"The Reality of Retail- The Experience is in the Brand"

"The Reality of Retail- The Experience is in the Brand."

Balance sheets are all lies, the real value of a company lies in the Brand. Brand is always in the customer context. Children & Brands are alike, they both need the same delicate care.

Brand needs Retail & Retail needs Brand. Both have to co-exist. Brand positioning must be in consistence with the Brand DNA, this is the key to success in long run.

Taking a stand as a Brand, not just a retailer. As the Retailing landscapes evolves, so must the business and brand in order to maintain market share and increase sales. The challenge for Business leaders is to create an environment of experience for the customer. Differentiation is critical to success and creating it in today`s world is a must. Customers are always willing to pay for truly innovative products that offer good quality, unique design & convenience.

Online Retail is new and in nascent stage, hence Brands are advised to Go slow. Firstly understanding of the drivers of this channel is must.Many a Brands are still not Online, they are hesitant bcoz of inconsistency in Experience on this channel. Whenever these Brands will foray into Online, Seamless same customer experience will be their top priority.

Ref: Excerpts from Indian Retail Congress 2014: A special thanks to 

1. Ashustosh Garg - CMD Guardian Lifecare Pvt. Ltd.

2.Venu Nair - MD Marks & Spencer

3. Manish Mandhana - MD Mandhana Industries 

4. Rajesh Jain - Director & Chief Executive Officer, Lacoste India.

5. Shailesh Chaturvedi - CEO & Director, Tommy Hilfiger

for their contribution.

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The E-Combatants:India`s E-Commerce industry has reached an inflection point

The E-Combatants

How the 800-pound gorilla of global internet retailing is making its biggest Indian rivals give a snappy comeback of their own

Experts feel that India’s e-commerce industry has reached an inflection point. Amazon’s entry has bought some urgency and competition into the market.Its arrival will likely catalyze a further consolidation in the market, which will see the emergence of three or four large Indian players and a long tail of high-margin speciality players in categories such as apparel, accessories and jewellery. With electronic retail accounting for barely 1% of overall organized retail, there is plenty of headroom for growth.

 

Eleven months ago, India’s e-commerce sector got an ominous warning of a sleeping giant’s rise. Amazon, the $74.5-billion giant, which had been quietly watching the local market grow from $2.5 billion in 2009 to $16 billion in 2013, according to industry lobby Assocham, decided to make an understated entry. Even as its largest Indian rival, Flipkart, was cruising towards a billion dollars in revenues and another, Snapdeal, was making similar intentions known, Seattle-based Amazon made a low-key foray. It launched in a couple of categories — books and movies and TV shows — with firm plans to take a large bite of a market expected to reach up to $56 billion by 2023. Amazon has been quick off the blocks. Since its launch in June 2013 (it launched Junglee India, an online comparison engine in 2012), the company has gone from two categories to 24, from zero sellers on its marketplace to around 1,000. Amazon has been on the move, not only by launching category after category, but pushing the envelope on other fronts. It was the first to launch next day and same day delivery; it innovated by piloting deliveries at HPCL and BPCL outlets and even dropping off packages at small kirana stores in select locations.
    “We believe that the growth is at an inflection point and there is tremendous opportunity,” says Amit Agarwal, vice-president and country manager, Amazon India. “India is a large opportunity from a consumer and service standpoint to create differentiation and we were ready when we launched to take advantage of that.”
    Amazon is dead serious about the Indian market. It spent nearly $3.5 million on lobbying in 2013, according to filings to the US Senate, including efforts to push through foreign direct investment in retail. In the first quarter of this calendar year it again spent around $1.5 million to press its case.
    Junglee , meanwhile, has emerged to be India’s No. 1 comparison site with over 30 million products, over 1,900 online sellers and over 80,000 local sellers.
    Even as the global giant goes to battle, its two largest rivals aren’t prepared to be sitting ducks. According to industry insiders, the battle is evolving into an Amazon vs Flipkart one, with Snapdeal as a scrappy third rival. 

    Sachin Bansal, CEO and co-founder of Flipkart, has had a firsthand view of Amazon’s global adventure, as a software engineer for the web giant for nearly two years between 2006 and 2007. It was this stint that convinced him to team up with IIT Delhi batchmate Binny Bansal, to start an online book selling venture in 2007 that began in a rudimentary 800-sq ft office and grew into a billion dollar online hypermarket, with over 100,000 shipments a day for products across some 20 categories. 

    Today, Sachin Bansal is preparing to go to battle with the company he ardently admires. “We are prepared to take on global rivals,” he says. “We are strongly customer-focused and we believe we have the best logistics, supply chain and technology in the industry.”
    This strong focus has helped Flipkart. The company, which has raised $550 million from marquee investors such as Tiger Global and Accel amongst a host of others, started off as an inventory-led e-retailer but transitioned into a full-fledged market place, lining up an assortment of 4,000 sellers in its quest for $1 billion in revenue. Having reached that landmark (a year before its expectations), Sachin Bansal believes that the next battle will be fought not on computers and broadband connections but over mobile broadband users. “In our next stage of evolution, we want to be recognized not as an e-commerce company, but as an m-commerce company,” he says. The firm is rapidly adding sellers and expects to rapidly increase this to up to 15,000 sellers in the next year.
    Flipkart’s switch from an inventory-led company to a market place was hardly trouble-free. The firm struggled with plunging customer satisfaction, quality issues and logistical headaches as it faced up to an exponentially larger business. More recently, it found itself in hot water for allegedly violating the Foreign Exchange Management Act to the tune of 1,400 crore. While this investigation by the Enforcement Directorate dates back to before April 2013, when it switched to the market place model, Flipkart says it had broken no rules even back then.
    With Amazon making its presence felt in the fast-growing Indian market, its largest domestic rivals know they need to act and act decisively. The market has been through several rounds of churn, as VCs initially chased opportunity in the market, only to see many of their investments crash and burn. According to estimates from NextBigWhat, a website focused on entrepreneurship, 136 e-commerce firms shut shop between November 2012 and April 2013. According to other data from Allegro Capital, an investment banking boutique in Bangalore, 80% of all Indian e- commerce companies are on their last legs, having failed to raise fresh funds. Between 2010 and 2013, 52 e-commerce firms raised some $700 million in funding, but just 18 of them attracted a follow-up round.
    In the past year to 18 months, there has been a substantial clear-out in India’s e-commerce space, as investors have been wary of investing in this space, either backing largescale players such as Flipkart or putting smaller amounts into high-margin niche start-ups. 

The Other Challenger Snapdeal’s co-founder and CEO Kunal Bahl says that with their initial focus — on group buying — the company risked being swept away in this tumult. Instead, Snapdeal pivoted from its early focus to also become perhaps India’s largest marketplace with some 20,000 sellers on its platform. Now, Bahl claims, the firm is on track to clock revenues of $1 billion — within five years of starting up.
    “When we launched in the group buying segment, we were the seventh player and in six months there were 50 more rivals jockeying with us,” says Kunal Bahl. “We got 70% market share in 14 months and, when we decided to change business strategies, our idea was called ridiculous, stupid and dumb.”
    Despite the criticism, the founders of Snapdeal persisted and, backed by funding from the likes of eBay, today claim they are months away from clocking revenues of $1 billion. “Had we run an inventory business, we would have been a distant follower,” says Bahl. “From being six steps behind in the race, we went to being four steps ahead.”
    He points out that from an overcrowded market of some 800-1,000 companies in 2011, only a handful survived and Snapdeal’s decision to pivot its business model helped it be one of them. “We have five million products on our site and we’re adding a new product every 30 seconds.” Bahl wants to face up to Amazon’s might and is confident of putting up a strong fight.
    Despite the aggression of its domestic rivals, Amazon’s Agarwal is unmoved. “There is significant potential for innovation to improve customer experience,” he contends. “While Indian e-commerce is growing rapidly, it is still in nascent stages. It’s truly Day 1 for e-commerce in India and we are committed to aggressively invest over the long term and relentlessly focus on earning customer trust.”
    Rather than building a monopoly in India, he admits there is space for multiple formats and players here. “We are going to relentlessly focus on expanding our selection, bring significant cost savings, provide fast and reliable delivery, and raise the bar for online shopping experiences in India, much like we have done everywhere else in the world,” adds Agarwal.
    Despite Amazon’s swagger, Flipkart isn’t easily intimidated — Bansal the CEO is working overtime to keep the fires going. When ET Magazine spoke to him in Bangalore, it was his wedding anniversary and he spoke to this writer in between attending a public function and before getting to other official meetings and calls. “We are constantly thinking of new ways to grow the business,” he says. “In a few years we want to go from a few thousand sellers to millions of sellers on our platform.”
    Flipkart can expect some stout competition from Amazon in this race to accumulate sellers. “We offer the most comprehensive suite of options for sellers to grow their business online and make profits in India,” boasts Agarwal of Amazon. He points to solutions such as Fulfilment by Amazon (FBA) service, a pay-as-yougo fulfilment service, as enticements for sellers, wherein Amazon takes care of packing, shipping and delivery of sellers’ products.
    “We strive to do the heavy-lifting on their behalf while they focus on their core business functions,” adds Agarwal. Today over 75% of units shipped are FBA. Over 200,000 products are available for next-day delivery on Amazon. Over 60% of existing demands are already eligible for next-day shipping.
    Amazon isn’t holding back in its pursuit of both sellers and buyers. Another initiative it is aggressively rolling out is Amazon Easy Ship, an assisted shipping service that makes it easy for sellers to ship products across India. With Easy Ship, after order confirmation, sellers pick and pack the shipment, confirm to Amazon that they are ready to ship and Amazon collects the shipment and ensures that the product is delivered to the customer. Sellers benefit from low shipping rates, COD and pre-paid orders, scheduled pick-ups, faster delivery and automated shipment tracking.
   
    It is this headroom that both Flipkart and Snapdeal are chasing, with varying strategies. Analysts and investors say that Flipkart has built a stronger brand for itself due to its stronger urban reach and positioning, while Snapdeal is stronger in the hinterland. Flipkart is also the more valuable of the two — it was valued at $1.6 billion in its last round of funding — compared with $400 million for Snapdeal (as in February).
    Both Flipkart and Snapdeal are bulking up with an eye on the future. Flipkart’s chief executive Bansal told this writer in a previous interaction at the headquarters in Bangalore that the firm was open to inorganic growth. One such deal may shortly come its way, as it seeks to nail down a protracted deal for Myntra, a provider of fashion and apparel online. While the deal appeared to be progressing on schedule, at least two investors said the Myntra team balked at a final valuation.
    To try to have the scale to compete with Amazon, Snapdeal too is keen on inorganic growth. Most recently it acquired Doozton, an online product discovery firm, to expand its presence in apparel and fashion. Previously, it acquired Grabbon, Esportsbuy and Shopo to expand into areas such as sports equipment and Indian handicraft and strengthen its presence as a full-fledged e-commerce market place. “We are accelerating before takeoff,” says Bahl of Snapdeal. “E-commerce is going to be a $100-billion industry in the next 10 or 15 years and we need to stay nimble and scrappy and pick our battles.”
Even as both companies add muscle to their businesses inorganically, the real scale may come the hard way — from adding new categories and products to their baskets. For example, Flipkart has rolled out a range of furniture and wants to expand its presence in white goods. Snapdeal too is constantly ramping up several categories — including some unexpected ones such as car tyres where it is seeing strong sales. “People are buying sets of four tyres worth 40,000-50,000 online,” says Bahl. It also stocks 600 types of air-conditioners, 300 varieties of refrigerators and 400 water coolers from an assortment of sellers.
 E-commerce industry is graduating from one where companies are relentlessly chasing consumers to the next phase, where companies focus on value-added services such as supply chain and logistics and on how to retain customers, rather than spend precious money on lassoing new ones. Having been beaten to the punch by Amazon, Flipkart and Snapdeal are both hoping to make up for lost time with their competing offerings on this front.
“Value-added services will be the next big battle in India’s e-commerce market,” says Bansal of Flipkart. The firm, which launched eKart, its in-house logistics arm around a year ago, is now preparing to offer its services to third parties.
Even as Flipkart, Snapdeal and the rest of India’s e-commerce industry fortify themselves against Amazon, the multinational behemoth is setting itself to face the onslaught. “We are committed to the India market and we continue to invent and invest on behalf of customers,” says Agarwal of Amazon India. “With Amazon.in, we endeavour to build the most trusted and convenient shopping experience.” With revenues north of $200 million, according to industry estimates, Amazon India may have already laid down a daunting gauntlet for its Indian rivals. 


Flipkart & Snapdeal: Same, yet different
Flipkart FOUNDED IN: Sept 2007
INITIAL BUSINESS: Books
CURRENT BUSINESS: E-commerce marketplace
FOUNDERS: Sachin Bansal and Binny Bansal
FIRST OFFICE AND RENT: 800 sq ft cubbyhole in east Bangalore for a monthly rent of 800
FIRST BUSINESS TRANSACTION: John Wood’s Leaving Microsoft to Change the World for 200
HEADCOUNT: 10,000
REVENUE: $1 billion
INVESTORS: Accel Partners, Tiger Global, Naspers, ICONIQ Capital, Sofina, Vulcan Capital, Dragoneer Investment Group, Morgan Stanley Investment Management
ACQUISITIONS: WeRead, Letsbuy, Mime360 and digital catalogue of Chakpak

“We are prepared to take on global rivals. We are strongly customer-focused and we have the best logistics, supply chain and technology in the industry”
Sachin Bansal, co-founder &
CEO, Flipkart 

Snapdeal FOUNDED IN: Feb 2010
INITIAL BUSINESS: Local merchants’ marketplace
CURRENT BUSINESS: Fullfledged marketplace
FOUNDERS: Kunal Bahl & Rohit Bansal
FIRST OFFICE AND RENT: 300 sq ft basement of a house in New Delhi at 14,000 per month
FIRST BUSINESS TRANSACTION: Made by Rohit’s wife Parul for a restaurant called Salsa Salsa in Gurgaon. It was for 400
HEADCOUNT: 1,300+
REVENUE: Nearing $1 billion*
INVESTORS: eBay, Intel Capital, Bessemer Venture Partners, Nexus Venture Partners, Silicon Valley Bank, Recruit Corp, Kalaari Capital and IndoUS Venture Partners
ACQUISITIONS: Doozton, Grabbon, Esportsbuy and Shopo
                                                              * Market estimates as company does not reveal 

“We are accelerating before takeoff. E-commerce is going to be a $100-bn industry in 10 or 15 years and we need to stay nimble and scrappy and pick our battles”
Kunal Bahl, co-founder & CEO, Snapdeal  

 The big squeeze in e-com Around 80% of Indian companies are on their last legs, says a recent study by Allegro Capital
Almost no Indian e-commerce firm has turned a profit and investors are asking tough questions of promoters 136 e-commerce companies shut shop between November 2012 and April 2013, according to NextBigWhat Between 2010 and 2013, 52 e-commerce firms raised some $700 million in funding, but just 18 of them attracted a follow up round With VCs getting picky and FDI not allowed in inventory-led e-commerce firms, more firms could go belly up.

 Ref: An ET Article By :: Rahul Sachitanand

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The Power Of Connected Commerce In Today`s New Retail Environment

CONVERGENCE of Retail & E-Retail : An opportunity Not An Option Anymore!! 

 

1. Opportunity for Retail --- 3 Pillars

I- Overall Retail Market Size $ 500 Bn. Organized 8% - $ 40 Bn
Online-Retail has grown to $ 3 Bn in just 3 years from 2010-11.
By 2016-17, it is expected to increase 3 times to $ Bn.
So Can We Play A Role Here??
II-We are 1.2 Bn population. TG- 200-250 Million (Top SEC A & B, The Consuming Class). Internet Population expected to be 300 Million this year. 60 Million searching Online Portals. In 3 years expecting 150 Mn on Online Portals. Are we addressing them??
III- 25000+ Resellers on Marketplace Model Platform of Top 6 Players (Flipkart, Snapdeal, Myntra, Jabong, Amazon, Ebay). So why not we?? 

2. Other aspects of Opportunity are :- 
 
I- World`s second largest Mobile Population and growing. Coming on Online Portals
Opportunity & Threat of Mobile??
II- More n More women are coming on Internet. 40% women by 2015. They are big shoppers.
III- Opportunity in Tier-II & III Towns. Offline Retail is restricted to Big 40 cities. What about the opportunity outside??
1V- 40% shopping queries from Mobile & increasing.
 

This is a consumer led requirement.Companies really don't have an option. Challenge for Companies to give same seamless experience on each channel, same for every user. 

Ref: Excerpts from Indian Retail Congress 2014: A special thanks for the contribution of Mr.Nitin Bawankule-Industry Director- Ecommerce Classifieds & Entertainment, Google Indian Pvt. ltd.

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The Fastest $3Bn Of Indian $500 Bn Retail Industry!! But Its Still A Nascent Space Waiting To Explode...

Interesting Statistics Tells That Future Potential Lies Online Only...

India’s online retail market will expand by more than 50 percent annually for the next three years, tripling to 500 billion Indian rupees ($8 billion) by 2016, according to leading Indian research firm CRISIL.

That represents a thirty-fold expansion from the end of fiscal 2008. Still, Indian e-retail represents a tiny slice of India’s total retail market, which includes a vast informal retail sector, characterized by small and disorganized individual sellers rather than companies.

Online Retail and Organized Retail In India, CRISIL Research Feb 24 2014  CRISIL Research

India Online Retail Market 2007-2016, In Rupees, CRISIL Research Report, Feb 24 2014  CRISIL Research 


Indian e-commerce landscape

80% to 90% of Revenues shared amongst 4 majors in Online Retail of Organized Retail In India, CRISIL Research Feb 24 2014  CRISIL Research  :-

Flipkart - $1 Bn 

Snapdeal - Crossed $ 500M

Myntra & Jabong - Clocking $150 - $200M

Balance 10% to 20% contributed by approx 80 companies in this space.

For context, Amazon.com made $61 billion in global revenue in 2012 via direct and third-party sales, though Amazon.com.And two of Alibaba’s portals together handled 1.1 trillion yuan ($170 billion) in sales, more than competitors eBay and Amazon.Com combined.


The opportunity in Indian e-commerce is huge. Only 0.25 percent of India’s retail$(330 Bn)  is e-commerce, versus 4 percent in Latin America, 6 percent in China, 9 percent in the U.S. and 13 percent in South Korea. The market here could grow to $1 trillion over the next ten years, if e-commerce exists to the same level as in other emerging markets, of around 4 to 5 percent of retail.

Online retailing, both direct and through marketplaces, is expected to become a Rs 50,000 crore industry by 2016, growing at a whopping 50-55 per cent annually over the next three years,

The segment has been growing in India, with revenues surging from around Rs 1,500 crore in 2007-08 to an estimated Rs 13,900 crore in 2012-13, or a annual growth rate of 56 per cent, Crisil Research said in a report. 

Yet the sector still remains a nascent portion of the overall e-commerce segment ($ 10 Bn) in the country where the travel business dominates with about two-thirds share, it said.

However, it said, the scenerio is changing fast to pose a threat to brick-and-mortar retailers, not just of books, music and electronics, but also apparel and grocery.

"From around eight per cent share of the organised retail market in India now, online retailing will zoom to around 18 per cent by 2016. But as a proportion of overall retail, including the massive unorganised segment, it will be just over 1 per cent at the end of that year," said Rahul Prithiani, Director (Industry Research), Crisil Research.
Yet, he said, the potential is huge for example, in the US, which is the biggest market for online retail and the UK, the share of online retail is around 9-10 per cent.

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Does Facebook know more than Google!!....Is Social Media A More Attractive Platform for Brands....But for What!!.....How will it be measured..ROI??

Facebook’s India user base is an attractive proposition for brands, although they’re still to figure how to get the best bang for every buck spent on the social network

MobiKwik, a Gurgaon-based start-up that offers mobile payment services, has been on Facebook for two years. About a year back MobiKwik started paid advertising on Facebook targeting Android phone users, the most popular operating system on smartphones. Besides, a lot of the new users of MobiKwik coming on Android devices were in the 25 to 30 age group, and MobiKwik found that Facebook enabled it to target ads at this group. Says Sachin Gupta, digital marketing specialist, MobiKwik: “Being on Facebook helped us drive traffic to our app and get new users.” From start-ups like MobiKwik to Pigtails and Ponys, a Bangalore-based hair accessory label, more and more brands are finding it difficult to resist the lure of the world’s largest social network in their bid to connect with customers. Facebook now boasts 100 million users, a base the likes of HDFC Bank, PepsiCo India, Lufthansa, Tata Docomo, Nokia, Vodafone, Idea Cellular and Pernod Ricard have woken up to. Around end of 2013, Samsung launched the Galaxy Note 3 on Facebook, using a different creative to target men and women. And last year, through Facebook, Nokia was able to target feature phone users for its Nokia 205 entry-level smartphone model. Last month the Nokia X (Android phone) campaign on Facebook resulted in two lakh conversations, not just creating awareness for the brand but also resulting in the Finnish handset maker getting some muchneeded consumer feedback.
    Says Kirthiga Reddy, head, Facebook India: “There are over a million advertisers globally on Facebook. We are conscious that every dollar spent on Facebook is a dollar that advertisers can spend anywhere else. Our USP is the ability to do effective and efficient targeted ads.” While companies have multiple social media platforms to advertise on, including Twitter, YouTube, LinkedIn, Google+ besides banner ads across popular websites, what makes Facebook attractive is the 100 million milestone it reached on March 31. 

    Says Kartik Jain, head of marketing, HDFC Bank: “It [the user base] reflects Facebook’s increasing role in online social chatter.” Agrees Jitender Miglani, social media analyst at Forrester Research: “100 million Facebook users are valuable for any marketer. It will attract a lot of share of internet market spending.” It is particularly valuable for those brands that are following, what Rishi Dogra, head of digital marketing at PepsiCo India calls, a “consumerled strategy”. 


 Facebook for Feedback While for start-ups the Facebook user base is a quick access to customers and, hence business growth, for large companies it’s a multi-step platform, starting with using Facebook as a listening board before any business can be transacted. Says Jain: “We use Facebook to listen to our customers, build our image and crosslink across social media platforms.” For example HDFC Bank has 90 videos on YouTube that talk about aspects of banking in simple terms (simplifying fixed deposits, mortgages and the like), which it promotes on Facebook.
Wines and spirits maker Pernod Ricard has Facebook pages to do surrogate messaging like promoting the Blenders Pride Fashion Tour. At the other end of the spectrum, the National Skill Development Corporation (NSDC), which has a mandate to skill 150 million people by 2022, uses Facebook as a communication platform. And Pepsi has been on Facebook since 2009 and uses it to engage with brands and fans. Says Dogra: “It’s a continuous engagement model. We have created and executed campaigns including Pepsi T20 and launched our ‘Oh Yes Abhi’ positioning. The Pepsi brand page has 31 million users.”
Adds Ronita Mitra, senior vice-president, brand communication and insights, Vodafone India, which has brought back the Zoozoos for the Indian Premier League (IPL) that began on Wednesday: “We have 17.8 million fans on the Vodafone Zoozoos page. Facebook allows us high measurability and targeting and we aim to use the medium in line with its strengths.”
Facebook Knows The User 
The USP of social media and Facebook lie in their ability to know the user — age, city location, what device she is using, what she likes and so on. For instance Nokia targets the 18-24 year olds routinely with its new launches. Says Viral Oza, marketing director, Nokia India: “From a creative and engagement perspective this is our target audience. Social media and Facebook are high-involvement platforms, where youth converge. Ability to target helps get the message to right people, while scale creates the impact.” That ability to know the user enables Facebook to customize ads. For instance, Facebook has a custom audience feature, where a company’s data base of emails can be matched with those of Facebook users and messages can be sent out on the social network to the targeted user base. Another tool, generate a ‘look alike audience’, helps companies on Facebook find people with a similar profile to its existing customers.
Explains Gupta of MobiKwik: “If I want to target 25-30 year olds in Pune who drink vodka and use an Android phone, I can get such a user base from Facebook.” About 40% of MobiKwik’s ad spend is on Facebook, 10% on Twitter, 20% on banner ads across websites, and the rest on traditional media. 

    Online marketplaces are also using Facebook to drive traffic to their sites. For example, online fashion retailer Myntra uses Facebook logout ads — the ad that a user sees on logging out from Facebook. Says Vikas Ahuja, chief marketing officer, Myntra: “Facebook can help do age segmentation — we target 18-27 year olds, as that’s the internet-savvy population and key contributor to our business. We can do gender-specific targeting and by location as well. Around 35% of our business comes from women.”
    Facebook controls the algorithm and hence has the power to target users. Says Senthil Anand, head of account management at KRDS, a Paris-headquartered social media agency: “Half of the Facebook user base comprises 18-24 year-olds and 30% are 25-34 year-olds. On Facebook, companies can target people who have their birthdays on a particular day. And videos go viral via Facebook. It gives more visibility to brands.” KRDS started operations in India three years back, in Chennai.
    A young user base is attractive not just to internet startups and brands like Nokia and Pepsi, but for brands in more traditional categories, too. Like banking, for instance. Says HDFC Bank’s Jain: “Our follower profile on Facebook is similar to the user base of Facebook — a large number are below 25 and may have just started banking. The idea is to engage with them. We use Facebook to listen to customers and build our image.”
    For a brand like HDFC, being on Facebook helps in listening to customer issues, complaints and resolving them. However if the strategy is to only target fans, then companies are really missing the point, insists Facebook. Says Reddy: “We have studies that show fans buy 1.9 times more than non-fans. But fans are a small percentage of the target audience. Fan engagement is valuable in itself, but brands can do a lot more than that.”
    Start-ups see a great return on investment (RoI) on Facebook — like MobiKwik has seen cost of customer acquisition reduce and new user sign up increase via Facebook. For the bigger companies returns are slower to come by. Says Mitra of Vodafone: “A lot of the best practices for Facebook are still evolving and that makes it challenging to put a definite RoI on our spends.” KRDS believes its early days and at present its more about engagement than RoI. 

From Users to Buyers Engaging with the user base is what attracted companies to Facebook, but now they are keen to know RoI as well. Says Jain of HDFC, “RoI on social media is tough. It started as a listening board and the next step is lead generation. Our objective this year is to look at RoI from social media.”
RoI essentially involves converting Facebook subscribers into buyers. Say for instance a bank launches a home loan product, can it sell it to users of the social network? With no easy answers on that front yet, despite their presence on social media, most brands still dedicate a bulk of their advertising budgets to traditional media. Says Jain: “As of now, 1-2% of our total marketing spend is on social media. Bulk of the spend goes into direct marketing, onground efforts and digital campaigns.”
For Pepsi, RoI is an ongoing calculation. Says Dogra: “If you create an engaged community RoI will continue to accrue over the years whereas the investment on customer [or follower] acquisition is a one-time spend.” 

 ”RoI on social media is tough. It started as a listening board and the next step is lead generation. Our
objective this year is to look at RoI from social media”
Kartik Jain,
Marketing head, HDFC Bank

Facebook argues that the platform’s ability to target ads in itself creates better RoI than on any other platform. Says Reddy: “It’s the ability to drive a message in a particular way with zero-spillage that drives RoI. We are results-focussed. We are measured on business objectives and what we deliver fuels the next stage of growth.”
In the expanding world of internet — India has over 200 million users, expected to triple by 2016 to 600 million — Facebook dominates the social media play. Most of the online population (around 84 million) uses the Net via their handsets, and these mobile users may not find the ad intrusions on Facebook a pleasurable experience. Also, when it comes to mobile internet, advertisers have Twitter, YouTube and other social media platforms to pick from. Says KRDS’ Anand: “Brands want to invest in YouTube as well. Video content grabs better attention. That’s why Facebook now allows videos. At present YouTube is second most popular for advertisers after Facebook.”
    Adds Dogra of Pepsi: “Organic reach [on Facebook] has been consistently dropping over the past three years. While this is a function of the larger network effect, it limits the ability to sustain a continuous engagement model as reliance on paid reach increases.” Organic reach is the number of people who would see anything you post without any paid media push.
    Facebook’s 100 million users will have the brands following it, as that’s where the young consumers are. Even as companies search for RoI, Facebook will look to monetise that user base fast given that the social media platform gets just $40-50 million (according to Forrester Research) of its $7.87 billion global business from its second largest user market after the US.

Ref: An ET Article By Shelley Singh

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Flipkart & Myntra on merger talks.....Does it bring synergy for both the firms!!

Flipkart & Myntra on merger talks.....Does it bring synergy for both the firms!! 

Are these mergers the only way ahead in such a nascent and evolving space!!!

Consolidation been always a speculation in Telecom, when has it creeped into this B-World!! Oops did I repeat this ....

Yes, very much dominated by Bansals (Top 4 Companies), this E-Commerce is interchangeably used with B-Commerce in this World...

Flipkart will surely offset something by adding a a brand to its stable, a category,  which is the most profitable of all and may speed up its search for some bottom line. But the poster boy of e-commerce does have it all to develop a brand of its own in this category and show its mettle & supremacy in the larger benefit of this space.

For Myntra, who have successfully established themselves as a Niche player, what value will it add if merged with a Larger Entity!! The probability for a Brand to loose its sheen and for customers an option, is pretty high. Two separate identities competing in the same space,which has so much to offer for the right players rite now for at least sometime, is  such a great situation for the larger benefit of all the stakeholders in this space.

As a consumer I do not wish to loose options, As a marketer, I do not wish to loose upon an opportunity to admire a Brand , and at last As a business professional, I do not wish to let a fear loom over all the Niche players in all the business spaces to be running only for Scales in order to avoid such merger threats.......Beware of Accelerated Tigers!!

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E-Retail In India is Graduating to Differentiation With Hons In Positioning!!

Flipkart & Snapdeal Eying Everything from Automobiles To Grocery, Fashionistas Myntra & Jabong Busy In Creating Their Niche!!

So what if its still an evolving business, Rules have started being written and Players are already busy in setting their Tactics and defining their Territories!!

Flipkart has identified an opportunity 6 years back and shown guts to build a business from scratch in a virgin territory. It really takes a lot to be a prime mover, advantages can be reaped much later and that too are not sure. As there were no peripheral services and Business Confidence to support Online-Retail Business Model, FK had to integrate across value chain to make this model a really sustainable one!! The bets paid off , hats off to their Vision and a superb execution of their smart strategy. These Bansal friends really showcased the world that what India can do without the So-Called Ecosystem for Innovations and Entrepreneurs, ` $1Bn Turnover in 6 Years` , An year faster than the Big Daddy Amazon, really made them the Darling of E-Commerce. Their Both the S are clear, Strategy & Sight, they want to sell anything and everything , wish to address all needs of an individual Indian Consumer. They have started it so wannabe Ace.....The Amazons & Alibaba`s of Indian E-Commerce Space!!

Working Visa problem for Indian professionals at US, gave birth to India`s E-Commerce Blue-Eyed Boy Snapdeal aka Kunal. Sd`s Kunal Bahl is so synonymous with the Brand, he is the CEO , he is the Brand Ambassador , he is such a dynamic leader who knows how to be innovative and successful at the same time!! With a friend who again happens to be a Bansal, he incubated an altogether different business model of E-Retail. His belief in a Marketplace Model just gave wings to this company and in just 4 years he scaled-up Snapdeal to skies. He is going to touch that $1Bn Mark in  his 5th year of operations only and creating a new record. He challenged the Inventory Business Model and re-written the Rules of Business. Now everyone is following the same. Beware!! FK , how will you differentiate....These two companies are showing the spirit of  the true competitors following each other but how will they differentiate from here onwards!!

Myntra & Jabong both have got their strategies in place, after testing waters they made a quick decision to be a Niche player. So they differentiated themselves with the established players (Sd/FK) thru their offerings. Actually they believed in Sanity of business, i.e the Bottom Line, they went after the categories which are the most profitable, The Apparels. While their counterparts`s too much involvement in Vanity, i.e the Sales Turnover(Dealing in All categories & looking for Scale) still keeping them away from profits since their inception.

Now Myntra & Jabong are trying their hands at Positioning to really take advantage of their Focused Niche Strategy. Whether its association with LFW, Iconic Designers Rohit Bal, Films like Main Tera Hero , Yeh Jawani Hai Deewani, Bhaag Milkha Bhaag and Dhoom 3 , or exclusive arrangements with World`s top  fashion brands, it is only helping Jabong to set a clear positioning for Fashion oriented consumers, its TG. Who have started perceiving Jabong as some fashion destination which they are not hesitate of trying. On the other side Myntra also want to make it clear to its TG by clearly positioning its Brand in association with Fashion Design Council Of India for WIFW. Myntra wants to be an aspiring fashion destination for fashion oriented Indian consumers and seriously trying out many options to be associated with Fashion word to portray as an adorable Apparel brand.

But are they not heading towards the same destination, the same Brand image!! It again takes us to the same question-The challenge lies that how to differentiate from here!!

Tactics like Exclusive Brand Engagements/Promotions, Same Day Delivery, Discounts are just operational measures which don't seem to give sustainable competitive advantage in long run. The market is still nascent, these tactics may work for sometime now but some real Strategy is required to be a long run WINNER!!

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