“Indian ecommerce will take long to reach maturity,” says eBay India’s MD

eBay India’s MD, Latif Nathani, spoke to a leading newspaper of India about eBay’s presence in India and the challenges faced by it, and other issues related to the Indian ecommerce industry. Below article is based on the interview with him.

Global ‘big daddy’ of ecommerce, eBay entered India about a decade ago with the acquisition of Baazee.com. Elaborating on this, Latif Nathani, eBay India’s MD, said that the evolution of ecommerce in India happened over a period of 15 years – prior to eBay’s entry, organized retail had just gained momentum the past five years. Whereas, advanced markets like US took about 50-60 years to reach this stage.

Today, ecommerce has evolved significantly with various aspects like TV shopping, online shopping and mobile shopping being the latest, all part of what we broadly refer to as digital commerce. In a span of 15 years, India went from big-box retail to catalogue shopping to TV shopping to internet and now mobile shopping. With the current 55-60% per year pace of growth, Indian ecommerce industry will increase from $2.1 billion (in 2013) to $3.2 billion (in 2014).

Challenges of the Indian Ecommerce industry

In advanced markets, ecommerce was more quickly accepted and adapted to because people already had credit cards and were exposed to TV and catalogue shopping. Whereas, much of it in India is still new and most people are still getting exposed to it and discovering it by the day.

With an addressable market size, the Indian ecommerce industry now has approximately 200 million internet users with about 89 million visiting and exploring online shopping sites.

• Only a negligible percentage of people, 14-15 million actually make purchases. eBay India tries to take care of this by associating with as many sellers as possible spread out and even from remote areas so that customers have more options at cheaper and affordable rates.

• Infrastructure challenges. eBay India works with the government and industry bodies and has fine tuned operations to overcome the glitches, so that maximum customer satisfaction is always on priority. Powership service is in line with the effort to overcome logistics challenge.

• Trust challenges. eBay India has taken multiple efforts of its own to win over the trust of customers and gain credibility. Paisa Pay and eBay guarantee ensures customers that they will get full refund or replacement for upto 30 days in case of a problem with the purchase.

Ecommerce and India’s growth

Ecommerce is the future of India. Along with providing shopping options for customers, it also simultaneously gives livelihood to a lot of people who would otherwise probably not be able to trade or sell goods they made.

For example, a 24 year old from Dharavi (in Mumbai and largest slum of Asia) makes leather jackets and sells them through eBay platform to customers from 30 countries worldwide.

30,000 sellers cater to India customers through eBay India and 15,000 sellers from India cater to global customers.

Largest markets for Indian eBay sellers, other than domestic markets

eBay is a trusted marketplace where sellers list their goods and more than 128 million customers make purchases worldwide. Facilitating the entire transaction, once a product is listed, there is discovery when customers find what they want. Various payment options are given and to uphold trust, trustworthy logistic providers are tied up with.

The 30,000 sellers catering to Indian customers sell on an average across 19 states with about 83 percent of it being shipped across states, thus a small seller is able to expand reach across state borders without having to physically move around to each place.

eBay’s biggest markets are US, UK and Australia; Russia and Australia being the fastest growing markets. Mobile shopping accounts for 1 purchase in 44 seconds. Someone in the world purchases from an Indian eBay seller once in 11 seconds. In India, 16 products are sold in one minute.

Factors determining success in the Indian scenario

• Understanding the customer is of utmost importance. Paisa Pay was developed by Indian employees for the Indian market. It is not used anywhere else in the world.

• Gaining trust is difficult, yet essential. This will come based on experience and flawless operations, resulting in maximum customer satisfaction.

Changes in the ecommerce market

Like any market that inevitably evolves, ecommerce has a lot of players that come in at different points and then consolidations happen. Players have different and individualistic niches. Companies identify a very narrow niche and enter it, compared to horizontals or marketplaces.

Consolidation is hard to predict and is based on factors like business model, profitability and funding.

Although the Indian market is huge, maturity is still a long way. India’s internet penetration of 12 percent is amongst the lowest compared to other BRIC countries.

Barriers hindering ecommerce growth in India, apart from internet

• Regulations of some states hinder the ecommerce experience. For example, some states require buyers to fill a form and send to sellers before the purchased products can be shipped.

• The 15,000 odd micro multinationals who are artisans make handmade products and sell through eBay, bring valuable foreign exchange into India. But they are not recognized as exporters as they don’t do bulk exports.

• Trademark exhaustion is an industry issue that should be immediately taken care of. Someone procuring a product legally outside india cannot sell in India as it is considered violation of the brand.

Note to Indian Online Seller

Take advantage of eBay India’s platform to start selling your products to customers across India and globally if eligible. eBay recognizes the challenges of the Indian ecommerce industry and have taken steps to ease out glitches where possible, Paisa Pay and Powership being testimonies to that.