India is currently witnessing an eCommerce revolution where almost every other new startup company is trying to make it big in the eCommerce domain. While this is good and generates healthy competition, there are also companies who are just popping up in order to sell products. What’s wrong in that? Nothing. Except that that is not enough to make it big in this huge country. Lets start with a brief history.
There were players in the past, but the company that really made a dent in the domain is, undoubtedly, flipkart. They started by selling books and are now on the way of selling almost everything that can be sold. They used BluDart as their delivery partner initially, and then slowly rolled out their own logistic operations which enabled them to have much greater control on the whole buying process.
Others that made huge impact are myntra, jabong, letsbuy (bought and closed down by flipkart). I am sure there are many others. What is common in all of them is that they started their own logistic operations. You might wonder why this was so important. Lets have a look.
India is a very different market from the rest of the world. In addition to having a lot of people, its not as organized as the developed countries. Businesses do not spend on IT systems as much as their counterparts around the world. This is true for logistics companies as well. Even big companies like blu dart have average to poor tracking systems in place (compared to what fedex & UPS have around the world). This is where having your own logistics operations pays off for an eCommerce company. In addition to having greater control on the consignments, the company can offer value added services like COD, return collection etc. leading to more customer satisfaction.
I have two examples to vouch for my point:
Recently, I bought something from pepperfry.com – a relatively new site which sells furniture, furnishings and a lot of other stuff. They have a really nice site and most of the features you will expect from a typical online shop. What they do not have is their own logistic chain. They rely on blu dart for delivery. When I received my item, I found that it is broken. I called up their call center to ask for a replacement, who asked me to email them a few snaps of the damaged item. A few hours after sending the same, I got an email from them asking me to pack the item back and send it to them. They said that they will refund me the price of the item and shipping cost up to INR 150. What surprised me was the fact that the email did not contain any mention about replacement of the item. I replied to their email asking for clarifications and am yet to receive a reply. I am assuming they just want to return the item. Re-ordering it might not go in my favor as I bought it using a discount coupon which is not valid now.
The point to note here is that if I follow their process, I am signing up to face inconvenience for their fault. The damaged product delivery was obviously a result of oversight by their warehouse employee or mishandling during transit. I have to pack the item, go to the courier agency and then send the receipt to them for reimbursement. And I am not even sure if INR 150 is going to be enough to send the item back.
I bought a pair of footwear from myntra, used it for about 10 days and its sole came off. It was obviously a defective product. I called up their customer care who asked me to create a return online. I created the return at 11 am. Their delivery guy (part of their logistics fleet) came to collect it from me at 11:30 am and I got the store credit in my account by 12. I ordered the same item again by 12:30 pm.
The key differentiator between the above two examples is logistics. As myntra has its own logistics chain, it could easily locate its delivery guy in my area as soon as I created a return. They informed him about the return and he collected it from me. Since he is their employee, he verified the item in front of me and informed the warehouse about the receipt which triggered the credit to my account.
Of course blu dart offers pickup service (Microsoft has been using them to replace Xbox 360) and pepperfry could use them for return collection, but it would be too costly for them and they probably don’t care. They are in it just to sell stuff. They seem to have no interest in gaining customer satisfaction.
What should be kept in mind when starting an online business in India is that in addition to low prices, customers here are also looking for convenience and a certain amount of trust. The brick and mortar retailers in the developed countries have been offering 30 day returns since a long time. And their stores are far more convenient and accessible than the stores here in India. Still they are facing a stuff competition from the online shops. What companies probably fail to understand is that there is huge opportunity here. The key USPs for any online business to succeed here are low prices and customer convenience. Give me a reasonable price and the convenience to avoid going to a crowded store and I am sold. Evidently myntra, jabong & fipkart are milking on this fact.
We recommend our readers to exercise caution when buying from websites which do not have their own logistics. In case you get a damaged product or have to return it for any other reason, you are in for huge inconvenience.
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