“The e-commerce journey is a marathon --- focus and fitness are required to succeed,” Amarjit Singh Batra, CEO, OLX made this observation as he delved into the various aspects that are shaping up the e-commerce landscape in India. Speaking at the inaugural Golden Cart Summit and Awards held in Delhi, Batra dug deep into his experience, spanning more than a decade and a half in the internet and e-commerce business, to highlight lessons that have enabled players to grow.
Quoting Steve Jobs on “it is very difficult to connect the dots going forward,” he pointed out that much of what transpired in the connected space since 2000 has contributed to the digital India we see today. Reminding that India has always been a market hyped for internet and digital, even though the growth itself has been slower than expectations, Batra listed some of the lessons that have grown digital businesses.
Collaborate, ScaleDividing India’s digital journey in half decade phases, he said that in the third phase, the biggest game-changer was networking. “Don’t think you can change the world alone – you need people. Facebook is a great example of such collaboration,” he said.
Social platforms and messaging apps that impacted people behaviour brought both great news and busts. “But growth journey will always have ups and downs. You have to navigate these to reach a peak, and India will find its way there,” Batra said.
Another lesson that he stressed on was for businesses to be scalable. Online businesses in their present avatar work well also because they are “low touch” business, allowing various aspects of the connected world to come together to help grow the business.
Evangelise, FocusA pertinent problem in the current e-commerce platforms, especially for players within a category including horizontal e-commerce brands, is that people are unable to distinguish between some of these brands. While the market itself is a contributor to this, as internet and e-commerce in India is still in a nascent stage, the responsibility on the e-commerce players is to educate and build awareness.
“Everyone knows the brand but not everyone is a user and therein comes the problem. Those who have evangelised and educated users have benefitted in the long run,” Batra said.
A fallout of an immature market is the ‘land grab’ tendency. Some e-commerce players have diversified in areas such as logistics or payments. Diversification that is not market driven can be a challenge. “Some players are struggling, and diversify too fast because they feel they will not grow if they don’t. We have to see examples like China here. China grew with extreme focus and now it is diversifying. It may not be wise for Indian companies that have as yet not made that mark, and it is essential that they keep the focus on the core offer,” Batra cautioned.
Strengths & ChallengesThe e-commerce business is offer sensitive, making loyalty a challenge. Attributing this to the business model in India, which is “inspired” already, e-commerce players’ responding to competition has also created a certain lack in differentiation.
The choice between specialising and going horizontal is another area that brings its opportunities. Since horizontal allows multiple options to consumers, it is easier for the brand to bring more people to the site. Horizontal players can also begin a vertical more easily. The clear drawback is the difficulty to create difficulty in positioning.
Vertical on the other hand allows to build a strong positioning in the consumer’s mind. It can enable more variety, experiences, personalised and customised experiences for customer. However, verticals will have less buyers and at times need a horizontal platform to survive.
A future of focusFor companies such as OLX that are not building a business to exit it, the gameplan is more long term with a focus to make the proposition work. “Sometimes e-commerce players give up too fast. It is important to keep on hitting at the problem from various angles. At OLX, we have said, we will make it work, and that is what we do,” Batra informed.
Speaking to the 250 plus audience at the forum on the role that gross merchandise value (GMV) can still play, when it is not the only metric to build a business, Batra reminded that even as valuations were high in India, the focus for any company should be to build a healthy business.
He concluded by stating that despite the grey clouds and negative sentiments in the industry at present, there is significant headroom in India to grow. “Don’t be disheartened that everything is over. It is a great time to enter the e-commerce business in India. The business will evolve constantly and newer players will bring disruption, keeping the rest of us on our toes but when is that bad for any industry or consumers,” he said.
