We've all read about how eCommerce is bigger than it looks. There are needs other than actual purchasing that eCommerce fills. Amazon, it seems, has overtaken Google in the US as the startingpoint of product-search. In order to make a purchasing decision, you need information, and an eCommerce site is (or should be, it is believed), in the business of providing the same. Therefore, what you can also do is also use eCommerce only for the purpose of decision-making, deciding what to buy, maybe even where to buy - but not actually buying.
What also happens is the reverse - people don't know what an Xperia J looks like, weigh or feel like, so they go to a mall, check it out, come back and purchase online where prices are better for the same standard product. This is split by consultants (naturally) into (guess-what) a 2X2, with segments called Research-Online-Buy-Offline, Research-Offline-Buy-Online, and of-course the other two blocks of people who complete the buying process Online or Offline. The transaction will be called Online or Offline basis where it is *consummated*. So this is the first thought I'd like you to hold on to.
The third thought is a simple question - is Cash-on-Delivery eCommerce? The "transaction" i.e. the exchange of goods for consideration really happens after the goods are delivered to the shipping address, acknowledged, checked and then paid for. The entire decision-making process and the commitment to buy has happened online, but the transaction is really offline.
Now the second thought is just an extension of the same logic to say there are people who extensively use the mobile phone to research, but then open their PCs / laptops next morning to transact - maybe because screens are larger, or keyboards are better, or connectivity is better, or just due to plain habits. The use case for the reverse is thinner but still non-zero. You could have used your laptop to make a decision (where you can actually compare four products'-specs side by side), and then used your mobile to monitor prices and then when you saw the price drop to the level you wanted - maybe you were on your way home then - you just clicked on 'Buy' on the mobile.
Now putting it all together, if you read this at one go, it will appear that Mobile Commerce is bigger than it is. If CoD is eCommerce (and rightfully so) then mobile-initiated transactions are m-commerce. That can help change perspectives of a lot of organizations in countries like India where we keep thinking m-commerce has not happened yet just because there aren't enough transactions culminated on the mobile.
The "transaction" i.e. the exchange of goods for consideration really happens after the goods are delivered to the shipping address, acknowledged, checked and then paid for.
ReplyDeleteThere's a miss.. NO OPEN BOX deliveries.. so no checking.. that's where the miss is.. CoD is mere a completion of the process, where as the actual buying process is already completed.. India and China are the only countries where there is CoD facility..
Also, regarding the MCommerce - it's still in evolving phase, not many of the companies are offering app stores (none in India)for buying goods through mobile applications.. as the online payment culture is very naive... Will take a long time for people to develop a confidence to share the payment details through mobile phones..
The whole industry is in a evolving phase n many of the players ve already started back off plans.. On the contrary Amazon entering the space will boost up the customer experience n indulgent.
@Rohit: Valid point, taken - on closed box deliveries.
DeleteMany companies in India, however, not only do open box deliveries but actively encourage users to "try and buy". Some others, when the buyer wants a size 8 shoe, send a size 7 and 9 along - it's an evolving space. Closed-box CoD could the beginning of an addiction that demands more and more to sate.
Agreed on the early evolution of m-commerce too. It'll take time, it always takes time. There's a post called The Escalator Problem that I did in the beginning of this blog that talks exactly about this.
Hi Ratul,
ReplyDeleteAgreed, the indirect conversions taking place via mobile is often not regarded as much as it should be.
Coming to the point of Cash on Delivery, it is something that is not feasible for ecommerce industry. Options like "Try n Buy" help you acquire customers but these come at loss.
Why do you think haven't companies gone the route of cheques and demand drafts for making payments? There is still a huge chunk of users who aren't comfortable transacting online and there are still many who wouldn't make the effort of knowing how to buy online.
However if these users were given an option to deposit a cheque, that would have a lot more success rate. There are schemes like Ghar Pay and this is something that everyone could identify with immediately.
Do you think this is an option that companies could look at and what could be the roadblocks that prevent it from succeeding?
@Colin: glad you agree with the subject; on CoD, a lot of industry people would agree with your views.
DeleteIn principle CoD was to provide for a way around the trust / trial barrier, but we know it's a more expensive option (CoD charges, returns and product-soilage). The quality of buyers, the low (zero) involvement are other issues industry players face. Whether it's feasible depends on who's measuring you and for what - if my investor is happy seeing a transaction / buyer number without this filter, it's a great lever for me. I don't think the industry in India is worried about profitability for now - most discussions are around cost of acquisition vs. lifetime value (as if you really acquire someone for life).
For the buyer, what CoD solves for the lack of bank accounts / instruments; also for the grey economy where people would prefer to pay in cash and not leave a trail. Cheques and drafts still have these issues - also cheques are postpaid and subject to realization, drafts take a long wait in the queue at the bank - so not really convenient for either buyers or the eCom site.
These could be some of the roadblocks - not all, but enough for many.