E-Business Summit: CAGR of 100% For Online Transactions Of Physical Goods Over Next 5 Years

The next session of the IAMAI e-Business Summit focused on the challenges and opportunities in e-Business over the next couple of years. Session chairman, V. Ramani, Vice Chairman of Connecturf spoke about where he thinks opportunities lie – in mass customization (mera wala cream, large sized clothing for large sized people, rare fish), comparison and aggregators. He mentioned that there should be sites that compare deals from various travel portals (he’s obviously not heard of MeraTrip and TripMela?). He also voiced his disapproval at the number of me-too’s in the industry. How much do we know about the consumer? The consumer is getting skeptical, he said, and we need redressal forums. There’s also a need for effective back end – he knows of at least 20 cases where clients did not take up hot prospective leads because they didn’t have a proper back-end.
K Vaitheeswaran, CEO of Fabmall said that when they began operations, only 1 percent of Internet users wanted to transact on the net. Now a larger base is available and Fabmall’s business will double each year for the next two years. Retail will drive people to the net since, for them, Internet retailing will be part of retailing in general. The inflection point is growth of broadband, not growth of number of users – good broadband will allow people to browse products. The movement of goods in the country across state boundaries is a problem – if you move a mobile phone to deliver Bangalore to Kolkata, it gets stuck at the check point at Bhubaneshwar. While this needs to change – I don’t think it will over the next five years. Vat is not a national phenomemon, and since a majority of our transactions are across staets; retail margins in India are lowest in the world, and we have to pay double tax. Still the overall scenario looks great as well as commerce is concerned. The next 5 years will see a CAGR of 100% as far as online transactions for physical products is concerned.
Deep Kalra, Founder & CEO of Makemytrip.com said that around Rs. 4000 crores globally will be transacted on online travel this year. There’s money going to B and C towns since they have poorer alternatives offline from online, while it is the opposite in metros. 74 percent of Makemytrip’s transactions are coming from non-metros. Most of the IRCTC’s users also are coming from small towns. The total number of English speaking population in India is around 100mn, and internet has 50mn users…beyond a point, not having a vernacular site will be a problem. The older generation is more comfortable with the mobile, and still scared of the PC