E-commerce

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By Rajkamal Rao 


Go back to Comparing Life US v. India

The US is probably one of the best countries in the world for e-commerce.  Looking for information, comparison shopping, buying online, using websites to interact with companies and increasingly, using social media such as Facebook and Twitter to like or dislike companies is second nature to most Americans.

India has a long way to go before websites begin to offer the same conveniences to consumers.  Unless you are visiting the website of a major company such as Tata, Reliance or Maruti, the surfing experience is sub-standard.  Smaller websites are little more than a domain name with a picture on the front page.  Websites of medium sized companies have a web presence but most of the information is static.  The standard way to communicate with these companies is by filling out a web form.  On most companies, filling out a web form does not even return an acknowledgement that your form was submitted.

E-commerce has however improved significantly during the last 5-8 years.  Flipkart.com and Homeshopping18.com are two popular online destinations for shoppers.  Junglee.com, run by Amazon, provides a comparison shopping service with redirects to the stores listing products.  The search feature in all of these sites is good giving shoppers the ability to sort by price, brand or city.  The payment mechanisms are also good because all major India payment methods - credit cards, Netbanking, Cash on Delivery - are offered as options.  And once orders are placed, Tier-1 call centers are able to provide information about your order including creating trouble tickets for escalation to support teams.

The single most important development in Indian E-commerce is the evolution of Netbanking.  Use of credit cards is still rare, so companies have found a safe and effective alternative payment engine for completing online transactions.  Netbanking is nothing more but a link to the banking websites of the majors.  This is triggered when you agree to make a purchase online and are wishing to check out.  You then log in to your bank and through a One Time Password (OTP) service, validate that you do want to do business with this company.  Once this is done, you can instantly transfer money online to this entity [the usual 5-day waiting period to authenticate a private user for payments is waived] and the transaction completes through NEFT or RTGS returning you to the merchant site.  This process is further described in the banking section.

The issue with Indian E-commerce is with the order fulfillment and the delivery process - that is when the e-infrastructure ultimately interacts with India’s physical infrastructure -especially if the goods ordered are not smaller items such as books or DVDs (which can be more easily packed and shipped).  Almost all shipments occur by road because rail shipments are notoriously slow.  Although India operates one of the largest rail networks in the world, many cities continue to be connected by single tracks which are shared by both passenger and freight trains.  Between points connected by double tracks passenger traffic is very heavy.  In either case freight trains stand for long hours on passing loops near train stations waiting for permission to travel on active track. 

Warehouses are not located in multiple locations around the country.  The item you order may not be available in the warehouse nearest you and may hence have to travel across the country from a distant warehouse.  Shipping times of 21 - 30 days are not uncommon for larger items such as appliances.  Since courier services pick up the goods for local delivery only, the ability to track your shipment is not possible for the major portion of your item’s journey.  Calling the call center is of little use because the call center has no additional information about the shipment either.

Cleartrip and Makemytrip are popular sites for travel.  Makemytrip charges INR 150 for each airline ticket purchases on its website.  Cleartrip charges a small fee for railway reservations as well.  When booking airline tickets or hotels, it may be better to use Kayak because it directs you to the carrier or hotel which rarely charges booking fees. 

The government runs the IRCTC website and on a good day when connections are fast, one can make train reservations online, pay for tickets using Net Banking or a credit card transaction, print e-tickets or cancel existing reservations.  One tip to improve user experience is to book travel on this site early in the morning or late at night - when travel agents around the country are not open for business.
Many state governments run websites to book bus travel.  Private bus companies do the same.  And there are several private online consolidators who provide the same service across multiple private bus lines.

The Karnataka State Road Transport Corporation (KSRTC), one of the best-run state bus agencies in the nation, has a superb website in operation which compares with the best in the world.  Searching for bus schedules, selecting the type of bus (premium, luxury, express), booking and buying tickets are all a breeze.  Tickets can be printed in the comfort of your home - or if you wish to go paperless, ticket confirmation is sent to your mobile phone via SMS (this is the equivalent of an electronic boarding pass).  And should you decide to cancel your trip, all it takes is one click and the refund is automatically processed to your paying bank, less cancellation fees.  Whoever designed this site must have been inspired by Amazon’s one-click ordering system!


In Bangalore, the city operates BangaloreOne, an innovative portal to access and pay bills of dozens of city agencies such as the electricity utility, water board, the local property tax collector and even traffic police.  The only payment mode accepted is a credit card which limits the portal’s use because only about 20% of Indians own credit cards.

Media sites - for news and information - are common but the sites display too many ads as they favor bulky ads over content.  Sites for classified ads and used-car shopping are common too, but the content and the website design leave much to be desired.  Real estate sites are especially bad - and this is discussed in the section on real estate.

Mapping services are generally poor.  Referral services to find high quality service companies - such as Angie’s List - don’t exist.  Geo-location services (such as Foursquare) which use social networking to inform your friends as to what you are doing so that they can join you do exist but penetration is limited.  Online streaming - of radio programming or live sports events - is still in its infancy, partly running into problems with the lack of a good 3G infrastructure. 

For the advanced web user in the returnee family, the Indian e-commerce experience is likely to be underwhelming but manageable.









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