in brands is another
challenge online marketers face.

Beyond brands is a point of
confidence in brands. The confidence in a brand is also shaped by the protection
that consumers get in the form of their legislative rights. Consumers in the US
can return the merchandise after 30 days of purchase with no questions asked.
Although Indian consumers are also blessed with the same legislation, it is more
on paper than in practice. More than anything else, this is one area where
online marketers would find it hard to convince the prospects. When I cannot
trust a person even after interfacing with him or her face to face, can I trust
a website with an obscure progeny?

The last word

With such a
consumer mindset, marketers selling online would be required to answer who
are they. So, selling online may have advantages such as better inventory
management, low set-up costs and so on, but the challenges are even harder. The
challenge lies in building faith in technology where the consumer feels at home
or rather at ‘store’ while on your website. The challenge is to create a
brand that customers can relate to and are confident to buy without the fear of
ordering silk and getting linen instead. The challenge for marketers then is to
focus their efforts on building the necessary environment and relationships with
the customer before getting them to shop online. Then, perhaps, Mr Bezos can
fulfill his dream of selling everything through the internet, in India.

Gaurav
Chadha Associate Consultant Learning
Technologies Business, NIIT