[phamilyman]

Originally Posted by drmohitg

But sir not everyone is an early morning person and neither does everyone have the option of a Security guard at the apartment gate to collect the parcel. In my case, most of my orders are COD and hence I need to physically collect the item myself. I think if they are attempting to do this ( which makes sense if the customer is willing too) then they should introduce an option for the same while placing the order. It can be a simple option like " Are you willing for an early morning delivery?". If they come to deliver something at 6 AM at my place, I would cancel the order and send the courier guy back.

Agreed. But the time is not far (read when snapdeal and flipkart are left far behind) when the ecommerce honeymoon in India will be over and then you will have to pay higher for peak hour deliveries

If your convenience implies lower efficiencies for the agency, then you'll have to pay for it. Most wont!

Originally Posted by binand

On the other hand, I reckon the number of returns due to "nobody at home" during normal working hours (say 10 to 5) is also substantial. Maybe they'll eventually end up doing the grocery folks are doing - ask for preferred delivery slot upfront. I also read that they are negotiating with a locker startup.

http://www.thehindu.com/business/Ind...le17074755.ece

Bingo! you nailed it. I think everyone only worries about their part of the experience - not knowing amazon is optimizing at a higher level!

[shankar.balan]

Food for thought:

https://www.techinasia.com/alibaba-vs-amazon-in-india

Here's my take: Vaitheeswaran Kothandaraman​​ - IndiaPlaza - in some sense the Father of e Commerce in India. Honest Profitability and keeping costs sensible and doing their best to deliver consistent convenience and quality consumer experience was what he was building, step by step.

Then the Great Erudite Gods of the VC community popped up with the “Acquire Consumer at any Cost through Deep Discounting” Mantra and everything has simply gone pear shaped, as a pure business prospect.

Consumers had a lot of fun, yes. But typical of the Pavlovian Syndrome, the consumers got used to Deep Discounts and were literally being bribed to be loyal. Instead of creating a sensible, discerning and premium consumer base, the e Com majors have gone and created their own Deal Distracted, Brand Promiscuous Frankensteins.

Instead of differentiating by experience, convenience and technology, each e Com major vied with the other, to chuck more and more money down into the unplumbable depths and feed the insatiable appetites of the monster.

No wonder the money well dried up and the self same Erudite VC’s suddenly started talking about “Path to Profitability” and all the rest of it (basically started spouting all the common sense that almost all the older economy companies had been practising for years and years, as if it was some new discovery of theirs!)

So now, the last frontier of India remains, for two gargantuan deep pocketed monsters to sit and slug it out in an epic slug fest. Lets sit and watch - after all, we have the ring side seats!

[Chetan_Rao]

I have a really simple question (well, it sounded simple in my head ), if some of our in-house 'economists' can help answer it.

Why would anyone presume they can create a 'captive' customer in a free market, and that such customers will one day suddenly (and willingly) shift from cheap-as-peanuts deals to paying 'real market value' for the same stuff? Plenty of people with a lot of money seem to be operating on that premise, so there must be some sense in there I'm missing out on?

And if 'enough of the deals, now back to real prices' ever happens, what stops a customer from shifting back to buying stuff from places where they can actually 'experience' the product before purchase? Today's deals work primarily because of the discounts (convenience the obvious other reason) and it's arguable if the online 'deal' is the same as given by a B&M store, the layman customer may prefer the latter source, at least for high-value purchases.

[binand]

Originally Posted by Chetan_Rao

Why would anyone presume they can create a 'captive' customer in a free market,

B-school theory states you create a captive customer by increasing switching costs. For most businesses CRM is the one that raises switching costs and prevents customer exodus. Those who understand the concept of having a "relation" with the customer as opposed to just being a series of transactions will succeed in retaining customers; those who don't will perish.

Originally Posted by Chetan_Rao

and that such customers will one day suddenly (and willingly) shift from cheap-as-peanuts deals to paying 'real market value' for the same stuff? Plenty of people with a lot of money seem to be operating on that premise, so there must be some sense in there I'm missing out on?

The ones that are operating on that premise will be the losers, but the ones who are actively working on bringing the 'real market value' closer to 'cheap-as-peanuts deals' prices have a good chance of success.

We know the price of a product = raw material cost + direct costs + overheads + cost of inefficiencies + margin. Many e-commerce guys, for various reasons, take the margin down to 0 or negative to keep the price low. Others try to minimise one or several of the remaining terms (eg: Uber reduces cost of inefficiencies and overheads).

Originally Posted by Chetan_Rao

And if 'enough of the deals, now back to real prices' ever happens, what stops a customer from shifting back to buying stuff from places where they can actually 'experience' the product before purchase?

This depends on the level of innovation the online folks do, the amount of pushback from the B&M folks, plus a bunch of environmental factors.

• There are some overheads that online does not have. Similarly there are some efficiency hacks possible online that offline cannot manage. So in most cases companies would be able to keep online prices low, lower than B&M prices.
• The convenience angle, as you rightly mention. Weather, traffic, crowd/queue, parking etc. all fall in this.
• Improvements in last-mile delivery and reverse logistics.

As far as 'experience' goes, I believe products and business models still have to evolve. Housing.com had the right ideas in this area for apartment purchases (though they ran out of steam). Tesla is using one model in the US to sell their cars. I think Flipkart acquired a company that was working on an online method of clothes trials. So there is work happening in this area; we probably are still in the early days to conclude decisively one way or the other.

[Chetan_Rao]

@binand

Difficult to quote bits on a cellphone so excuse the separate post.

Makes sense on the whole, but what I find missing (in the market, not in your reasoning) is the push to be sustainable, which is a basic requirement irrespective of the sales/logistics channel in use, or so one would think. Lack of some logistical overheads can't alone justify the kind of 'deals' on offer.

Most e-tailers seem to actually be going downhill on customer experience too (Amazon may be an exception to a certain extent), so I really struggle to see how any of these will be able to hold onto their customer base once the deals go away.

Apple is a perfect example of a captive consumer environment, but they provide an overall unmatched customer experience to sustain that model. Who would be a relevant example in the e-retail space, if any? Not an apple to apple comparison (pun unintended), but most in the e-retail space don't seem to have a plan after they capture the market.

[binand]

Originally Posted by Chetan_Rao

Makes sense on the whole, but what I find missing (in the market, not in your reasoning) is the push to be sustainable, which is a basic requirement irrespective of the sales/logistics channel in use, or so one would think.

Based on your questions, I think the word you should use is "profitable" and not "sustainable". Sustainable means that the business understands its non-financial risks and have a plan to manage them. Profitable means that the business can produce a return on investment. Sacrifice of short-term profit at the altar of long-term profitability is an accepted business strategy; pretty much everyone who's built a successful business has done it and probably are still doing it.

Originally Posted by Chetan_Rao

Lack of some logistical overheads can't alone justify the kind of 'deals' on offer.
Most e-tailers seem to actually be going downhill on customer experience too (Amazon may be an exception to a certain extent), so I really struggle to see how any of these will be able to hold onto their customer base once the deals go away.

So your question really is, are these 'deals' part of any conceivable profitability strategy or are they just price undercutting by people who have run out of ideas? To answer that, we need to consider a set of steps that might possibly lead to profitability:

- Offer well-publicized deals to bring buyers and incentives, technical assistance etc. to bring sellers into your marketplace.
- Reduce inventory and logistics costs.
- Be frugal; keep salaries and overheads as low as possible.
- Generate alternate revenue streams.
- [other points]

I personally don't have a problem with deals if the cost of the deals are coming from allocated marketing or sales promotion budgets. That mode of operation does not lead to big risks (of course, analysis of the impact of the deal must be done). It is when all (or most of) the capital available to you is dedicated to running these deals that you have a problem.

Getting back on topic, I find Amazon ticks all the above boxes, some others some of these boxes, but the vast majority probably don't tick any. This is where these folks then are going wrong.

Originally Posted by Chetan_Rao

Apple is a perfect example of a captive consumer environment, but they provide an overall unmatched customer experience to sustain that model. Who would be a relevant example in the e-retail space, if any? Not an apple to apple comparison (pun unintended), but most in the e-retail space don't seem to have a plan after they capture the market.

First, to capture or increase market share what you need is lower your customer acquisition costs (like Paytm has done, for example). Captive customers are great for increasing your topline, but then that is not the only way of doing it (in fact, relying on captive customers is a particularly risky way of doing it).

Maybe that didn't come out well, so let us take the example of our tax filing sites. I don't use them, but I suppose once you start using such a portal you return there year after year (they have your historic information and - though not strictly true - can make your IT return filing simpler). So their customer base is reasonably captive, is it not? But those customers transact only once a year; and they don't have much of a chance to improve their repeat purchase rate. So to grow year after year, they necessarily have to acquire more and more customers - their focus therefore should be on acquisition and not on building a captive base. They could diversify into other taxation-related activities, offer invoicing as a service and deal with ST/VAT filings, manage your exemptions and deductions, and a plethora of other activities. Presumably each of these companies have a roadmap in which some (or all) of the above figure and will be released to the public in the near future.

Second, the comparison with Apple is not really fair; as they have been in business for many decades (and though less relevant for this discussion, bulk of that time helmed by one of the greatest businessmen the world has seen). Our e-retail guys have only maybe half a decade of operational experience at the median. But are there companies that show promise? I think there are, but it would be presumptuous of me to list them here. :-)

[poloman]

What is the amazon return policy for seller full filled items? Do the customer need to pay for the return shipment? Also it seems the seller has to approve your refund request to proceed. Extremely tricky for fashion items. I purchased a wallet and it is not as per the photos and the finish seems to be different. Now how can I convince the seller, that this is not I wanted and secure a refund?

[Chetan_Rao]

Originally Posted by binand

Based on your questions, I think the word you should use is "profitable".....

Yes, 'profitable' is probably more relevant. Either way, my point was every business is ultimately built on the premise that at some point, what comes out will be greater than what goes in. The point may vary based on industry (e.g. capex-heavy businesses may take much longer to break even, then turn a profit), but input higher than output isn't 'sustainable' beyond a point.

Some of our e-retail biggies may be reaching the point where investors start looking at returns instead of throwing money down a bottomless pit in the hope of 'future gains' which may not materialize.

So your question really is, are these 'deals' part of any conceivable profitability strategy or are they just price undercutting by people who have run out of ideas?.....

.....It is when all (or most of) the capital available to you is dedicated to running these deals that you have a problem.

That second bit in the quote is precisely what's apparently happening at most e-retailers today.

....the vast majority probably don't tick any. This is where these folks then are going wrong.

Precisely, and that's what makes me wonder how most of these chaps manage to get ongoing funding. Like you say, cut-price deals alone won't really capture market long-term, that requires a sound customer retention and acquisition strategy. Remains to be seen how many, if any, have that in place.

the comparison with Apple is not really fair....

I agree, and said as much. Still, some lessons to be learnt there.

[Turbanator]

Guys, need suggestion on Urban Ladder and Pepper fry? I need to order some beds and other household stuff. Am looking something in Wood and of high quality.

[Thad E Ginathom]

Originally Posted by Turbanator

... Am looking something in Wood and of high quality.

It is hard enough to tell the quality of furniture when you are looking directly at it. A lot of covered sofas have cheap and roughly-made ply, or even chipboard, under the surface. Even "wooden" items may not be very "wooden" underneath the veneer!

[vibbs]

Originally Posted by Thad E Ginathom

It is hard enough to tell the quality of furniture when you are looking directly at it. A lot of covered sofas have cheap and roughly-made ply, or even chipboard, under the surface. Even "wooden" items may not be very "wooden" underneath the veneer!

Agree. More so in case of online furniture.

Originally Posted by Turbanator

Guys, need suggestion on Urban Ladder and Pepper fry? I need to order some beds and other household stuff. Am looking something in Wood and of high quality.

I believe pepperfry is more like a market place where other sellers sell their items. So it would be difficult to vouch for the quality per-se.

Urban Ladder has their own factory I believe and themself manufacture the furniture. Recently bought a TV Unit from them and it was okay dokey. The fit was decent but I have better experience from Godrej Interio and Home stop. Recently purchased a Sofa set and Dining table from Godrej Interio and hence the reference for the comparo. It might not be an apple to apple comparison as the TV unit is made of Particle board where as Dining table is solid wood.

Another place I have experimented is a website called woodenstreet.com

Have ordered a Queen size bed and bed side tables from them. Not yet delivered. The products seemed good. All are solid wood items. Their delivery time is longer though and the furniture is manufactiured in rajasthan and shipped across the country. Can give a better picture only once I recieve the items.

[Turbanator]

I believe pepperfry is more like a market place where other sellers sell their items

Agreed, but there are certain Brands like woodworth that exclusively sell here. I went to their Gurgaon design centre and found quality ok so wanted to have feedback from someone who has bought any furniture from either.

https://www.pepperfry.com/duvall-kin...2.html?src=mnc

[arunphilip]

Originally Posted by Turbanator

Guys, need suggestion on Urban Ladder and Pepper fry? I need to order some beds and other household stuff. Am looking something in Wood and of high quality.

Also, give Ekbote a shot: http://myekbote.com/

I bought a dining table and accompanying chairs via them 5 years ago, and am extremely satisfied with the furniture, particularly with the chairs, which are nice and solid, unlike a lot of the flimsy wooden chairs that we find in newer furniture shops.

Delivery experience and assembly (of the dining table) was really good. The chairs came as-is and were not assembled on-site, which - in my opinion - also made a difference in their solidity.

Originally Posted by Thad E Ginathom

I used to see Ekbote at exhibitions, and felt that their quality was above sellers of similar stuff.

Good to have their quality validated.

[Thad E Ginathom]

Originally Posted by arunphilip

Also, give Ekbote a shot: http://myekbote.com/

I used to see Ekbote at exhibitions, and felt that their quality was above sellers of similar stuff. Have not noticed them for a while.

[binand]

Originally Posted by Thad E Ginathom

I used to see Ekbote at exhibitions, and felt that their quality was above sellers of similar stuff. Have not noticed them for a while.

They had a showroom in Bangalore's Jeevan Bhima Nagar main road; but it was shuttered about a year back.