THE ______ BUSINESS OF E COMMERCE
Wait. What! A 55% off+an extra 40% off. On everything. Where the heck are my specs. Hmmm. I seem to only have 4 pairs of shoes. I definitely need that walking shoe from Sketchers. And then a pair of those Levis 511. I seriously can’t afford them on their MRP. Plus a Italy jersey won’t do any harm. And then those tees. I’m going to college ,ain’t I. Total bill : 4900. Hmmm. Mom’s permission. Aah. Again. And her oh so familiar reply: “Munda pagal ho gaya hai. Thand rakh. Ek vaari pher soch le.” And so I let it go.
Well for the past few(2 to be precise) months this episode has been taking place every other week or so. Some may say I have a psychological disorder. But according to me I’m just a bit to free.
But this shouldn’t come as a surprise. You see in India, the shopping portals are at the top of website rankings. Flipkart(Rank 8) is even ahead of Twitter(Rank 12). No Kiddin. Every day a million Indians log on to such portals and haplessly keep looking around for products. The same case in the States. Amazon.com(Rank 5) is ahead of Twitter(Rank 8) again. Is that a flat 40?. Lets check it out!. Maybe I’ll get a really good bargain. And it’s not just the rich and the middle class who are into it. While travelling in the metro I’ve passed by many not-so-well-off people talking shoes, purses on major sites like flipkart, snapdeal, jabong etc. I’ve even met people discussing about a great budget phone called Moto C. Well that was until I corrected them.
We all now know that e-commerce is a BIG thing. Mostly everyone of us has ordered a product online. And so one day one friend of mine came and told me that Flipkart is going in a loss. “Are you mad? Bhai itni badi company loss mein kaise ja sakti hai. Tera dimag kharab hai.” And then I checked it myself. And I was left quite redfaced. Yes, although it raked up revenues of more than 1 Billion dollars it posted an operating loss of 281 crores.
So I realized. Those massive discounts. They weren’t magic after all. All the e-commerce sites cut the prices themselves instead of the manufacturer doing that. And thus reduce their own profits. A natural question then. Why? For you. Or to lure you. Buying online has a massive massive advantage of buying products from your pc or phone and getting it delivered right at your doorstep. But when ordering for the first time(anything except books) you don’t feel confident. Their product might be defected. What if the shoe is small. What if the tees don’t fit. And then how do I change it. To be fair the returns are not so hassle some but for the first timers it is an issue. And that’s where the discounts come in. They provide the extra push. And once you come in moving out is really hard. Next time you’ll most probably buy your product online. Even if it offers a 15% off.
The companies are focused now on revenue generation and creating a consumer and service base more than they are focused on generating profits. Patience is the name of the game. Their main source of profit are their in-house brands like Roadster of Myntra and so on. Just like Amazon in the United States. It had to wait almost 7 years to post its first operating profit. And when it did there was no looking back.
So you may well call this a honeymoon period. The company offers you great deals, you buy them, and repeat…….thus building a relationship for a lifetime. But what this signifies is that the honeymoon will be over. Not now. The e-commerce fight is heating up. Flipkart is continuously raising big bucks from investors. Jeff Bezos is deciding to pump in 2 billion dollars for Amazon India. This will definitely only mean better deals for the customer and you can rejoice( :). But maybe in the next 3–5 years things will change. When you’ll get jaw dropping deals only in the holiday season. Maybe even a Cyber Sunday. By that time you’ll have become lazy enough of going to your local market or supermarket for books, shampoos and clothes and will surely feel more comfortable ordering online. Also having a big customer base helps. As selling a product to 1 in 5 people now will become equivalent to selling a product to 1 in 10 then. And then they’ll start making profits. Sales/discounts will still be there but not that massive. They’ll still benefit the consumer if not that much. But they’ll definitely be much more easy to order. It will definitely be good. And the way things are going only 2 may survive in the big league. My predictions- Amazon and Flipkart. And for the ______ above, now you know what e commerce is. Fill it yourself ;)