THE SATURDAY EVENING is unusually warm for early February in Bangalore, India’s IT capital. But 29-year-old techie, Subru Sasidharan Pillai, is not in Forum, a popular mall in Koramangala in south-eastern Bangalore, for the air-conditioning. Pillai is a mall regular. He and his techie wife (who works at Tata Consultancy Services) live in Bellandur, a 15-minute drive away. But that Saturday, he was a man with a mission—to upgrade his Nokia C2 to the new Samsung Galaxy Grand.

At the electronics store on the first floor, Pillai is confronted with banks of phones at almost every price point with every imaginable feature. But he homes in on the Galaxy Grand. His friends at Infosys told him of this phone, and he knew the price and features suited him. He plays with the phone for a few minutes, testing out the size, weight, and touch capabilities. He smiles approvingly, then puts the phone down, and walks out. He had already decided to buy the phone online, provided he liked (the touch and feel of) it.

For a techie, Pillai is a relative newbie at online shopping. “At Infosys, when you see colleagues taking delivery of hundreds of boxes from the Flipkarts and Myntras of the world, it is hard not to be curious and give it a shot,” he says. About a month ago, he bought a pair of not-so-expensive shoes from the Decathlon Sports India website. A smooth experience, receiving the correct-size product within 24 hours, encouraged him to try again, this time for a phone.

Pillai perfectly fits the profile online companies want to sell to. But the biggest challenge facing them here is: How to make people buy online for the first time. Also, like Pillai with his phone, the Indian consumers’ need to touch and feel is a challenge for e-ventures. “One must start leveraging better the need that Indians have to touch and feel,” says Max Herrgerman, head of digital at JWT India.

There are many like Pillai—young, Internet-savvy, with disposable income—who are too inhibited to buy products online. Many of them use the Net to buy air, rail, and bus tickets, and to pay bills and recharge phones. Of the estimated 125 million Indians online, about 20 million have transacted at least once, primarily on travel sites such as IRCTC, the Indian Railways booking site.

But the funnel narrows dramatically when buying products from online shops, such as Flipkart and Snapdeal. It varies between five and seven million. Pillai’s shift is the kind of behavioural change online shops are desperate for, as they continue to look for their next buyer. In fact, the mad scramble for advertising on television by online shops, including global companies such as eBay, is designed to induce people to shed such inhibition. And the agenda is often to create a pull for the category over individual companies. After all, if the sector grows, everyone grows.

COMMON SENSE SAYS, and Google suggests, that online ticketing consumers are easy to convert into product shoppers. That makes travel sites a potent marketing platform. Last year, fashion and accessories website Jabong tied up with travel portal MakeMyTrip to offer vouchers to each other’s customers.

Praveen Sinha, Jabong’s co-founder and managing director, refuses to say how the promo fared but concedes that more could be done to get “the low-hanging fruit”. Cross-selling relevant items, such as suitcases and travel accessories with tickets, could be an idea whose time has come. It is a leaf straight out of the book of supermarket designers, who put cross-category products together. Cameras with your tickets to Goa, anyone?

The e-commerce journey for the consumer, according to some, starts even before a transaction on a travel site. Pranay Chulet, chief executive of classifieds site Quikr, says the path to online buying starts with classifieds, moves to travel and billing, and culminates in products. He calls sites such as his own, which facilitates a transaction that happens offline, nurseries of e-commerce. “The handshake platform helps small traders sell to an online audience.” He adds that iPhone and Nokia are the most common searches on Quikr.

Trade magazine Franchise India estimates that 24% of buyers transact once a month. A Google report expects nine out of 10 buyers to increase spends on online shopping next year. That is good news, but for companies that raised funds (as much as Rs 3,799 crore cumulatively) from venture capital and private equity companies at sky-high valuations, it is not enough. Not when reporting their numbers to funds such as Tiger Global and Accel Partners, which pumped in big money believing in the promise of India’s e-retail story. Online is less than 0.2% of India’s $350 billion (Rs 18.8 lakh crore) retail market.

THE INHIBITION TO BUY online is the highest among the young who are otherwise leading a digital life. For advertising professionals from Delhi, Richa Jain and Sonali Chowdhury, both in their early twenties, the day starts with a quick look at their smartphones (a Galaxy SII and a Nokia Lumia 710, respectively) for WhatsApp messages and Facebook notifications. In front of a computer, a host of tabs fill their browsers, but rarely do they key in the URL of an online shop. For all that time they spend online uploading pictures, commenting on status, forwarding memes, and laughing at videos, they aren’t quite ready to trust online for purchases, particularly apparel.
Chowdhury rattles off a host of reasons, from difficulty to finding the right fit in apparels, to discomfort in giving out address and mobile phone details to a website. Jain, who loves the idea of walking into a shop in a mall and walking out with overflowing bags, points to the fun of shopping, including the fashion advice she gets from the sales assistants, and how the lack of it all adds to her decision not to shop for apparel online. There are also doubts over the authenticity of the brands online.

Some e-shops such as, are trying to work around this reluctance to give up shopping in a mall, through pop-up shops in malls every now and then. Spice Group’s has a buy-online-pick up-offline model, where a product ordered on the site can be picked up from any Spice Hotspot retail outlet across the country. Merchandising—what to stock and show on the home page—is also being tailored. According to apparel e-retailer Myntra, the higher the fashion, the more its online sales. “People, mostly who have transacted more than once, get online searching for new stuff every few days,” says Myntra’s chief merchandising officer Ganesh Subramanian. Call it virtual window shopping.

Fashion and apparel might be a difficult sell to people such as Jain and Chowdhury, despite the frequent ads highlighting trial-and-return policies of Myntra and Jabong in the past few months. But these buyers say they are willing to try out things that are not available easily in the mall—movie posters, Halloween party mugs, etc. The first things they will probably go for is what Kunal Bahl, chief executive of Snapdeal, calls “predictable products”. The most famous of that category are books.

HomeShop18, a leading merchandise e-shop, from the Network18 group, has a different take on attracting the first-time buyer. It is present on television through its shopping channel, in addition to web and mobile. That, says Sundeep Malhotra, founder and CEO of HomeShop18, is a driver of newer categories of traffic to the site. He says, middle-aged women, for instance, who form a large percentage of its audience on television, are more comfortable buying from them online because they have seen and are familiar with the brand from TV. It is a markedly different way of attracting buyers. This approach, Malhotra claims, is working as a differentiator for HomeShop18 in a market otherwise cluttered with online-only players.

To date, however, word of mouth remains the most powerful tool to get a shopper online. Pillai, for instance, was influenced by friends and colleagues having “I bought this online” conversations. As the number of such conversations grew, so did his inclination to e-shop.

Sanpreet Kaur, a 25-year-old art director in Delhi, is an online shop’s dream customer. Her morning ritual is to compare prices and designs—with various deals thrown in by mailers from various e-shops—with her colleagues and boss, and buy online. She has convinced many of her friends and colleagues to go online to buy, and remembers at least 20 such instances in her previous job as well.

Originally from Karnal, Haryana, she has been buying online for well over four years, primarily because she spends long hours at work and has little time to go out shopping. “There was a time when a package would wait for me every day,” she says. She now browses shops on her mobile, her favourites being the Mango and Zara apps (effectively cutting down on window shopping time), which allow her to see the nearest outlet stocking her chosen designs.

The carrot dangled by the e-shops is discount vouchers for referrals—a powerful motivator for Kaur. That Kaur’s influence has not been tapped into by any e-shop beyond those vouchers is strange, considering the data that is available to demonstrate her powers of ‘e-vangelism’. There is a ready case for shops making use of people such as Kaur more effectively, both for the category’s sake and their own. Kaur has moved from once-favourite Fashionandyou to Myntra and Jabong which she says have wider options. She has also taken a shine to Asos, a Britain-based e-store that ships worldwide.

THERE IS NEVER A dearth of e-mails from e-commerce companies screaming “sale”. Shoes, bags, wallets, clothes, or electronics—there is a great deal on everything. But it is unique when a direct mailer from an e-commerce company pushes a pack of soap, tea, batteries, face washes, and other everyday necessities at heavy discounts.
What it could essentially mean is that anything of a low value doesn’t need much thought before it is ordered—say a toothpaste or daily cosmetics. eBay, probably having learnt the lesson in other markets, is trying to get people to do just that—buy everyday items such as Tata Tea Agni. It sells for Rs 57 in regular stores but is available for an eye-popping Rs 9 on eBay. Conditions do apply. The offer is for first-time shoppers only, and just one unit can be ordered per household. But these antics do help nudge the fence-sitting consumer to give online shopping a shot. The fuel which currently drives purchase—not just for the first-time user—is the lure of spending less than the MRP. As a Franchise India report suggests, the perception is that e-shops provide more discounts than a retailer throughout the year—a 12-month-long sale, if you will.

“eBay as a marketplace is the destination for pretty much everything under the sun. Selling daily-use products is another aspect of our category expansion. The idea is to offer products a consumer requires everyday at a price that makes him jump the mental barrier and make a purchase,” says Muralikrishnan B, country manager, eBay India.

He believes it is vital that the company get three things right—unmatched choices, great value, and convenience. To facilitate these, eBay has tools such as PaisaPay, which enables payments; PowerShip, a logistics solution for eBay merchants; and Global EasyBuy, providing Indian shoppers instant access to 18 million international products.

Hrush Bhatt, founder and director, product and strategy, of travel portal Cleartrip, however, has a word of caution. “Conditioning the buyer to only look for low prices will be a mistake. These shops need to find and create their brand with other reasons for people to buy online.”

In this context, defining the most valuable customer is tricky and may require some thought, says Rupa Shankar, who works in the social computing practice at Bangalore-based Happiest Minds. “The most valuable customer needn’t be the one who spends the most. It could be someone, who, besides buying, spreads the word, particularly through social media.” She calls this social influence. Happiest Minds has created a practice to assist companies precisely on this. “Aiding them are mountains of data, including those that are mined from social networking sites,” says Shankar.

E-shops, most of which are at the startup stage, i.e. when survival is top priority, are in fact getting around to using the power of data. Myntra, according to Subramanian, is working on building a loyalty programme combining the powers of a personalised recommendation engine (which will customise people’s search based on their past browsing and buying patterns), with offline retail reward points.

Similarly, Muralikrishnan likes to pay extra attention to building the supply-side ecosystem for the website. At any given time there are 1.7 million live listings on eBay India and several queries. Deducing trends from them, eBay India provides useful intelligence to the sellers to help them meet demand. “I feel data is one of the most overlooked aspects of driving e-commerce,” he says.

All these, of course, are on top of signing-up bonuses that Jabong and others dish out to first-timers on their sites. Myntra and its ilk run call centres to guide those unfamiliar with Internet transactions. The emphasis is on converting the huge number of page views to transactions. Cash on delivery, the leg on which e-shops really stood, is also evolving, with Flipkart introducing credit card payment at customer locations through mobile card readers.

BUT 50-YEAR-OLD Ravindra Kumar, who runs M.M. Poonjiaji Spices, a spice and condiment exports business out of Mumbai, is sort of an outlier who could become an online shop’s surprise Santa Claus. With a Facebook page of 150-plus friends, Kumar made his first purchase online about 10 years ago—a joystick for a flight simulation game that he bought through eBay in the U.S. His latest acquisition online was a Galaxy Note II at Indiatimes Shopping. He says he got the phone at a Rs 3,000 discount. Now he always checks out prices on the Net before buying anything offline or online. Kumar says he hardly has the time to visit malls.

Sandeep Komaravelly, vice president (marketing) at Snapdeal, says there is no reason to believe only youngsters will buy online, pointing to his parents who, he says, are increasingly getting comfortable with the concept. He goes a step further. “The inclination to shop online would certainly be higher for households where the young are already cybershoppers.” There are enough people with disposable income who are 45-plus and getting exposed to deliveries made by Flipkart and others. Moreover, their resistance to online purchases is said to be lower than their peers.

Granted, the number may not be as high as youngsters, but they are a lucrative category nonetheless. The emphasis is clearly on doing whatever it takes to get more people to do what Pillai has done—buy online for the first time.

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