10 major reasons for failure of online shopping in India

Online shopping is trending day by day in India by providing goods and services to the customers. India is the country where computer users are increasing so as the online shopping trends are also increasing. eCommerce solution provider India are also increasing at very high rate. Everyone wants to save money and time and online business offers both for users.

Online shopping has scope in India because it has begun in metro cities and targeted at youngsters. Also internet especially on mobile is available like never before. People are more concerned about the products that they buy and they can easily find and select items while sitting at home. But it is not growing in India at some level.

The following are the reasons for failure of online shopping in India:

India is a low credibility country: India is actually a low credibility country. We buy a five rupee pen without checking whether it is writing properly or not then how can we expect to buy costly items without seeing, touching and feeling it. This is the one of the reasons for being low in online sector.

Cost of customer acquisition is very high: Some of the online companies are spending money on TV advertisements when the customer is spending lot of time on internet. The money they are spending to make customer aware they exist. Normally an online company spends Rs.1000 to acquire a customer of Rs.400 but it is not really worth.

Logistics is a big pain: Cost of logistics is high in this country. People depend on logistic service providers. The problem begins based on the performance of service providers towards the customer.

Shopping in India is source of entertainment: when people go for shopping they window shop, they shop, they gossip and they walk. It is not an activity but they are having fun while shopping. But in online shopping the scenario is completely different.

COD rejection rate is high: No organization will accept the products if the customers don’t accept the orders placed by them but the market sources make it between 40-60% of price.

Poor product quality: Selling a low quality product is worse than selling an expensive product. Some online shopping sites are selling low quality products which reduce the traffic to the website.

Ineffective marketing: While hiring people they should choose who is experienced in the field of online marketing and also they should know the logics in implementing the ecommerce. Marketing is the effective tool for shopping sites.

Failing to change with times: The ability to recognize opportunities and responding to the changes is less. So many companies failed in developing new areas of expertise.

Vendor management: It is not possible to have everything in stock. Vendors in India will never be able to provide a synchronization system. And they will end up accepting order for items not in their inventory.

Underestimating the competition: Some business owners underestimate the reaction of the competition in their businesses. Any owner of existing business perceives a new entrant to the company will be taking away some of their customers. They could do this by introducing new products, improving product quality etc.  

Ref - eCommerce solution provider India

Why ecommerce is not popular in India?

eCommerce is currently in trend and reaching new heights everyday in India. The process of buying and selling products through the internet has become quite popular these days. Nowadays everyone is using eCommerce websites or online portals very efficiently and the websites are providing all goods and services according to the customer’s needs. Also it is more comfortable way of shopping. India is the second fastest growing economy in the world having great population and growing internet is high in India. The penetration of eCommerce is low in India compared to markets like the United States and the United Kingdom. eCommerce players are facing challenges due to some reasons. According to a recent survey conducted by DesiDime the following are the top 10 eCommerce websites in India.

1. Flipkart
2. eBay India 
3. Snapdeal 
4. Amazon India 
5. Myntra 
6. Shopclues
7. Dominos 
8. Freecharge
9. Jabong
10. Tradus 

Most of the websites are popular in India too. For example, irctc.com is the biggest success in ecommerce in India. It reduced the pain of an Indian. It has become easy to people to book tickets online.

The following are the reasons why eCommerce is not growing in India:

Logistics coordination: we cannot deliver everywhere all by ourselves. One day or the other we need to depend on the logistic service providers. The performance of service providers will determine the goodness that we create with the customer. Because of these barriers between the services providers and customers problems will arise.

Cash on delivery: Now this has become one of the good services for eCommerce companies in India. The logistic companies actually charge to collect cash on their behalf. They charge a huge amount depending on the provider, total items offered and also package value to use our cash. This totally degrades the unit of economics. 

Lost and damaged items: Business owners are not responsible for the lost and damaged goods which neither the service provider nor the customer will not be liable for. So, nobody will bear the burden of lost or damages inventory. This is risky when we are counting on low margins and huge volumes.

Marketing:  Marketing for an eCommerce company is a completely different game. It requires more of technical knowledge too. The best choice to keep someone who is experienced in the field of online marketing and also they should understand that it is not same as regular marketing. They need to know some tactics for getting traffic and sales on the site.

Vendor management: Every brand/manufacturer will have their own style of packing, billing and logistics. It is not possible to have everything in the stock. Vendors in India will never be able to provide a synchronization system. And they will end up accepting orders for items not in their inventory. So, lack of efficient vendor management is also one of the reasons.

Ref - eCommerce solution provider India

eCommerce myths busted

With the growth and popularity of internet over the years many e-commerce business solution have come in to market offering different products and services. For a normal person, the face of business is just a site which made them to presume is internet is an easy way to get going.

E-commerce website is the complete online business:

The most crucial misconception of many start-ups on e-commerce is that “setting up a good looking online portal with various products, shopping carts and payment options is the complete business”. However this is just a part of the online business process, many other internal processes should be setup for running a successful e-commerce business as detailed below.

1. Supply chain: A detailed plan on the flow of goods and services should be planned which involves product vendors, delivery management, financial transaction on the payments and settlements to vendors and payment receivables from customers. This also includes the plan for stock keeping models like Just in time etc.
2. Customer service: A well planned customer support should be established who should take care of the queries of customer and serve them better through all the channels over call centre, online chat and through social media.
3. Continuous research: Online business is very dynamic, business should offer customer specific, culture specific and regional specific services through thorough research. Offers like diwali specials, world cup special offers will help to boost the growth.
4. Be unique: Offer services which are unique to customers from your competitors like delivery on the same day, replacement offers etc.

Online payment is easy:

1. Online payment helps people to make transaction over various channels on the go after selection of products; however business should take utmost care on online payments as they tend to fall for online frauds like phishing etc.
2. Industry wide practices should be taken care on the payment gateway like ISO27001 certifications, PCI DSS compliance.
3. Transactions settlement: Business owners should have plan to keep their own payment gateway or outsources the same to payment processors and payment supply chain should be established (Banks – Customers – Business – Vendors).

Customers will automatically find our website for purchases:

1. One of the critical myths is that “customers will directly come to the site through search engines and visit the online store for purchases”. Similar to brick and mortar stores, marketing of the business should be performed, but in a different channel. “Web marketing” models should be initiated and some investment should be made to make the website reachable to customers like Google AdWords, advertisements in YouTube etc. A detail marketing plan is required to reach out the targeted customers like ad display though cookies etc.

Ref: eCommerce solution provider India