Window Shopping Out, Web Shopping In - Redefining Indian Way Of Shopping

Published by MBA Skool Team, Published on September 24, 2012

It is November, and yes, it is Diwali time. Raghu, an investment banker is thinking since a long time about buying gifts for his parents, sisters and wife. Given his tight schedule and late working hours he is not able to find much time. Diwali is just 10 days away and he hardly has much time. Being well read and tech savvy he is abreast with the latest mushrooming of several online shopping sites. But to go with that option he first wants to weigh the odds for and against it. “Don’t go for online shopping, they have extended wait periods, payment problems, high shipping costs, size mismatches, no order tracking system, poor customer service and no returns policy” he remembered his colleague Prashant saying this.

The potential problems which he thought of were irrelevant in the current context. In fact after just logging into the search engine after a couple of searches; he was automatically suggested a few good sites. He himself knew a couple of sites like and JABONG which his friends used quite frequently.One night, a week before Diwali he just browsed through the sites. He found them indeed very useful. They addressed all his concerns and reservations about the e-commerce model.

First, they helped him get access to a large variety of items which he could gift and would not have thought of if he had visited a retail outlet or a specific showroom. Second, he was able to browse through the sites at leisure at 1 AM in the night after he was done with his work and dinner. Third, he was able to shop for his parents, wife and sisters at the same time without wasting much of his time.

Fourth his concern of extended period waits, no returns, high shipping costs, difficulty tracking orders, unavailability of helpline were addressed by these sites due to their inherent business model.

The next best thing he experienced was the ease with which he could buy gifts for every member in his family. There are also some added benefits on the e-commerce sites like

  • Bulky discounts on first purchase above Rs. 2000
  • Additional 5% discount on pre-payment
  • Delivery at the address of your convenience in 2-5 business days
  • Availability of all products ranging from apparels, bags, accessories, fragrances, home and living products, sports items etc.
  • Availability of in-house brands as well as the items from big brand houses like Adidas, Nike, and Van Heusen etc.
  • Checking for the right size before ordering
  • Risk and tension free shopping due to 30 days return guarantee

The above advantages strike a chord with current customers due to ready availability, convenience, time-saving, lesser costs and good offers. Brick and mortar setups usually charge higher due to the initial investments in maintaining the shop setups, paying to their staff and also other expenses like rent and electricity. It also comes with the risk of getting lesser footfalls during weekdays. Also current recession problems have also kept customers away from the malls due to the high prices they charge.

The potential disadvantages of this model could be

  • Unavailability of the right product we wish to buy (though rarely happens)
  • Cannot feel and check the quality of product
  • Some customers are sceptical till they get the delivery of the product
  • Unwillingness to pay before the delivery (which too is addressed by cash on delivery)
  • No order tracking (addressed through 24X7 helplines)

Backbone of E-Commerce

Let us now look at the background systems which run to facilitate the e-commerce business. Successful e-commerce sites have a well-integrated supply chain system allowing quick turn-around time of the orders.  For example has its own delivery system to serve the customer better and reduces the dependence on external vendors. They work like a well-oiled machine and offer discounts in varied product lines. Online consumers are spoilt for choices by the e-commerce sites such as Amazon, Flipkart, Infibeam etc.

E-commerce offers wide variety of products starting from stationary, gifts to luxury brands. These sites are a must for consumers looking for a good bargain. But it is still debatable to sell high involvement products such as diamond & gold jewellery online because they have a certain badge value associated with them. Also Indian consumers are accustomed to buying them along with their friends and family. Breaking this mind-set is a challenge which, & ddmas are working to overcome.

A common thread across these sites are promotions, discounts during festivals (India has one of the largest number of festivals in the world) and special occasions. An interesting case is that of Akshaya Tritiya. Till early 2000, it was a day for piety and charity and not a festive occasion. But in the last five years, the gold council of India has been able to commercialize it to a larger scale. Over the last two years gold prices have sky rocketed on this day.Attractive discounts and promotions are offered to attract customers when the demand is not being met by jewellery retailers.

Online Indian Shoppers

Today’s consumer is well informed and looks for variety while shopping, while also keeping a close tab on the price. A case in point is in airline industry today, consumers browse through multiple sites to arrive at the best deal.  Good business opportunity exists for companies who can aggregate the offerings of players in the industry. Yatra, Makemytrip etc. have even gone a step further by offering travelling guidance and attractive tour packages including travel (airline, train and road) and stay.

For avid book readers, KBook Search compares the prices in leading online books stores. Best price deals are the norm of the day. It has increased the competition and resulted in companies fighting to retain customers and attract new ones. has able to garner significant buzz due to the super-fast delivery (same day delivery in major cities) and wide variety of lifestyle products within 10 months of its launch in India. It has emerged as the second largest traffic among online shoppers in India.

E-commerce market in India is around $10 Bn, a tiny market compared to the US($167 Bn). Considering India’s growth story and rapid growth of tier-2 cities more people will have access to e-commerce. An important stumbling block is the reluctance of Indians to do online payment. Payment innovations such as prepaid cards, cash on delivery, mobile banking and swipe on delivery have partly been able to overcome them. Government initiatives such as UID and IMPS (Instant Messaging and Presence Services (telecommunications) are also a step in the right direction.

This article has been authored by VK Sudarsshan and Ameya Patkar from IIM Lucknow.


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