How online shopping cracked India
February 20, 2016, India
Last week, my wired phone started malfunctioning and had to be replaced. Usually, I would have just ordered a new one online. But I had to anyway go to the shopping area to hand over a charger for servicing. So I decided to pick up a new phone while I was in the area as I would get the offline shopping benefits of instant delivery, price bargaining, and service support.
Reliving history
I rarely go shopping these days, apart from groceries and clothes. The last time was almost a year ago for some heavy kitchen equipment. Anyway, by habit, I did a quick recce online to get an idea of the prices of wired phones, and braved the traffic and heat to make my way to the shopping area.
It took me some hunting to find the service centre. The one marked on Google Maps was a sister concern of the service centre for my brand. They redirected me but it was confusing and I soon found myself going up a one way street with a cop yelling behind me. By the time I located the place, I was pouring with sweat, and relieved to find a parking slot just outside.
After handing over my charger for servicing, I walked into a large electronic retailer next door. A sales rep met me at the door, and informed me that they didn’t sell phones. He directed me to a shopping plaza on a parallel road. Before I left, I had a quick look around to see what they were selling. The stuff on display was mainly TVs, refrigerators, washing machines and other heavy stuff that couldn’t be couriered from an online store.
I left my vehicle behind as finding parking again might be an issue, and I definitely didn’t want to run into the hassled policeman again. It was a hot, dusty walk but I eventually found the shopping plaza. Most of the shops in it were clothes outlets. People like to try out clothes, and this is one offline business that seems to be surviving the online blitz.
After a bit of wandering inside the shopping plaza, I finally noticed a shop with landline phones on display. He had three brands, Panasonic, Beetel, and some local brand. The first was too expensive, the second was fine on price, and the last looked iffy.
I might have gone with the Beetel but its quality wasn’t matching a Motorola I had spotted on Amazon that came with similar features (LCD display, speakerphone, quick dial memory) but a smaller price tag.
When I mentioned the online price, the salesman’s face fell. He refused to bargain, and quietly started putting away the phones. It was obvious he knew that he couldn’t match Amazon’s price with overheads like shop rentals, electricity, licenses, etc.
I told him that I’d be back. As I walked off, it struck me that my experience was being replicated by millions of other shoppers all over India, and it’s what is helping online shopping take off.
Spoilt by info
I am now used to reading customer reviews, and comparing products before making a purchase. Buying without doing this is almost like buying blind. It’s not just reviews and price but the whole online experience that makes the difference.
Like I once ordered a pair of tennis shoes online. The next morning my coach pointed out that the soles weren’t non-marking, and could only be used on hard courts. I instantly cancelled the order, and mentioned why. Though the product had already been shipped, I was given a full refund. I suppose they realised I was not fully to blame and probably also checked my purchase history to note that I am a serious shopper. Offline shoppers don't keep such records, and wouldn’t have absorbed the shipping cost so easily.
Latecomer to the online party
Till recently, most internet users in India were unwilling or unable to afford to spend too much on internet. ISPs couldn’t recover the cost of laying cables as there were few takers. Low bandwidth and limited internet data plans didn’t help. Though ISPs claim to offer unlimited plans, they throttle bandwidth after a set limit, which results in a poor internet performance that puts off would be internet users.
But lately, things have been looking up with mobile internet taking off as cellphone prices dropped. This coincides with the rise in online shopping, which has taken off in the last one year. So what changed?
Safety is the key
We Indians, are used to picking up our shopping before parting with our cash. So the idea of paying in advance, and trusting a retailer to deliver the purchase was hard to digest.
Using credit cards online is also a big worry. There were too many horror stories of credit card fraud going around. A friend of mine got a call from his banker asking him if he was buying something online at the moment. Seems someone somewhere in South America was trying to use his credit card to shop online. He was lucky his banker spotted the transaction and stopped it.
The trust deadlock was finally broken when online retailers began offering cash-on-delivery (COD). That was when I made my first online purchase, a mobile phone via a COD transaction.
COD is a huge breakthrough for online shopping in India as many people still don’t have credit cards, and often not even a bank account. Though pranksters initially made things difficult for retailers by ordering stuff and declining to take delivery, the industry seems to have sorted out the issue. Collection points where customers could pick up deliveries were another innovation that helped solve the issue of no one being at home.
The tipping point for me was when India’s banking regulator insisted that online credit card transactions be backed by an OTP (one time password) sent to the cellphone linked to the credit card. Suddenly it didn’t matter if my credit card details were stolen, as they were useless without my cellphone.
Soon more ways to pay opened up. Online wallets where you could limit your risk. Net banking where you directly paid from your bank account again linked to an OTP. Direct payments from cellphones. Payment by instalment for those short of cash. There are even sites where you can buy secondhand things directly from the seller, or sell stuff yourself without the 15% eBay type commissions.
The final bit of the puzzle is guaranteed refunds. There have been times where I have received products that didn’t match the online description. Like a metal phone case that turned out to be plastic. A few emails and photos later, my money was returned.
Ultra convenient
Online retailers offer home delivery by courier, often for free. Compared to this, going to a real shop in an Indian city can literally be a pain. The hot weather, dusty roads, bumper-to-bumper traffic in shopping zones, intense competition for parking, mounting fuel costs, and India’s lawless roads, all add up to stressful experience.
Prices also are lower online. Probably because online retailers have fewer overheads, and directly source products from manufacturers to cut out the middlemen. Rewards, loyalty programs, and cashback schemes all sweeten up the deal, and I often end up buying stuff that I wouldn’t have otherwise.
Attacking the Last Frontiers
India is the only country where packaged commodities cannot be legally sold at prices higher than their MRP (max retail price). So most of these can be easily picked up anywhere at the same price. But even this is changing as it’s legal to sell below the MRP, and online retailers are doing exactly that.
Perishables like groceries is an area where offline still dominates. MRP doesn’t apply as they are not packaged goods, and shops with good sources can make a decent profit. But online marketers are beginning to figure out how to tackle it. I ordered milk from an online retailer, who replaced it for free when I called to say it had curdled on boiling. You won’t get that kind of service at offline stores.
Not just shopping
The online payment facility has changed how I do financial transactions. Booking a railway ticket used to mean taking half a day off to go to the local railway station. You’d end up standing for hours in queues, feeling your BP going up, as bureaucratic ticketing officials took leisurely tea breaks. Now it’s just a few minutes on an app. And where once I needed travel agents to book flight tickets and arrange visas, I now book and pay for them by myself, saving thousands in commissions. As for banking, I no longer have a chequebook, with cheap, safe online transfers being accepted all around.
What’s missing
There are some things I need to touch and feel before I decide to buy them. Like clothes and spectacles. I don’t know how they will look on me till I try them on, so I don’t buy them online.
Heavier products have higher transport costs that increase proportionate to the distance to be delivered. So you have to buy it locally. But it’s only a matter of time before online marketers tie up with local distributors.
Eating out is another experience that online has been unable to replicate but I expect something innovative to happen in this zone.
I do miss the the sights and sounds of the Indian bazaars, and once in a while, I wander the streets to catch a whiff of my shopping past. But the shops need sales to survive, not sightseers.
The Personal Touch
I usually pick up groceries at a department store and the staff there know me by face. They have a smile for me, help me find what I want, accept returns without a question, and point out deals that I may have missed.
Then there’s the Mom & Pop store near my house. Pop has known us for years, and regularly enquires about my family. This kind of personal relationship is impossible in online shopping, and they offer a warm, friendly alternative to its faceless world.
I don’t know if these small stores can survive the relentless onslaught of the online shopping tsunami.
But if they don’t, I will miss them when they’re gone.
