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E-commerce in India: 'After sales service is a big issue'
In an e-mail interview with this citizen journalist, Vijesh Sharma, the founder and director of Done by None, an online apparel store for women, based in Gurgaon, shares his views on the state of the Indian e-commerce industry as well as his prediction about its future.

E-commerce or online shopping is the new way of shopping in India. It is allowing people to buy variety of products without taking the pain of commuting to bazaars or malls or haggling for better prices.

Online buying has allowed consumers to buy their favorite products at the click the mouse while sitting at their homes. Presently, there are more than a hundred virtual shopping stores in the country that allow consumers living in tier 1, tier 2 and tier 3 cities, big or small towns and in villages - to enjoy the quality of leading brands. E-commerce offers everything from electronic gadgets such as mobile, computer, camera, TV, clothes, books, kitchen appliances, furnitures, jewelery, cosmetics, and contraceptives.

The best thing in e-commerce is that the consumers get attractive discounts on every product they purchase. This is an additional gain apart from the facility of easy electronic shopping - from anywhere and anytime.

According to estimates, the Indian e-commerce market, which is still growing, is set to register some remarkable growth in the coming years with the online shopping industry likely to touch $34.2 billion USD by 2015. It seems India's large population base, changing consumer lifestyle and lack of infrastructure for bigger brick and mortar stores, is increasing opportunities for the e-commerce industry.

However, there are also challenges - mostly related to after-sale services such as delay in delivery, faulty products, ignored complaints, and unhelpful customer care executives as observed from social networking profiles of various e-commerce hubs.

How will you assess the present health of the e-commerce industry in India? Hasn't the industry witnessed a decline in investment in 2012?

Vijesh Sharma: We have been through a period of indiscreet investments into 'cut-copy-paste' global internet models, in the hope for a consumer adoption revolution. Consumer adoption has happened to a reasonable extent, but business models of e-commerce players still need a lot of evolution before they start making sense. So the health of the industry is good from a long term point of view, as the right set of consumers have started leading a change in their buying habits. However, businesses need to do a lot of rethinking on: supply chain, the eco-system for tech-based innovation, meaningful avenues for loyalty and growth, etc.

There has been a significant decline in overall value of investment in this domain, and is likely to stay that way for a year or maybe longer. That is triggering a chain of mergers, takeovers, shutdowns, etc. If there is a positive side to it, it is that e-commerce as an industry has started taking some steps towards maturity.

How do you see the future of e-commerce industry in the country?

Vijesh Sharma: E-commerce will have a significant role to play in shaping the future of retail. The specifics of that, however, are still pretty much up for grabs. The industry will remain dominated by a few large existing players for another couple of years, till the smaller smarter guys start to take their rightful place in the big ecosystem. E-commerce will not cut short the 5-10 year business building cycle to 2-3 years, as many thought it could.

So, the one's who stick it out, and create good consumer value will have a good chance for success in the future. I personally think that if the internet enables a lot of small young creative and determined entrepreneurs take off, that would be a huge value added to the business ecosystem of our country... but time will tell the real tale.

In which product segment is the e-commerce industry registering significant sales growth?

Vijesh Sharma: Apparel, travel, books and electronics, etc., are the usual suspects. People are trying a lot of other stuff such as grocery, and kitchenware. But there's no certainty of success. Opportunities could be the home furnishing and baby products space, which still has a lot of scope. Even niche stuff such as premium teas, and designer wear, etc., could hold potential for a startup entrepreneur.

What are the challenges ahead for the industry?

Vijesh Sharma: The biggest ones on an individual level are: how to make this business profitable, your brand distinguished, and yet grow rapidly.

At an industry level, the challenge is to attract more resources by showing stability and maturity of the e-business model. Another challenge is how to garner government support to enable the right taxation structure and infrastructure such as the US and China were able to do. Another big challenge is how to make the most of the currently piqued consumer interest and adoption, to expand the industry by leaps and bounds at a macro level.

Is 'after sales service' a big issue adversely impacting the credibility of industry players? During our research we have observed from consumers' posts on social networking profiles of some of the big names in the industry that consumer grievances are sometimes not been taken care of by companies.

Vijesh Sharma: After sales service continues to be a significant issue. Some progress has been made for sure in areas such as inventory management, and delivery speed, etc. But the way customer issues are handled still leaves a lot to be desired. Cleartrip and Flipkart have done some good work in that area. Just a few days back I got an email from cleartrip to check if I have received my cancelled train ticket refund from the bank. I had forgotten about it and was moved to see the attention to detail in their customer service.

How many players are there in the market today? Do you think the industry can accommodate more players?

Vijesh Sharma: There must be over 200 e-commerce companies in India today. The space for being the 'Amazon of India' and all is probably overcrowded. But that doesn't matter much for the smaller, more reasonable entrepreneurs who are investing for a 3-5 yr window trying to build a business that leverages the strengths of the internet. There is also a lot of space for players who bring in differentiated and well curated merchandise, and are willing to learn the ropes of the e-business. Look at the way Fab India's e-retailing business has grown in the last 2 years! The youth is very engaged with the web, and that creates a third window of opportunity.

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