Indian E-Commerce Players Will Innovate To Overcome Challenges & Scale

The third edition of the VCCircle E-Commerce Forum, co-hosted by Techcircle.in, saw a flood of 400 participants from the entire e-commerce ecosystem including entrepreneurs, investors as well as executives from offline retail firms congregating to discuss the new e-commerce categories, offline plays, infrastructure challenges for a status check on the industry.

Speaking at the keynote, Ajit Balakrishnan, Founder of Rediff.com India said, "I wish there were 100,000 e-commerce firms – that way we would have 50-100 e-commerce sites that were great. It is fantastic to have irrational and rational exuberance." He also talked about the mosaic of institutional drivers such as backhaul connectivity, credit card population, capital gain issues and legal issues in the ecosystem.

The opening panel titled 'The Indian E-Commerce: A Status Check & Where Are We Headed' was moderated by Manik Arora, MD, IDG Ventures India and had HomeShop 18, Infibeam and e-Bay India as participants. Arora began the discussion by stating that India has already witnessed venture capital investments in excess of $500 million this year and this number can easily cross the $1 billion  mark by the end of the year. Half of this has been invested in the e-commerce sector. Sundeep Malhotra CEO, Home Shop 18, added to this by saying "Although capital and finance is readily available, lack of talent and infrastructure and logistics still pose a challenge, but the biggest challenge is the lack of credibility and trust. Companies need to build customer confidence for better acceptance of e-commerce."

Gautam Gandhi, Head Business Development, Google India said "We play the role of an intermediary, we are all entering new territories and will witness how online and offline will meet each other in the near future." Also speaking at the panel, Infibeam's founder Vishal Mehta said "As a culture we foster innovation. E-commerce is about flawless execution, trust of consumers and there may be a lot of issues to simplify now."

Discussing at length the challenges facing the ecosystem, B. Muralikrishnan, Country Manager, eBay India said "Scalability at various levels is the biggest challenge for Indian e-commerce."

The second panel called 'The Rise Of New E-commerce Categories: Can They Scale?' was moderated by Vani Kola, MD, IndoUS Ventures with start-ups Inkfruit, Carat Lane, Babyoye and VC firm Sequoia Capital participating. "Value on delivery has to be taken care of: it is mandatory for all the e-commerce companies to make it a priority," said Kashyap Dalal, CEO, Inkfruit. Vani Kola predicted that "There will be one or more $1 billion exits in India by 2012."

The panel titled 'What attracts large retailers to the game' saw Future Group, Tata-owned Infiniti Retail and Bombay Stores participating in a riveting discussion moderated by Mahesh Murthy, Partner Seedfund. Kashyap Mehta, Head of E-commerce, Infiniti Retail Ltd, said, "Retailers go online to increase their reach, since it provides more access and also as it offers a convenient channel to do both discovery and research online. They can set up a multi-channel to tap various cycles of a consumer transaction." Rajiv Prakash, Advisor- Digital Businesses to the Future Group, said that Future Bazaar was using the web, mobile and telephones as digital channels to reach out to users. "Our idea is to take a digital commerce approach and we will use digital influences from increasing awareness through marketing to online research when information in stores is unavailable. Digital is important in enabling conversations."

Bombay Stores' CEO Anagg Desai said it is a "no option, no brainer" choice for offline players seeking to go online. "It's like going on Facebook," he said.  Wherever it brings relevance to introduce an offline play, like travel sites and matrimonial sites, e-commerce stories will also set up kiosks and stores, he added.

In the last panel on 'E-Commerce Ecosystem: Infrastructure Enablers and Service Providers', which was moderated by Alok Mittal, MD of Canaan Partners India,  the discussion revolved around the readiness of the ecosystem and the main challenges being faced by the back-end players.

Pawan Gadia, the head of e-commerce of Ferns n Petals, a flower retail chain, said that he is targeting a Rs 30 crore turnover. "Technology challenges still rule with bandwidth and hosting still being very expensive. Quality analytics is still too prohibitively priced. There is a lot of customised per vendor required when it comes to technology," said Gadia.

Billdesk MD Srinivasu agreed that existing infrastructure not good enough and that there are only 20 million issued credit cards in the country and 250 million debit cards. However, the number of people transacting online now is growing. Domain name registrar and hosting services provider Net 4 India's MD Jasjit Sawhney said that the technology challenge is the least of the problems, especially with cloud computing and software as a service offerings from Oracle/SAP and other large firms. "Start-up time to set up an e-commerce business has shrunk many fold," he said. Net4 India attempted a payment integration service but had to pull it off as it was not viable.

Courier companies such as Aramex will soon allow users to swipe their credit cards on delivery of the packages right at their doorstep. Perci Averi, Country Manager of Aramex said that there has been a sea change since the company first stepped into e-commerce in 2001 and that there are more companies wanting to take control of what's being shipped, better control over inventories and information. Technology is playing an important role, he said. "Courier times will fall from days to hours," said Averi.