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Ala-Kart-e

A brief research on the indian and the global e-commerce scenario .. which may serve as a starting point for understanding the basics but important aspects of an E-commerce business startup.
by

Tushar Swarnkar

on 2 May 2013

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Transcript of Ala-Kart-e

Ala-Kart-e
Indian e-commerce market hosted US$3 billion of transactions in 2011 (Source: IAMAI)
It is forecast that more than US$20 billion worth of transactions will be carried out online over next five to seven years in India and 12-15% of the country’s shopping activities will move online. (Source: IAMAI)
A total of 9 million Indian internet users carried out online transactions in 2011. This number is predicted to reach 38 million by 2015. (Source: Avendus)
India’s B2C market is expected to grow at a CAGR of 34.2% between now and 2015 (Source: Emarketer)
Online retail sales will reach US$2.4 billion (excluding online travel) in 2012, with the number of online buyers in the country expanding to 21.5 million (Source: Emarketer)
In November 2011, approximately 60% on Indian online users visited retail sites, with 7.6 million and 7.1 million users visiting coupon and consumer electronics sites respectively (Source: Comscore)

The penetration of e-commerce is low compared to markets like the US and the UK but is growing at a much faster rate with a large number of new entrants. The industry consensus is that growth is at an inflection point with key drivers being:

Increasing broadband Internet (growing at 20% MoM) and 3G penetration.
Rising standards of living and a burgeoning, upwardly mobile middle class with high disposable incomes
Availability of much wider product range (including long tail and Direct Imports) compared to what is available at brick and mortar retailers
Busy lifestyles, urban traffic congestion and lack of time for offline shopping
Lower prices compared to brick and mortar retail driven by disintermediation and reduced inventory and real estate costs
There are 27 million smartphone users in urban India – a total of 9 per cent of the entire mobile user base in the urban demography.
India is considered to be one of the fastest growing mobile markets with around 900 million mobile phone users, according to TRAI estimates.
The country’s mobile handset market witnessed 6 per cent growth in the first quarter of 2012 while the smartphone market in the country surged by 17 per cent, says market research firm Gartner The Market "The power of me-commerce" Facts Globally:
Mobile commerce will increase at a rate of 65% annually to reach $24 billion in 2015. (Coda Research)
mCommerce grew about 150% to 200% last year. (TBI Research)
Active mobile banking users in the US will grow from 10 million in 2009 to 53 million by 2013 (TowerGroup)
mCommerce will be bigger that eCommerce within 5 years. (Huffington Post)
In 2015, $119 billion worth of goods and services will be purchased via a mobile phone. (ABI Research)
The market for mobile payments is expected to quadruple by 2014, reaching $630 billion in value. (Juniper Research)
20% of all consumers and 32% of 18-34 year olds are researching purchases via mobile at least monthly. (ATG, Inc.)

Key Findings by Nielsen Informate Mobile Insights
Smartphone users in India are using their phones for more than 2.5 hrs per day, of which communication (calls, SMS, emails) accounts for only 28% of usage
Younger Smartphone users (15-25 yr olds) spend more than 3 hrs per day on their phones and spend 60% of the time on entertainment & browsing e.g., gaming, surfing the net and multimedia
68% of 15-24 year olds used a chat app last month as compared to 42% for the 31+ year olds
Data usage for 3G users was close to 44% more than 2G users
An Android user installs an average of 19 apps in a month compared to 10 apps for a Symbian user
84% of Android users played a game in the last month compared to 59% for Symbian users
Mobile shopping research and statistics offers an in-depth look at mobile devices; including smartphones, iPads and tablets.
The most common mobile shopping activity is researching products and comparing prices, which 15 percent of mobile phone owners now do every month. (Source: Experian Simmons; 2011 Mobile Consumer Report)
48 percent of mobile owners surveyed had made a purchase via their mobile phone. Although mobile shopping was most popular with 18-34 year olds, more than one third of respondents aged 55+ also made a purchase via mobile. (Source: Lightspeed Research; Mobile Shopping Revolution)
Males 30-49 years-old tend to be the most active content consumers and mobile purchasers; men outspend women, with 31 percent having spent $499 or more through their mobile device in the last 12 months, versus 23 percent of women who did so. (Source: Adobe Systems, Omniture; The Adobe Mobile Experience Survey: What Users Want)
30 percent of tablet owners have used their device to shop online, while currently only 25 percent of smartphone owners have used their phone to do the same. (Source: eDigitalResearch; eCustomerServiceIndex)
In 2015, shoppers around the world are expected to spend about $119 billion on goods and services purchased via mobile phones. That number represents about 8 percent of the total ecommerce market. (Source: ABI Research; Mobile Commerce Study)
In the United States, purchases attributed to mobile online shopping -- excluding travel -- grew from $396.3 million in 2008 to an impressive $1.4 billion in 2009. In 2010, mobile online shopping excluding travel in the U.S. had more than doubled again, to total more than $3.4 billion by year’s end. (Source: ABI Research; Mobile Commerce Study)
Apps and music are the most common purchases, followed by clothes and electronic books. (Source: Lightspeed Research UK; m-commerce prepared for Figaro Digital)
Consumer usage of mobile coupons will see users exceed 300 million globally by 2014. (Source: Juniper Research; Mobile Coupons & NFC Smart Posters)
The study of more than 1,400 consumers shows more than half of consumers use their smartphones to enhance their shopping experience, especially people under age 35. (Source: Chadwick Martin Bailey; How SmartphonesAre Changing the Retail Shopping Experience)
Retailers report that 21 percent of all mobile traffic comes from tablets; amazing considering the iPad was launched barely a year ago. (Source: Forrester Research; The State Of Retailing Online 2011: Marketing, Social, And Mobile) Mobile Commerce Shopping Research & Statistics (2010 - 2011)
Mobile payments (m-payments) are when consumers make a purchase using a mobile phone instead of using cash, credit card or debit. Types of mobile payments include direct billing, SMS transactions and mobile Web payments. These mobile commerce research and statistics will help you understand what’s happening in the mobile payment industry.

Worldwide mobile payment volume is forecast to total $86.1 billion, up 75.9 percent from a 2010 volume of $48.9 billion. (Source: Gartner Inc.; Market Trends: Mobile Payments Worldwide, 2011)
PayPal raised its 2011 Mobile Total Payments Volume (TPV) projections to $3 billion. (Source: PayPal Blog; PayPal Doubles Mobile Payments Predictions to $3 billion in 2011 by Laura Chambers)
Overall, mobile payment services are expected to reach $245b in value worldwide by 2014. At the same time, mobile money users are expected to total $340m, equivalent to 5 percent of global mobile subscribers. (Source: Ernst & Young; Opportunities for telcos in mobile money: 2011)
E-payments and m-payments collectively accounted for an estimated 22.5 billion transactions in 2010. E-payments (online payments for e-commerce activities) are expected to grow globally to 30.3 billion transactions from 17.9 (in 2010-13), while m-payments are expected to grow globally to 15.3 billion transactions from 4.6 billion in the same period. (Source: Capgemini; World Payments Report 2011)
It is anticipated that this will begin to change in 2011 as the number of mobile payment users starts a significant run up from 116 million to over 375 million in 2015. (Source: In-Stat; Mobile Payments: Is the Market Ready?)
The potential for mobile payments is huge. Estimates for the volume of those transactions vary widely but share a consensus that mobile payments will see sizable growth this year and accelerate rapidly in 2012. (Source: eMarketer; Mobile Payments -- Moving Closer to a World Without Wallets) Mobile Commerce Payments Research & Statistics (2010 - 2011) Potential of m-commerce • According to an eBay study, Mobile Assisted Commerce (MAC) is set to come to the mainstream in India in 2012. With reductions in smartphone prices and increased 3G penetration, m-commerce is set to increase.
• eBay Inc clocked in revenues of 5 billion dollars globally from m-commerce in 2011 and expects to hit the 8 billion dollars mark in 2012.
• A study by digital news website, Mashable, says that 47% of smartphone owners and 56% of tablet owners plan to purchase more products on their respective devices in the future
• Benefits of mobile shopping
Anytime, anywhere shopping
Location based services
Enhanced in-store services
• Top mobile markets
30 percent of the world’s mobile users live in India and China. As of March 2012, there are now more than a billion subscribers in China, with India not far behind. Both dwarf the number of subscribers in third place USA.
China: 1,023.7 million subscribers – 76 percent of population – in April 2012 (see table below for operator breakdown), 159.3 million of these are 3G users.
India: 919.2 million subscribers in March 2012 (TRAI, May 2012) – 75 percent of population. 65 percent of mobile subscribers are urban dwellers.
USA: 331.6 million subscribers (105.8 percent of population) in November 2011 (CTIA).
• Shopping on the mobile Web, i.e. m-commerce will reach US$119 billion in 2015, predicts ABI Research(February 2010), that’s about 8 percent of the total e-commerce market:
Today, Japan is king of m-commerce, where mobile Web shopping exceeded US$10 billion in 2009, making the US$1.2 billion bought in the US by mobile look trifling.
M-commerce in Europe is expected to outpace the US by the end of 2010.
Long-term growth in m-commerce will come from developing nations where mobile is virtually the only way to access the Internet. m-commerce Process 1.Mobile Shopping (Provide the best experience of mobile shopping)
a.Secure mobile Website
b.Applications for all major platforms-Android/Apple/WindowsMobile/BB
c.Applications/online-portal support for multiple devices - PCs, tablets,smartphones.
2.Have a self-managed distribution and logistics
a.Better control of logistics.
b.Better customer service
c.High product availability
Delivery tracking
3.One day shipping for major locations.
a.Not offered by Flipkart/e-bay/Junglee
4.Have a feedback/ review system for products linked to product manufacturers.
a.An option to attract suppliers
b.Serves as a secondary marketing research tool for manufacturers.
5.Multiple payment options
a.Cash/ Card on delivery
b.Online payment
6.Offer product combinations at competitive pricing.
a.User customizable combos. E.g.- Fridge + Microwave, Mobile + Headphones Features of Ala-Kart-e 7.Offer options for corporate orders / bulk ordering with special tie-ups with the major suppliers.
a.Minimize buyer effort and time for purchasing in bulk.
b.Ala-Kart-e will coordinate all the essentials with the suppliers and manufacturers.
8.Set up customer care centers
a.Online and Offline / physical centers for personal query resolving.
9.Simple and efficient user-interface
a.Intelligent product recommendation engine with a customer-optimized notification system for e-mail / SMS alerts.
b.Dynamic Personalization
c.Easy navigation and effective product search
10.Rewards and loyalty programs.
11.Social Network Integration
12.Location-based tie-ins: The GPS capabilities of mobile devices usher in a new era of exciting location-based cross-channel promotion capabilities. Examples include promoting products that were shopped for online when the shopper is in proximity to a physical store, pushing promotions available at nearby physical locations, and providing interactive directions and pickup and availability notifications for previously viewed items. Apps like Foursquare allow you to extend your reach by pushing promotions and specials and rewarding repeat shopping. •Building a customer base
Getting customers across age groups
Building trust for purchasing high priced goods online
Getting smart phone users to shop on mobiles – penetrating the mobile shopping market
•Customer retention and Loyalty
•Differentiation
•Having the right product mix
Making products available which are not easy to buy offline e.g. limited edition books, music labels etc.
•Maintaining price leadership
Offer the best prices with the highest levels of customer service
Costs Involved:
•Marketing Research Costs
•Website development and maintenance cost
•Hosting and Data Security Cost
•Marketing Costs
•Product delivery cost
•Payment Gateways charges
•Trust Building costs Challenges
Top 10 E-commerce Companies (India)
1.Flipkart.com
2.Snapdeal.com
3.Fashionandyou.com
4.Myntra.com
5.Inkfruit.com
6.Dealsandyou.com
7.eBay
8.Homeshop18.com
9.Infibeam.com
10.99labels.com Competition Cluttered pages
Internet wide search features
Advertising on product pages
Lousy UI for specialised product categories
Lack of integration sites
Co- branding Issues - Amazon Issues - ebay The top ten things that sellers are frustrated with about eBay:

1. Management
2. Feedback Policy
3. Small Businesses Get Shut Out
4. Lack of Communication
5. Payment Policies
6. Fees/Lack of Profitability
7. Unwarranted Account Suspensions
8. The Buyers Themselves
9. Glitches
10. Lack of Innovation

Issues with buyers:

1. Unhelpful customer service
2. PayPal is less consumer-friendly than Amazon’s payment system
3. Lots of counterfeit merchandise.
4. Lack of focus on unique merchandise
5. Bad management choices Product Price: 79%
Ability To Purchase Online For Home Delivery 63%
Ability To Get Product Within A Day Or Two 55%
Ability To Purchase At Local Store 45%
Ability To Purchase Online And Pick Up At Store 37%
Advice/Reviews From Peers On Website 33%
Reward/Loyalty Points That Are Tied To Making Purchase 33%
Supportive Content Supplied By Retailer 31%
Word-Of-Mouth Advice From Friends 26%
Advice From Online Communities/Social Media 15% INFLUENTIAL FACTORS DETERMINING PURCHASE Consumer buying behavior analysis for e-shopping (PCs/mobiles) in the Indian market.
Time spent online
Time spent on a particular website
Conversion ratios
Customer Retention
Number of goods purchased online
Industry Landscape
Vertical markets
Competition – Physical and Online stores
Product specific market research
Category of products people prefer buying online Research Recreational Orientation
Window-shopping is pleasing
Like to shop and look at displays
Shopping is never boring
Experiential Orientation
Like to see and touch products before buying
Hate buying without seeing
Like to try before buying
Convenience Orientation
Cant wait in long lines for checking out goods
Time saving is very important
Shop at any time of the day
Economic Orientation
Consider a wide selection before buying
Being a smart shopper is worth the extra time it takes Communication utility
Wide selection of goods
Updated info
Quality info
Distribution utility
Ease of exchange and returns
Prompt access of goods purchased
Post-purchase service
Security of payment means
Pre-purchase inspection
Accessibility
Effort for using
Degree of interactivity
Convenient accessing
Ease of info customization Factors to consider The basics of e-commerce purchase behavior from Gartner Predictive Markets is an intriguing new approach to screening early stage concept, claims and positionings which more effectively sorts wheat from chaff, helping companies say no to ‘deeply average’ ideas, ensuring only strong ideas are progressed, thereby reducing the time and money required to get successful innovation to market.
The challenging supposition behind Predictive Markets is that a large diverse group of people [a crowd], buying and selling notional shares in ‘ideas’ can predict what other people will do, just as accurately but with far greater discrimination than traditional gold standard concept testing approaches with scientifically sampled target audiences.

Why predictive markets:

1. As accurate as Monadic testing: Predictive Markets have picked out the same top quartile concept winners as gold standard monadic concept testing.
2. More discriminating than Monadic testing: Predictive Markets separate good from average ideas with far greater discrimination than conventional monadic concept testing.
3. Identifies potential breakthrough ideas: Predictive Markets ensure companies don’t miss polarising ideas with low average scores that might have breakthrough potential.
4. Comparable across markets and categories: Predictive Markets achieve very similar scores across countries/categories, removing the need for normative databases at the individual country level. Research Methodology e-commerce 1. In 2010, nearly 179 million consumers ages 14 and older researched products online.
2. The sales of the top500 e-commerce grew from 127.1$ Billion to 150$ Billion in 2010.
3. Online retailer is the fastest sales channel with an improvement of 18%
4. Like every year Amazon is the biggest e-commerce out there with 34.2$ Billion in 2010.
5. E-commerce grows several times faster than store sales.
6. The accelerated adoption of customer reviews indicates a more enlightened approach to handling negative comments—that is, occasional negative reviews do not hurt sales.
7. 7 out of 10 Internet users are online shoppers.
8.Despite the uptick, Toolup.com ranked as the 2010 looser with a growth of -30.56%.
9.Social media has become standard practice for e-commerce merchants. An astounding 86% have Facebook pages, 37% have a Twitter account and 63% have a YouTube channel.
10.Think mobile. mCommerce is changing the rules.
11. 90% of people said reviews have an impact on their decision; 60% say they’re the most important factor.
12.Email is still alive & well! 96% of the top retailer offers e-mail programs in 2010.
13.Search still reigns. 9 of 10 retailers say that search engines are the biggest source of traffic in 2010.
14. Customer reviews are significantly more trusted , 12 times more than descriptions that come from manufacturers.
15.¾ of the online customers are on social platform. 50% of follow an e-commerce on Twitter/Facebook.
16.The big keeps getting bigger- the top 100 e-retailers grew by 18.8% to 129.4$ Billion in 2010.
17. Men are more likely to spend on group buying than women.
18.Next to price, the first thing a person looks at is if you offer free shipping.
19. The merchandise category with the biggest growth is Accessories.
20. 60% of online shoppers check Amazon for price comparisons & product reviews before purchasing from other online stores. Facts-2011 source:http://www.fortune3.com/blog/2012/02/influential-factors-determine-purchase-product-ecommerce/ What products? Which site? For concept testing: Creative Consumer focus groups help us understand why consumers, voters, and donors make certain choices and exhibit certain behaviors. Well orchestrated focus groups – led by innovative moderators speaking to motivated, interesting participants – can uncover profound insights that change the course of brands, help create new products and services, and provide the language to communicate your company’s essence to the consumer.

Productive focus groups require synergy between skilled writers, organizers, listeners, and communicators to be effective – without these pieces, focus groups can be chaotic, biased, and often lead to inaccurate conclusions. We’ve take pride in our qualitative work, and have put together the research world’s most unique focus group team to lead your discussion sessions:

Truly Unique Moderators: Skilled moderators have one talent in common; they are all exceptional listeners, able to formulate the next question intuitively based on their ability to grasp the true intent of the respondent. Where are these skills acquired? For some, in academic settings gaining anthropological PhDs; for others, in the world of journalism, conducting interviews in the hallways of Columbine and the desert sands of Iraq. Our moderators have real world communications experience that’s unseen in research – it’s what drives dynamic discussions. The StreetSmart Recruit: Focus groups are only as effective as the participants engaged; when they are recruited from a database of professional respondents, the quality of discussion declines precipitously. Kelton recruits fresh participants from social networking sites, from the streets of major American cities, and from restaurants, airports, car dealerships, and by going door to door. It’s what has made our recruiting the most accurate in the business – and allows us to reach virtually any demographic.
Innovative Techniques: Our moderators are equipped with a broad array of innovative techniques, which means the groups are set up to flourish from the outset. But it also means we can shift on the fly – employing new methods to meet the changing dynamics of a discussion; we’re able to fit the technique to the issues at hand.
Creative Discussion Guides: Focus groups should be interesting and enjoyable for participants – and that requires discussion guides that ask provocative, appealing questions. Our team of project leaders excels at getting every group engaged and interested from the outset.
Compelling Writers. All effective research requires a compelling deliverable that clearly articulates what has been learned, effectively lays out the appropriate next steps, and leaves the client holding real value in their hands. Our team of writers – who have written for print, radio, business, academia, and have published books – creates engaging deliverables that your entire team will appreciate, regardless of whether they were active participants in the research. http://www.brainjuicer.com/xtra/Predictive_Markets_-_2009.pdf http://keltonglobal.com/research-methods/capabilities/qualitative-consumer-insight Marketing Blogging
http://www.convertwithcontent.com/5-reasons-blogging-is-the-new-seo/#
SEO (Search Engine optimization)
http://kaiserthesage.com/seo-strategies-for-ecommerce-websites-2/
Word of Mouth
Viral
Email / SMS
Affiliate Marketing
Pay Per Click on Google
Mainstream media – TV, Newspaper Preferred Medium Recommendations from friends and family retains the number one spot as the most trusted form of advertising in India, according to the latest study from Nielsen, a leading global provider of information and insights into what consumers watch and buy.
Online Consumer Reviews is the second-most trusted form of advertising, beating even brand websites and traditional forms like television and newspapers ads.
Advertisers need to think out-of-the-box to come up with new ways to increase brand visibility online and use the top two categories – word-of-mouth and online consumer reviews
Nielsen’s Global Trust in Advertising Survey of more than 28,000 Internet respondents in 56 countries shows that while nearly half (47%) of consumers around the world say they trust paid television, magazine and newspaper ads, confidence declined by 24 percent, 20 percent and 25 percent respectively since 2009.
Brand websites and editorial content such as newspaper articles maintain their place in the top five with 75 percent each. But when it comes to brand sponsorships and outdoor advertising including billboards, only 55 percent said they found them credible.
Thirty-six percent of global online consumers report trust in online video ads and 40 percent say they believe ads viewed in search engine results. Sponsored ads on social networking sites are deemed credible only by 36 percent of global respondents.
In India, the numbers are higher with 48 percent online consumers trusting online video ads and 52 percent believing ads viewed in search engine results. Sponsored ads on social networking sites fare better with 54 percent of respondents trusting this form of advertising.
Clocking just 43 percent, text ads on mobile phones, continue to be the least trusted form of advertising by Indian respondents. The performance is marginally better when it comes to display ads on mobile devices, which saw 47 percent trusting this form of advertising.
When considering ad relevance, once again, word-of-mouth from acquaintances and online consumer reviews top the list with 92 percent and 82 percent respectively. Editorial content like newspaper articles which 87 percent of respondents trusted as a form of advertising in 2009, saw a decline with just 71 percent believing in its credibility.
In this category too, display and text ads on mobile devices fared the poorest with just over 50 percent trusting them. Inferences Effective Digital Marketing Campaign Need for digital How? unit: value x 1000 visitors per month Scale is important Hi. I plan to build a e-commerce website. Let's c what I have to start with ....
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