Showing posts with label Apple. Show all posts
Showing posts with label Apple. Show all posts

07 April, 2021

Buying Cars Online is Passe


After coming back home from the Voting Booth, I was sipping my 3rd cup of coffee watching breakfast news on Tv. I showed my kids and wife, meanwhile two AVs of Tata Safari, the one which was produced in the late 1990s and the one produced this year. They were pretty impressed than I thought, honesty. Then I showed a Youtube Review of the vehicle. Though the reviewer spoke in Hindi, which kids do not understand exactly, he showed the features of the vehicle one after the other and having spent all their life in a single 4-W model, that is our beloved XUV500, they were mighty impressed with the newness that the Safari bought to experience. And mind you, all this even as we were watching a review of the model on a SmartTv. 




One day in 2012, my wife and I went around looking for an upgrade to our Hyundai Verna. Having shifted to Chennai from Bangalore and with both our parents around here, we thought a slightly larger vehicle (read: 7 seater) would be useful for long drives. We saw a few models but took test drive of just one, which was for a distance of 4 kms. After we got back in to our Verna, my wife quipped – either we buy the XUV500 or just continue with the Verna. Nothing else. My second daughter was 9 months old then. A week later, we were on our maiden trip to our Family Temple in a brand new XUV. After 66 months, sold the manual model and bought an automatic – everything else inside the cabin remaining the same but for the gear shift. 





During the lockdown period in 2020, I felt it made no sense to own the “White Elephant” anymore – a Ship is not built to be docked, after all. Thanks to a few good friends and fellow auto- enthusiasts, I refrained. Boy, I ain’t complaining. Have driven almost 18,000 kms in my XUV since Aug. 2020 when I kicked off my road trips, especially on the work front to meet my Colleagues, Distributors (of Levista Coffee) and to see first-hand the Retail Experience. Now that I am driving so much, I have a deep urge to move to another model, what with the same cabin, interiors and features in both models of XUV500 since 2012. 





I never imagined that a YouTube video would impress the secondary decision makers, rather – the Influencers – in the household while making a beloved purchase such as owning an automobile. Test Drives are an important touch-point in selling 4-W. In fact, one of the biggest reasons for success of Royal Enfield, where I worked from 2012 onwards and set-up 160 Dealerships pan-India was that the company allowed patrons and prospective customers to take the vehicle for a test ride. And alongside, offered experiential rides over weekends, special commemorative days, etc. This, worked well for the brand. When a user uses a product first hand – something that Apple first debuted in the Electronics space 2 decades back – the experience cannot be replaced by older means such as reading reviews or word of mouth from other users. 

Over the past few years, online shopping of Automobiles made some noise. In fact, I bought, rather booked my XUV500 in 2018 online for a token sum of Rs. 5,000 for which the Parent company gave me accessories worth the same value as a token of shopping online. Today, things have changed. It’s all about the experience. While family members may not give much heed to what’s beneath the hood, what matters most are the features, comfort and safety. My elder kid exclaimed when she noticed there were 6 USB ports in the new Tata Safari – something that’s perennially important for the Millennial Kids, perhaps. Wife was all excited about the Captain seats in the second row too, which gives great comfort, The very fact that a review (which is not at a showroom but in the living room) can entice potential customers, is in my humble opinion, a tip of the iceberg. The new “influencers” of buying behaviour want everything in their palmtops. Are companies listening? What’s the next big thing that could happen in this space? Virtual Reality, perhaps? Like driving inside the cockpit… Well, the day is not too far, I reckon. And of course, the charm of trials – can never be taken off ever.

19 July, 2020

WFH – Boon to Retailers & Brands

Many companies have advised their employees to plan WFH until end of this Calendar year. This means a good / happy news as well as a significant job loss for millions. That more people will lose lives and livelihood for the grave mistakes of themselves and the Governments across the world is a reality that we are staring at. However, the eternal optimist that I am, I can already see green shoots in certain segments of the consumer business. Some of you may recall that during my Webinar sessions in the months of April & May, I had referred to certain categories which is only bound to increase if not at least sustain its current business opportunity. Most of the daily household items have seen consistent growth even during the extended lockdown while Food related FMCG have shown tremendous growth. Categories such as Coffee, Tea, Sugar, Flours & Pulses have seen a spurt in sales for many brands while Retailers, albeit with a shortened operating time than before, are not complaining, thanks to consistent footfalls and increased bill values. 

However, what has taken many Retailers, Distributors and the entire supply chain by surprise is the huge surge in work-furniture for home and Electronics + Consumer Durables. We ourselves went shopping last week only to find that Godrej Interiors had completely run out of stock for 4 weeks, Home Town had absolutely no sight of when stocks would be replenished, over 40 customers merely waiting to enter Home Stop and hitherto B2B players such as Featherlite living up to the unprecedented opportunity and serving customers with their backend capabilities being spruced up. Traditional Furniture Retailers are not lagging behind either. Actually, I see many of the neighborhood shops doing brisk business with the highest demand for compact desktop / laptop chairs under Rs. 4,000 a piece followed by chairs that suit or double up for other purposes. I have also been hearing a few of my Architect-friends getting calls from their Business Clients to set-up / renovate their homes to be able to work. 


The other category which has been doing extremely brisk business is Cosnumer Durables, Home appliances and personal electronics. While Amazon & Flipkart haven’t resumed their deliveries fully across geographies, consumers are literally seen shuttling from one shop to another for want of peripherals such as computer mouse, headphones, Mobile Phones with 4GB RAM (to be able to take up Apps such as Skype & Zoom) under sub-Rs. 10,000 and most importantly, Laptops. I guess desktops as a category is passĂ© – one, it occupies too much space and it’s immobile within the house as well as across users, which gives a push for laptops. 

In my own personal case, I had to wait for over 6 weeks to get myself a new MacBook Air, an upgrade after using the previous Air for 5 years. Thanks to good friends, I was able to lay my hands on one out of the two pieces that landed in Chennai after the recent lockdown. The folks at Apple India as well as Apple Retailers say with a grin that most models of MacBook / iPad are out of stock and there is no immediate visibility of their arrival into the stores.


With the State Governments finally budging for schools to conduct Online classes – the High Court of Tamil Nadu has especially allowed private Schools to collect 40% of the Annual Tuition Fee for the present academic year – Online Classes are getting more and more real. The state run “Kalvi Tv” in TN shall also showcase online lessons while every other State Government is looking at similar measures to ensure continuity of education. This further means more requirement of laptops, earphones and so on. That there is no shortage of Electricity at urban and semi-urban homes is a big advantage.

Smart Entrepreneurs, Individuals and Businesses have lapped up this opportunity. A second-degree associate of mine who was retrenched by his employer, a Hardware Engineer with 10+ years of experience has taken up direct sale of Laptops to Corporates making a neat 4-5% commission on the purchase value. He claims his income, although a temporary one is lesser than what he used to make in his previous job while he reconciles that he is unsure how long this would go on – his parallel entrepreneurship and the Corona lockdown. Whichever way, make hay while the sun shines is the way forward I guess. 

Meanwhile, traditional retailers in both these categories are indeed an aggrieved lot. For Example, the Founder of a family business which is in to Electronics for the past 2 decades has been adamant on downsizing his margins for want of volumes. He claims that this one-off discounting model on gadgets such as Iron boxes, Personal Shaving Equipment (for men) and other household items such as mixer grinders and refrigerators will hurt the business once the challenges are over, especially around Deepavali 2020. What he doesn’t realize is whether he would be operational until then, running 20+ stores across the state, employing over 300 people and a joint family of 4 siblings and their wards. 


In another instance, a proprietary furniture dealer near my home refused to entertain any sort of reduction on Chairs claiming that these items were already on high demand and that he sees no reasons why they should be sold at lower prices. That there are literally 100s of furniture shops around is something the gentleman should realize soon. Maybe, he wouldn’t. 

I am actually planning to write a book which would go by the name “Corona Millionaires” which could be release in 24 months or so. No, I am not referring to the likes of billionaire Shri. Mukesh Ambani and his ilk. I am referring to common people like you and me – who found this crisis as the biggest business opportunity of their lives. May be a Netflix original too. It could rake in more money than what many Entrepreneurs would make during this crisis.

24 December, 2019

Luxury Retailing - Retail 2020 (Article #3)

I started my career in Retail in 1997 scooping ice-cream at Baskin Robbins’ second outlet in India and first in Chennai (then, Madras). As the current decade comes to an end and an exciting one unfolds, I am writing a series of 20 articles over 20 days (10 in Dec ’19 starting 22/12 and 10 in Jan ’20) on the various Retail developments I have personally witnessed since 2001 onwards. Today, I have written about the Luxury Retailing Industry which is pegged at US $ 1.3 Trillion globally and growing at a CAGR of 12%.


Many years before when I was responsible for setting up India’s first ever retail arena at India’s first private airport at Bangalore in 2006, I had a special focus on creating a luxury retail zone. When I approached global brands like Apple, GAP, Omega and many others in India and abroad, they didn’t evince much interest. For India was not even a budding Luxury market then. Mont Blanc writing instruments, which is among the Top Brands sold across Airports worldwide didn’t have a presence in India at the time with a standalone store and we were keen to bring them on board at the Airport with an exclusive store, but the principals politely declined the offer. I have a long list of such disappointments from my tenure at BIAL. 

Today, things are different. The global luxury market is pegged at US $1.3 Trillion annually (including services such as Travel, Resorts and Hospitality) and India alone has an estimated market size of $6 billion growing at 9% CAGR since 2012 – across various categories ranging from Watches to Clothes, Automobiles to Cigars, Wines to Writing Instruments and so on. Incidentally, the Luxury Market size of China is pegged at $25 Billion and growing twice as fast as that of India. USA remains the largest contributor to global luxury retailing at over US $85 billion followed by Europe at an estimated US $65 billion. 



Much of the luxury consumption in India is attributed to two budding customer segments – HNIs and their families living in Tier 2/3 markets and HENRYs – High Earning Not Rich Yet Individuals. Apart from these, the core segment remains eminent business families, celebrities in Sports and Arts and professionals in Industries such as Banking, Manufacturing, etc. to name a few. A “Titan Watch” and a “Raymond” Suit were the preferred gifts for the bride and groom at most middleclass households (including yours truly) two decade back. But things are much different today. Most Indians who consume luxury brands neither have an idea why the brand is luxury (rather, priced so high) nor do they appreciate the craftsmanship of the product. As the saying goes – Aim for the sky and you would end up at the roof, I was eyeing a Patek Phillippe for over 3 years but finally ended up with a Longines Limited Edition a decade ago (which happens to be my last luxury catch @ Rs. 1.40 lakhs then!). It was a lot of hard-earned money coupled with dreams and ambitions built over time (Miles2Go). But when I see the GenZ & Millenials sporting luxury brands today, be it a shoulder bag from Prada or a pair of sneakers from Nike meant for trained athletes, they do not appreciate the purpose of the luxurious product beyond the “badge value” it adds to their self-esteem and prestige. 

Same is the case with electronic products, especially from brands like Apple or Bang & Olufsen. Apple fanboys (and fangirls) stand in Q all night to buy their coveted new launches since they mostly appreciate the features the product offers. Unlike in India, where the latest iPhone is more a symbol of prestige in the society and the associated benefits (like getting a table faster at a restaurant – I am not kidding!). While brands like Bose remained “luxury” and niche until a few years ago in India, thanks to deep discounting and presence on e-commerce websites, they are now competing with local and Chinese imports in their respective categories. 


Having said that, Luxury Retailing in India is still in its infancy. Even if the market grows at 10% CAGR for the next five years, we would still be less than 5-8% of the global market. No wonder Indian discerning consumers prefer to make a trip to Singapore or Dubai to shop for clothes and watches every few months. That they fly Business Class and stay at Mandarin Oriental or The Palms Jumeira is adding up to the global market size anyway.

09 June, 2019

Self-Checkout or Assisted

Earlier, I wrote in my article for The Economic Times about how Self-Checkout or even an assisted one would make a cut in the Indian scenario even as Indians are embracing E-Commerce like no other and the Indian E-Commerce business is expected to cross over USD 50 Billion by 2025 by various estimates. Meanwhile, the Retail Industry in India is pegged at USD 500 Billion with just about 10% being Organised or even semi-Organised (meaning those shopkeepers who use some form of PoS for Billing & Accounting). Almost half of the semi-organised Retailers do not have an end to-end PoS solution and this is the latest trending opportunity in the realm of Retail Entrepreneurship with a number of existing players upping their ante while a whole lot of new technology is being tested and introduced by new Start-Ups. Interesting days ahead indeed.


Meanwhile, I visited the Apple Store on Orchard Road at Singapore during my recent vacation to the Country. It’s been 11 years since I travelled abroad and was yearning to see the Temple of Technology to seek the blessings of the Almighty Apple (sic). I have owned every Apple product ever made by the Company in it’s recent history, starting from the iconic iPod in 2007, iPhone (several of them!), iPad (two of them), MacBook, Apple Tv, Apple Watch and Airpods. I felt like a little kid inside Disneyland when I entered the Apple Store, that I was walking all along the counters and seeing the whole retail theatre with glee.  I wanted to interact with the staff and hence gave a request for a query on iCloud Management. I was given an appointment and was asked to wait for about 40 mins which I agreed with utter happiness so I can spend time there seeing how Apple consumers interact with the Apple Store. On the first floor was the Genius Groove – apparently the Genius Bar has now become a fledgling hub where atleast 100+ customers & staff can be seen seated together and interact on various service issues. I picked up my iPad and started browsing with the free internet provided by the Apple Store – a whopping 110 mbps even as so many of them were sharing the same internet. Finally, my turn came and I was assisted ably by Justin who clarified some basic as well as a few complicated queries on iCloud. He was extremely polite and knowledgeable and sent me back happy. 


I returned a day later to buy the new iPod which was launched on Thursday 30thMay 2019. I saw about it on their website and ended up at the store to pick it up. The staff themselves were surprised that it was ready for Sales! I placed an order on the mobile PoS which the staff had where I was allowed to browse the options, colours, etc. I placed the order and waited for 10 minutes by when another Apple Staff brought the product and handed over to his colleague. She placed my order on the same handheld PoS and my transaction was completed in less than 2 minutes. I was pretty excited doing this transaction and saw first hand how Omni-Channel Retail actually works. While I have seen similar technology being made available at a few Indian Retail Stores (Croma, For Example), the seamlessness and the convenience was fantastic from a user experience. 


There are atleast 20,000 companies, small medium or bigger who make PoS solutions including market leaders like GoFrugal, Wondersoft, Pathfinder, etc. to name a few. The solutions are priced from a one-time payment for as low as Rs. 10,000, SaaS models with recurring payments, enterprise solutions and so on. At my own Start-Up “Smiling Baby” – a chain of baby care stores, we signed up GoFrugal Technology’s eponomous “RayMedi” software which is now christened “RPoS” and have invested heavily 2 years backwith a module to manage Inventory across our multiple franchise stores including product management, adding inventory, live stock status and much more. With two running stores and two more in the pipeline, we have put the software to great use although we are yet to unlock so many hidden features including the omni-channel option where in we can rotate stocks across stores based on user requirements. Also, there is an option to connect the software with a mobile App, so Consumers can actually check which product is available at which store and accordingly, they can place orders online for a home delivery or a store pick-up. And this, for a small Start-Up like ours which is certainly not heavy on piled up cash investments. 

Omni-Channel offers a great opportunity for SME Retailers as much as the established ones. Time to make the most of it now.

03 October, 2018

My i Vs. Mi Experiences

I purchased my Mobile SIM card for the first time in the year 2002 in Chennai from Aircel and that number is still active. My my first handset was an Ericsson followed by Samsung R220, the first mobile phone launched in India with a multi-colour display. This was followed by a few Nokia models over a decade and a Sony Ericsson P1i before I finally moved to Blackberry. A few models and 4 years later, I moved on to the Apple Ecosystem with iPhone 4S in 2011. I upgraded to 5S, 6 and 7 over the years as well as including other i-Devices such as 3 generations of iPod, 2 variants of iPads, a MacBook, Apple Tv and finally an iWatch. With a paid plan for Apple Music and a huge storage on iCloud, I don’t have to worry about my stuff on the hard disk anymore, for its all safe and secure, “Up in the Air”. Hopefully. With a seamless integration within the iOS, it is almost impossible for me to move out of the Apple Ecosystem anymore and I guess I will remain clued in here. however, when the announcements for new models of iPhone XS & XS Max were announced last month, I had less interest than last year for the iPhone 8 & X. Somehow I felt that Apple has stopped making mobile phones for common users and is perhaps focusing on a niche segment who can use most of their offering.


Notwithstanding my self-prejudice for a coveted Brand and its products that I love so much, I decided to visit a Retail Store to physically touch and see the new launches. On a sunny Chennai afternoon last weekend, visited an upmarket Mall in the City, which for some strange reason has four retail stores next to & opposite to each other who sell multi-brands of Mobile phones and accessories apart from an Apple Premium Reseller (APR) and a Mi Experience Store. Even before I could visit the APR I happened to see the new iPhones at one of Tamil Nadu’s leading multi-brand Retail Store. The Staff were as uninterested as I were and they hardly explained why the new damn thing costs a lakh and fifty thousand bucks, with which one can but at least three new laptops or 15 mediocre mobile phones or perhaps even 5 top-end new mobile phone models. I didn’t bother to even ask queries and quickly moved on to the next chore with the family. Was having a sad grin on my face that the same “me” had waited at the same Mall five years back in a queue for four hours on a sunny November afternoon along with my better half to buy my Apple iPhone 5S on the launch day. How things change, huh!

My wife has been asking me to buy her a wearable device to measure footsteps, which we have been exploring for the past few days. Surprisingly, Croma and Reliance didn’t have a wide range while the Mi Experience Store at Express Avenue Mall didn’t have the widely popular Mi Watch 2. The staff at the Mi Store was unapologetic that it wasn’t available at their flagship store in South Chennai and instead advised us to visit a few days later when it would arrive at the Store. Really? Do Brand staff think Customers will Queue up anymore for their once coveted products? We ended up buying at another store whose Sales staff surprised us and matched the same price as the Mi Experience store where the device’s price is Rs. 200 lower than outside. At the Mi Experience store, I saw a wide range of products including LED TVs but another flagship Mi A5 model of Mobile Phone wasn’t available, once again. 


Recently, I was reading how Best Buy has embraced omni-channel in the US by ensuring a wide variety of models across Brands were made available at the Store and the Retailer also offered multiple models of delivery such as in-store, same day delivery, Day +1 delivery, at home delivery, etc. This was the only way they could counter the intense competition from Amazon in the US. Back in India, things remain unchanged. Croma has a namesake omni-channel model but the staff are disinterested in taking the effort. The bigger surprise was Mi Experience Store, where the staff could have immediately engaged with us, potential buyers of a Watch to browse the range on a device kept right at the store where one could browse and buy with a deliver in a day or two, Lost opportunity. 


This is just my personal experience and am damn sure there are millions of such experiences across the world where Customers are walking away without purchasing, thanks to disinterested staff and their respective Managements. A report in the Economic Times suggests that of the 1 lakh units kept ready for the opening weekend in India, not more than 50% were sold, thanks to low interest of Customers for various reasons, from new innovations to pricing. This is a first for Apple, what with already sagging Sales and the same trend could continue if they keep making iPhones which people stop buying for snob-value. And a younger brand like Mi which boasts of giving a run for money with its devices could do better with Merchandise Planning some Staff training. hope that’s not asking for too much from a Brand which has apparently carved a niche for itself.  

23 October, 2014

EMIs to the rescue of Retailers

I have been receiving emailers from Bajaj Finance, one of the largest consumer finance companies in the country for a long time now, ever since I bought a couple of stuff using their services 5 years back. I still haven't unsubscribed to their mails, hoping that I get to gain a lot of insights into Consumer Behavior day in and day out. The one that I received today was a bit surprising... Even as I just finished my daily quota of early morning news releases, Bajaj Finance sends me an email that the newly launched iPhone6 can be bought using their services through EMIs, while Apple had announced earlier in the day that they have advised Retailers to discontinue the EMI Schemes specifically for the newly launched models due to overwhelming response and low stock quantity. Wonder where the communication channels failed between Apple, the Retailer and the Financing Company, clearly that there was an overlap of information to consumers which is misleading. Leading Retail chains such as Univercell, The Mobile store, EZone and a whole lot of smaller local resellers have been offering EMIs on the newly launched iPhone6 and 6 Plus.



Apple has been struggling in India, not because of a slowing market. Its quite the opposite. More and more people are embracing the Apple Ecosystem and this trend is clearly visible every time there is a new launch. For a country of over 1.2 billion with 300 million youth population, assuming a 0.1% population that would aspire to buy a new iPhone, Apple Inc has dispatched just 55,000 units of the newly launched model. This is quite amusing. Apple Sales have been scaling higher and higher in India over the last 2-3 years, yet the US Headquarters hasn't been giving the subsidiary and the market its due. In fact, it was the news recently that Apple India had to almost fight with HQ to advance the sales of the newly launched models ahead of Diwali to cash in on Festive sales. That the Sales would have been the same otherwise too, is another matter.

So why has Apple advised Retailers not to offer EMIs on the newly launched models? According to trade partners, the reason is three fold. To begin with, the company wants to create an atmosphere of desirability - EMI is the easiest way for youngsters to posess the product and Apple wants to keep it away from this lot of consumers. By not offering the EMI, only those who can really afford would end up buying the new models and it would command a premium in the market for a much longer time. Second, Apple and the Retailer would have to bear the interest costs partially since the EMI would be offered interest free to the consumer and it wants to minimise this cost at the moment. Third, Apple wants to clear the past inventory in the market; Models such as the iPhone 4 and 4S which were released over 3-4 years ago are still available to buy in the market and since there is no bigger market opportunity than India, Apple perhaps wants to clear the last lot of models asap.

So, if you are looking for a great deal on an older model of iPhone, now is the time. Rush to your nearest Retailer and negotiate a good deal, which I am sure they would be happy to offer. After all, an Apple product has a wonderful ecosystem and the older models too have a great experience to offer.

19 October, 2014

The iPhone Saga continues...

When I posted on my Facebook page at 11.35pm on the night of 16 Oct. 2014 that I was the first in the city of Chennai to receive a 64 GB Gold variant of the iPhone 6, someone sarcastically quipped "So?!?" Well. It was no big deal. Really. Anyone could have been the first one if they had put in the effort. And for me, it was pure fun. And a Retailer's delight too - to see how a Retailer delights his customers through completing a much anticipated and well hyped "transaction". In many parts of the country, the event was quite publicized and draw discerning customers to the Retail Stores - one retailer in Chennai had gone a step ahead to rope in leading actress Hansika Motwani to do the honours. India's largest mobile store chain, The Mobile Store took a full page Ad in national newspapers urging people to preorder and get the device in the midnight. Flipkart, India's largest ECommerce company along with rivals Snapdeal and Amazon was taking preorders promising one-day delivery. Crazy Apple Fans lined up the outsides of the Retail Stores, from UB City in Bangalore to Select City Walk in New Delhi's posh Saket area. I, however chose to skip the queues and chose to book with a low-key Retailer close to my workplace. I really took a chance with this Retail Shop, it is called Hello World located at Adyar, in South Chennai. They charged me Rs. 5,000 as booking charges 5 days before the original launch and assured to deliver the phone by midnight.



 On the day of release, I called then twice during the day to check if everything was as per plan, and they continued to assure that they were geared up for the event and I could come over after 11.30 in the night to collect the "piece". Yeah, ultimately its a piece, but a precious one though! I finished work, went home, had shower and dinner and drove back to the shop and reached around 11.15pm. There were 2-3 other customers who had turned up at that time. I was actually taking a chance, just in case they offered to sell the piece well before the time the invitation suggested. And in true Indian style, they did. They "sold" the first piece to me well in advance of the promised time but cautioned me not to activate the phone until 00.00 hours, lest I lose warranty.

I came back to my car, clicked a Selfie and shared on social media and whatsapp groups - small thrills, you see. And was greeted and responded by many people whom I knew and didn't. I really felt happy that the Retailer stood its purpose and kept us its word by delivering what was promised.


I came home and waited patiently, only to activate my new iPhone6 at 00.05 hrs. Its a delight to restart or swicth on an iDevice. And I love that experience absolutely. The finesse with which a product has been created and packaged - Hats off to Steve Jobs for this. I have been using Apple products for a decade now, with my first one being an iPod Nano 4GB. In the year 2004, it was a miracle to store over 10,000 songs on a single portable device that can be heard through headphones, on a car through an AUX Jack as well as played on a music system. And Apple has gradually grown its line-up. at the moment, I guess they have over 30 SKUs, some in sales in a few countries while some have been discontinued from production as well.

There have been a number of reviews about iPhone6 itself, so I am not going to get into the technicalities. Your favourite news websites are a better source than mine. So, I would urge you to read what you think suits you best. I am only going to share how it feels as a user, as a keen observer of consumerism, as a retailer and as a Retail Consultant who advises various businesses.

The iPhone6 is a tad bigger than the previously launched iPhone5S. The beauty of the earlier iPhones and iPods was that they could be managed using one hand, depending on what suits you. Not anymore with the new model. While a few can hold the device comfortably in one hand, most people, including a few women may find it difficult to use it on one hand. However, the flipside is the screen size looks much bigger. You get to see and read a lot more, especially on sites like twitter and facebook as well was webpages. While the default font size remains the same (it can be increased through manual settings though), one gets a feeling of using a non-Apple device. Maybe like an HTC or Sony. Samsung has launched various sizes appealing to various strata of people, just like how another Korean Automobile company Hyundai does. So, it depends on which other smartphone you compare it with. But interestingly the new model is lighter than the previous one, so the size is compensated with the pressure exerted by the palm.


Speed is immensely better in the iPhone6, but you would realise this only while using certain apps. And the likes of Facebook and Twitter have updated their own apps in line with the iOS8 Operating system, so the apps now open up and perform much better than in previous devices. Battery drains slower than before, although I haven't put the device to too much of use such as having a Facetime Call or watching a movie. Features like Near Field Communication (NFC) and ApplePay wouldn't be usable in India, for we dont have the relevant infrastructure here. Other than some basic cosmetic changes, there is nothing new in the device, although hardcore Apple Fans will tell you about the technicalities which I dont think will change the way we live! However, to each his own. 

At the moment, its been just about 36 hours since I have been using the phone and it seems to be working well and doing its job to its best. And my love for Apple keeps increasing by the day. As the saga continues...

07 September, 2014

Sync-ing customers with Technology

Smartphones have come a long way in India over the years. Until about ten years ago, the most popular phones for business purposes were BlackBerry followed by Nokia Feature Phones for personal uses. Others like Samsung, LG, Motorola, etc. had very limited models and therefore very less sales (penetration) as well. Things started changing with the launch of the Apple iPhone in 2007. The iPhone revolutionised the way people used mobile phones with its remarkable technology, style and utilities. As is quite famous about Apple Founder Steve Jobs, the company doesn't conduct much of surveys about user's needs - it rather provides features that users never thought they would need one - the most recent being the finger print scanner for unlocking the iPhone 5S which was the most recent launch in 2013. Samsung Electronics, which is one of the leading Electronics companies in the world has surged past others in less than half a decade to dominate the world's number one position in Smart Phones across the world as well as in India. According to a recent report on NDTV Profit, Sales of Smartphones rose by 84 per cent in the quarter ending June 2014. Local and Foreign companies alike are sacrificing profit margins to build market share in India, which counts 914 million mobile users, according to Government of India data.
Technology Consultancy IDC India projects annual smartphone sales growth of around 40 per cent for the next five years in this price-sensitive nation.


This is a delightful news for Retailers selling mobile phones and accessories. Univercell, Chennai based Retailer of technology products including smart phones, feature phones and related gadgets has grown consistently over the years and is rated No. 1 in terms of their network, Strategic Locations, Innovative Marketing, Friendly service and most importantly, a wide array of products across various brands. The Retailer, recently launched its newest format, rightfully called "Univercell Sync" at the tony Nungambakkam neighbourhood in Central Chennai. The store, spread over about 800 sft is strategically located to enthuse passersby to drop over. While the brand is quite popular in the city, the new "Sync" suffix is sure to attract a lot of people to get inquisitive and enquire the details about the new initiative.

The store layout is interestingly divided as various zones for purposes such as Photography, Music, Work, Accessories and Kids. Gadgets are displayed utility-wise rather than Brand-wise, which is a great way to encourage customers to choose the right gadget according to their uses. Global giants such as Apple, Samsung and LG share the display space with home grown Micromax and Karbon. However, the phones are still displayed price wise within the display areas so buyers can choose within the price range they require.


I was pretty impressed with the Music zone, especially. If CDs killed Music Cassettes fifteen years ago, the iPod killed the CD players a decade ago. Today, most of music is stored and played digitally and handphones have most of them, since people prefer to have a single gadget for making calls, taking photos and for listening to music. The display also includes music gadgets such as speakers, bluetooth devices to stream music, ear phones, head phones and cables to connect. With the touch of a button, its quite easy to connect one's phone to many of the devices and have a live display, which would aid buying the right product quite easily.

I was also quite intrigued with the kid's zone - a special area for interaction with the young ones - kids can hang around and explore various interesting things about the gadgets and the friendly staff are also helpful to teach them a thing or two.


Overall, the store is a notch above the hundreds of retail stores across the city that also "sell" mobile phones. The Univercell Sync stores dont just sell, they rather provide a very unique experience that the next-gen is looking for. Do drop over at the store in the coming days and enjoy a world class experience and share your thoughts.

The store is located at:
New No. 103, Old No. 52,
Nungambakkam High Road,
Chennai.
Landmark: diagonally opp Basics Store.

12 June, 2014

Online Grocery Shopping

Big Basket

There has been enough spoken and written about the Flipkart-Myntra deal. Online Commerce is no more a hype at the moment and there is no money to be made – that’s the response most subject matter experts are saying although they don’t want to be quoted since they are in various advisory capacities for many such companies. With a healthy two-digit margin, if offline Retailers are not able to succeed (read: profitable), then how would these companies survive- they ask. Having said that, there is not a single ECommerce company (in India) that has tasted profits yet. While many promoters have made millions of dollars collectively, the companies in question still remain unprofitable. I would presume that a very few of them would even be making unit level margins. Such is the discount structure and focus on Topline that these companies are almost forgetting that the main intention of a business is to create value through profitability and not just a valuation (to subsequent investors). Amongst the online frenzy across categories, the most dreaded and the most challenging category is grocery & daily needs including fruits and vegetables. Bangalore based BigBasket.com already has some headway while WeStaple.com from Noida and a few others who are regional players are taking the lead to establish their positions. Big Basket even has a Mobile app for Android and iOS from Apple. Take a look below at what their customers have to say;

https://www.facebook.com/Bigbasketcom 

http://venkysundaram.wordpress.com/2013/05/29/why-i-stopped-using-bigbasket-com/

https://www.facebook.com/WEstaple

Ganesh Bigbasket

K Ganesh and his wife Meena Ganesh are an entrepreneur and angel investor-duo. BigBasket, which is run on a daily basis by the founders of e-tailer Fabmart, on the other hand, is one of India’s only online grocery stores. Online grocery stores have been seeing big traction around the world, as recurring orders prop up the profitability of the niche e-commerce category. “The Series B funding for BigBasket, which should close in the next three-to-four months, will be around $40- $50 million. We believe it has huge potential, with gross margins of nearly 20 per cent. Every order is profitable for us on BigBasket,” Mr. Ganesh told The Hindu.

Bigbasket founder Hari Menon, a successful entrepreneur who sold his brick-and-mortar retail chain Fabmall and Trinetra to Aditya Birla Group, is bullish. “It’s a huge, underserved market. Convenience is a major factor in our metros. We are finding that at least 85% of our customers return after the second order.” Menon said that revenue is increasing 20% each month. Bigbasket delivers 4,000 orders daily. In Mumbai, where the average size of an order is Rs1800, it does 800 deliveries each day. The site has served 200,000 customers so far and is expanding to Delhi and its suburbs. Menon said the company did Rs85 crore ($14.3 million) in revenue in 2013-14 and was on course to do Rs200 crore ($33.7 million)  in sales this fiscal year.

While the category is exciting, most customers seem to expect the savings (on real estate) to be passed on to them, which in reality is not. If the Real Estate savings are about 10-12% on Sales, the promotions and marketing costs are much larger than that, especially the first-time acquisition cost of customers. While most players do not offer much of discounts for every item, there are chances of combined savings when you buy more quantities or multiple brands from the same company.

However, the overall sentiment seems to be simple- customers would buy products online only if they value their time more than the time spent in shopping offline at Retail Stores such as Spencers, Foodworld, Nilgiris, Big Bazaar, etc. India has a huge density of Kirana Stores while Organized Retailers in the big cities are already quite popular for more than a decade now. Fruits and Vegetables are still preferred to be bought from the vendors who sell fresh quality items, most of them directly sourced from the Markets. Retail FDI in multi-brand retailing is a contentious issue and even the new Modi-led Government is not actively pursuing this at the moment, for the benefit of the trader community who form a big chunk of vote bank.

Online Grocery, at the moment is restricted only to those who work in odd-times, say BPO Employees and many others who would find it difficult to shop at a nearby store especially those who live in far off suburbs. Having said that, the Kiranas are much more active these days, offering various facilities such as door delivery to credit facilities to their customers. While Online Grocery has a great future, time will be a real reckoner.

25 April, 2014

Happy Hours on the Web

The term “Happy Hours’ is better known for a “Buy One. Get One Drink Free” at most bars and restaurants all across the world. F&B Retailers have for long used this to lure customers to trickle in to their premises during the lean times, which is typically between 3pm – 8pm and Happy Hours are usually between 5pm – 8pm. While the margins on alcoholic beverages are quite high, say 200 – 500% on Sales, Restaurateurs forego some of it to get customers and utilize the time well and also hope that these customers would continue much after the Happy Hours are over. Also, consumption of food during the course of having a peg or a mug is quite high and hence they make money on it as well. I remember, a tony Restobar on Church Street in Bangalore offerred a group of 8 of us Happy HOurs even after 8pm, knowing fully well that the business that would arise out of our total consumption is well worth it.

What is new, is that e-commerce companies are now promoting their “Happy Hours” to lure shoppers to buy online during the so called “lean hours”. What is interesting is that the business on the web is busy only during a few hours in the day. As you would guess, it is during the day time, and between lunch and evening. The reasons for this kind of hectic activity is as follows;

Broadband Speed

Most (online) shoppers’ households still do not have the kind of internet speed that’s available at their respective offices. The Airtels and BSNLs of the world do not offer seamless connectivity that the IT Managers in small and large companies work relentlessly to ensure connectivity all the time for business purposes. And therefore consumers prefer to shop online during office hours. Incidentally, IRCTC sees hectic activity between 9am – 11am, especially for tatkal bookings.

Secure Access

Home internet is certainly not as safe and secure for making online transactions, and is vulnerable for hacking, especially by fraudsters who are constantly monitoring those who are shopping online. So, online shoppers tend to believe that office internet is much safer and is hack-proof, although it is indeed a misnomer

Delivery

Many youngsters live away from their families these days, mainly owing to work and do not have a permanent address. Some others do not have anyone to collect the goods being delivered, especially if they as COD – Cash on Delivery products. Hence it makes sense to get them delivered at their office making it more convenient.

Boredom

Over the past decade, the internet has been an important leveler to kill boredom. During the initial days, it was just about reading (Internet 1.0) where one could only transact one way. Then came the years when Google started invading our lives with various products, Youtube being a very important one. Social networking has seen hectic parleys over the years including Facebook, Twitter, Pinterest and so on. Online Shopping is a mere extension. People shop online, from grocery to gadgets, tickets to gifts, just to kill their boredom. Also, long office hours (during the week) and travel to hometown (over weekends) doesn’t allow many to shop at High Streets and Malls.

Desktop / Laptop

While mCommerce or shopping on the Apple or Android smartphones is becoming common, shoppers still prefer to see the products on a wider screen such as Desktops and Laptops as it gives them a better view of the products. Also, the reliability of 2G/3G connections is much lower than on wifi/broadband services.

AmazonIn

I read this recently on the web;

“If I want to find something, I will Google it. If I want to buy something, I will Amazon it.”

Very powerful statement.

Amazon India recently launched a campaign to encourage shoppers to shop online during the evening hours, promising them best deals in town. I guess more and more etailers would follow this trend shortly. "Working hour visits are the highest—there's a spike around lunch time and evening and dies out at night," said Sandeep Komaravelly, vicepresident, marketing, Snapdeal.com told in a recent interview to The Economic Times. "Besides, weekdays are busy for shopping online, while weekend traffic drops by 10-12 per cent, particularly on long weekends like this one." Hasbro Clothing, the parent company of basicslife.com runs 100 exclusive offline stores and also retails via 800 multibrand outlets. "Office net connectivity is much faster than at home, prompting quick purchases at work," said Sriram Ravi, head, digital marketing, Hasbro Clothing. "We get 20 per cent daily orders around lunch time and marked increase during office closing hours. People are done with the day's work and use the last hour to browse and buy from shopping sites, while on weekends, sales in retail outlets are higher." Average time spent in buying boxers or handbags or shoes online is five to 10 minutes and these are typically repeat buyers, familiar with a site and knowing what they want.Same-day delivery options are also pushing buyers to shop during office hours. For example, eBay India offers nine-hour delivery, but for this, orders have to be placed by noon. At Amazon, orders have to be placed by 10 am to qualify for sameday delivery according to The Economic Times.

Honestly, there is no good time to shop. Anytime is a good time, from the view point of Retailers. It’s just a matter of time that Offline Retailers would also start offerring discounts during lean hours, a practice started by United Colours of Benneton many years ago. For now, check out the web for special deals. If you reading this later in the evening, you may be in for a surprise! Happy Shopping…

08 February, 2014

Smartphones & Dumbphones

In the early 2000s, there was only one mobile phone brand that was popular in India. It was none other than Nokia. It was considered the “Maruti” of mobile phones, with one model priced at a gap of a Thousand odd Rupees. Customers could choose from an array of models starting from a few thousands to a lot of thousands! Mid-2005, came the BlackBerry. A BB was the ultimate corporate tool that every executive carried; or rather wished he could carry. Over time, the company reduced the entry level prices and it was accessible to small time traders, entrepreneurs, businessmen and their ilk. The Late Steve Jobs, former CEO of Apple Inc. unveiled the iPhone to the public on January 9, 2007, at the Macworld 2007 convention at the Moscone Center in San Francisco. The two initial models, a 4 GB model priced at US$ 499 and an 8 GB model at US$ 599, went on sale in the United States on June 29, 2007, at 6:00 pm local time, while hundreds of customers lined up outside the stores nationwide. The passionate reaction to the launch of the iPhone resulted in sections of the media dubbing it the 'Jesus phone'.The fit and finish and the premium pricing meant that it excluded the masses. It was seen as a toy for the rich and famous. Soon, Apple realized that they had to be a useful product for millions of people worldwide and hence subsequent models such as the 3G, 3GS, 4, 4S, 5 & 5S were released. The latest in the line is of course the hugely popular iPhone 5S which was launched on 20 Sep. 2013. It is also the most sold model for the company.

IMG_1019

Between the rise and fall of Nokia, Blackberry and Apple, several other brands have come (and a few have gone) with their range of smartphones. The commonality of the former three is that they used their own hardware and software whereas all other devices manufactured by brands run on the Android software which is developed and owned by Google. One of the reasons why Blackberry and Apple were appreciated by their customers was that their products were unique. While the most complained thing about the Android devices is no matter how the phone looks (or feels like), the interface is just the same of the Android. The world has most number of Android phones, but that’s probably due to cheaper price points of these phones as well.

Apple has been playing hide and seek in India for the past couple of years. While the market seems promising, its China that’s a bigger opportunity currently for the company. Despite so many efforts by its Senior Management to focus on India, the California HQ team has been reluctant to do so, for reasons best known to them. This has been clearly visible in the Sales and Marketing Strategy, Distribution network and Pricing. Clearly, India doesn’t seem to be among the favourites yet. However, last week, Apple announced that it would commence manufacturing of the now discontinued iPhone4 model to play catch up with the Android device manufactures such as Samsung, LG, Sony, Micromax and others to compete aggressively in the Indian Market.

IMG_1408

I was astonished to see a huge advertisement for this now obsolete model at Delhi Airport’s Terminal 1D recently. Why would a user want to buy an expensive smartphone, which is now obsolete in the developed markets, at a price point where there are several other options! As many say, Steve would have never allowed it to happen. If you have read his Auto-Bio like me, you would know what I am saying. The business team is trying to play catch up in a market which is flooded with cheaper, imported as well as locally manufactured phones.The iPhone4 which I owned two years back was an excellent phone, but was only relevant then. Some of the new features that the competing Android devices currently provide are no match for the older Operating system of apple that this model runs on. Will this bring pot loads of money to the company? Probably no. Will this bring a distribution strength to Apple in India? Yes. Retailers like Croma, EZone, Reliance, Univercell, etc. would be happy to stock these phones and offer them at prices sub-20,000 with buy-back schemes and EMIs on Credit Cards. This is a wait and watch game. Apple has to do a lot more to upgrade users from dumbphones to its range of smartphones. It would not happen any soon. It would not happen with any one model. The entire infrastructure has to be focused on the supply chain-pricing-marketing model. While most Apple users do not downgrade (their models) at any cost, its mostly the users of other platforms who move to Apple. Price alone would not be enough to convert them to buyers and loyalists. Apple needs to do a lot more.

02 October, 2013

No more EMIs for shopping

The Reserve Bank of India (RBI) has come very strongly against the ongoing practice of Retailers like Croma, The Mobile Store, Imagine, Univercell and many more in assosciation with product companies and Banks to offer interest free EMIs (Equated Monthly Instalments). Currently, Brands like Apple, Samsung and many others subsidise their products by passing on the margins to Banks in return for offerring interest free EMIs. Using a credit card, consumers can own their coveted piece of technology or household items by converting their purchases into convenient monthly payments instead of paying at one shot. Many people have bought their first iphone or other smartphones which offline and online retailers have been offering for quite a while. Believe me, it is indeed tempting. Instead of spending ₹45,000/- all together,  one could pay as low as ₹4,000 for 12 months without paying a penny as interest. Even though Consumers could have paid the full sum, they prefer to pay in instalments. The scheme has graduated many who were having feature phones and CRT Tvs to upgrade to a smartphone or an LCD/LED Tv respectively. 



So, where is the catch? Who bears the interest cost? 

Within the organized retail trade, debit/credit card penetration is quite low at about 15-35% at the max. Banks earn 1.25-2.50% commission on such transactions from Retailers. So, at a 12% interest rate on a transaction of ₹15,000, the bank could have earned ₹1,800 as interest. Instead, it gets only 2% on the transaction. The balance 10% is usually offset by the Brand which is promoting the scheme along with the Retailer. This is on top of the Retailer margin that the Brand pays the Retailer. Therefore, the real value of the product sold is much lower than what is perceived by the customer. The Brand usually doesn't disclose the discounted price of the product so as not to lose the value the customer would derive from the product. 

The scheme has been a massive hit especially among youngsters and first time income earners who are new into their jobs but would like to impress people around them with fine gadgets et al.

The Banks usually anticipate a credit roll over, which means the customer is unable to pay the EMI and therefore pays only the minimum due in a certain month and rolls over the EMI to the next month, on which the Bank earns 3% interest on the said amount. They make up the lost out interest here too. 



RBI is of the opinion that such schemes mislead customers about the impact of rolled over interests by Banks. The new Governor Mr. Raghuram Rajan probably also believes that these schemes promote unwarranted consumption thereby reducing monetary liquidity in the system. Among the slew of economic measures that have been taken since Sep. 13, this is a key one. Retailers are fuming. With the impending festivals eason coming in, Brands and Retailers expected a surge in sales. But this scheme has come as a dampener. Many middle class pople who aspired for their favourite consumer durable or furniture may have to put off their puchases or pay in full. 

NBFCs and private financiers have however been exempted. Bajaj Finserv which has an over 40% market share in Retail credit must be happy. But for availing the scheme provided by them, customers must furnish certain other details such as proof of income, proof of address, PAN Card, etc. So, there is still hope for Retailers and Customers. May the festival of lights bring hope to one and all and increase consumption. Consumption laeds to Growth. Retail prospers. 


25 June, 2013

Product Vs. Experience

A couple of days back, I was having a conversation with a colleague regarding Brand Experience versus Product specifications. He was of the view that a customer proposes to buy a certain brand or a product but the actual retail experience is utmost important to close the Sale. It got me thinking and the result of some intellectual head-scratching is this column. At the end of the day, it’s the product that the customer is ultimately going to use and may or may not remember the sales experience, especially for low-value items. In fact it may even qualify for certain high value purchases.

For example, Bose which manufactures some of the finest sound systems in the world  advertises heavily online these days (in India), about its products. They are usually banner ads and I find them all across – there is a certain way the online advertisers follow you (which I will cover in a subsequent blog later). But I wonder what kind of experience that Bose is driving while advertising its products online. For one, Bose is not bought. Bose is lived. In a sense that the experience of Bose is something that the consumer lives with during the lifetime of the product. Having said that, would a potential customer walk in to a Bose store after seeing the online ad? Probably yes. Bose banner ads direct the user to the Bose website. It is upto the customer thereafter to seek whatever information they need. And therefore, there is no closure of sale! Is Bose trying to popularise the brand or is it a sales technique? I guess it is the former.

Bose

On the other hand, Samsung advertises its most famous Galaxy range of smatphones online too. In this case also, the company is building the brand but the nodes (read Retail touchpoints) for buying the product are umpteen in number than in the case of Bose. For, a Samsung Galaxy is available at thousands of retailers across the country in comparison to a Bose.

While the online ad would build curiosity for a brand like Bose, it would convert more customers for Samsung. And these are just examples.

Read More: The Bose Experience

While at the Retail Store, when a customer intends to buy a mobile phone, irrespective of the store experience, the customer would choose from one of the four main Operating Systems – the Android, the BlackBerry, the Nokia OS and the Apple iOS. It probably wouldn’t matter whether the retail store is Croma or EZone or Reliance Digital or a regional Retailer such as Viveks or Girias or for that matter, small time shops that sell these types of phones. In this case, its just the product that matters and not really the experience. Ecommerce is playing an even more important spoiler for Offline Retailers in terms of snatching away customers. Is there a physical experience in online shopping? Not really. Indeed, there is a lot of science in designing a great website / webpages but that’s more technical. Playing with the layouts is a tried and tested way for online retailers to keep improving the shopping experience. But there is really no “customer experience” as such while shopping online.

There is no doubt that the customer would return to the Retail Store to buy a similar product the next time around if the experience at the store was extraordinary. Therefore it is indeed important for Retailers to ensure a consistent Consumer Experience at the outlets. At the end of the day, between product (availability) and experience, the customer would choose the product.

22 May, 2013

Inviting patrons for a great feast

The Hotel Industry in India is facing tough times ever since the global recession occurred a couple of years ago. In my current role at Royal Enfield as Head of Business Development, I travel atleast 2-3 days every week across the country. Whenever I try to book rooms in small and big cities, the room rates just surprises me. I was trying to look for rooms in Hyderabad for stay over the next few days and was surprised to find discounted rates at 5 star hotels for as low as Rs. 5000 (USD 90). The Leela and Grand Chola – both touted as 7 star rated properties in Chennai are offering over 40% discounts on printed rates, to as low as Rs. 7,000 (USD 130). Same is the case in Delhi, Gurgaon, Mumbai, Pune and is even worse in smaller towns. I stayed in Trichy, a city in central TamilNadu which connects a number of other towns of prominence in business and culture within a 100 km radius during the first week of May 2013. On the MakeMyTrip mobile app for the Apple iPhone, I could get a double room for three adults and two kids for as low as Rs. 2,500 (USD 55). The room was quite large to hold a King size bed and two single beds. I have stayed in cities like Coimbatore, Dehra Dun, Jammu, Patna and many others for similar rates in well maintained properties. The outlook for hospitality in India as such wears a glim look and with increasing inventory and competition, not to forget the choices that customers make, the pricing is aggressive at most of the properties. This is where ancillary income to Hotels are helping them.

Cappucino

Most of the hotels have in-house restaurants, mainly to cater to resident guests. Many of them advertise these restaurants quite heavily, thereby attracting visitors through the year irrespective of peak season or otherwise for room occupancy. While this practice has been there for long, its quite evident these days with a number of hotels including some premium Hotel chains advertising in the media. What caught my attention recently  was an ad (displayed above), by ITC Hotels, one of India’s largest companies in the hospitality space for their Cappuccino Restaurant at the erstwhile Park Sheraton (in Chennai) . They have advertised buffet options with prices! Do those patrons who visit these places really care for the price? I mean – everyone does. But then, do people care what the final bill is gonna be when they visit star rated hotels and restaurants? I really doubt. Restaurant incomes are an important source of revenue for Hotels. They contribute anywhere between 7-25% of total sales depending on how well these restaurants are positioned and popularised. Some of the restaurants in these hotels are even Michelin-rated – a rating by the Vehicle Tyres powerhouse Michelin which grades eating joints across the world and shares in a report that is published annually.

Suggested Reading: Franchising

Stand-alone restaurants are doing their best too, to woo potential customers. They advertise in leading newspapers regularly to attract attention and over a period of time become destinations. In some cases, they are located within hotels and Malls and in many cases they are located on High Streets. User reviews in sites and apps such as Trip Advisor, Zomato, Burrp! etc. help them gain more traction. Chains like McDonalds, Pizza Hut, Subway and Café Coffee Day advertise across the media regularly to pull customers to their outlets and many of them even offer complimentary WiFi as a hook to retain them.

Suggested Reading: Does Free Wifi help?

With inflation leading to peak rates of food items, it is becoming impossible to middle class families to venture out eating outside. But the upper-middle class seems to be slightly more insulated, fuelling the needs of these restaurants. While premium hotels and restaurants promise great food (quality) and a wonderful ambience, consistency is key. To retain existing customers and to attract newer ones. If you are planning a visit to a nearby restaurant this weekend, flip through the pages of newspapers or mobile apps and you may be in for a surprise at a hotel nearby you! Happy Dining…

Suggested Reading: Food Inflation

26 March, 2013

Alternate ECommerce–Auction Sites

There was a cover story about Alibaba.com, China’s largest ECommerce company in recent issue of The Economist. Quite a few facts. That it is turning out to be one of the largest ecommerce companies in the world, with sales of over $170 billion, which is Amazon and eBay put together. That it has a financing division, viz., AliFinance which provides micro credit to small firms and consumers; and that it has 6 million vendors registered on its site. What was started in 1999 by the firm’s founder, Mr. Jack Ma, an English Teacher as a B-2-B portal connecting small Chinese manufacturers to overseas buyers has now transformed into an internet behemoth. “EBay may be a shark in the ocean,” Mr Ma once said, “but I am a crocodile in the Yangzi river. If we fight in the ocean, we lose; but if we fight in the river, we win.”Taobao, a consumer-to-consumer portal not unlike eBay, features nearly a billion products and is one of the 20 most-visited websites globally. Tmall, a newish business-to-consumer portal that is a bit like Amazon, helps global brands such as Disney and Levi’s reach China’s middle classes.

Indiaplaza, which was also founded in 1999 back home in India is unfortunately facing its toughest time yet. With over 80% of its 150+ workforce having quit over the past six months, the company which pioneered ecommerce in India has no takers today. With a weak b-2-c model based on product listing by various partners, the company has just not been able to scale up over the last few years, thus allowing late entrants like flipkart, myntra, jabong and coupon sites like snapdeal and groupon to surge ahead. To be fair to Indiaplaza, most of the Ecommerce sites in India are on deathbed, awaiting Angels to come and save them. The top three players, Flipkart, Jabong & Myntra with sales of over USD 600 million collectively are only making losses and there no signs of any profitability in the immediate future. Offline Retailers have had a slow start without much success in this arena. Croma, part of the Tata Group’s Trent Ltd., Crossword, India’s largest book store chain along with Landmark and Shoppers Stop,  India’s largest Department Store chain are the only few large Retailers who have attempted an Ecommerce entry over the past years. With FDI in Retail not included for Ecommerce businesses, the Government’s backing has been minimal in this regard.

AA025042

Even as I was thinking so, I came across an article which mentioned about an auction site named QuiBids (spelt as KweeBids). More out of curiosity, I set-up an account to know how this works. Registration was simple.GBP 0.40 is the value of each bid (for the UK Site) and can be bought online at the store in bundles that the user can choose, which in turn can be used while placing bids or while buying an item on the site after discounts and offers. The joining fee will be refunded in full or part thereof if bids are not placed for the said value. They have listed hundreds of items and all of them are on auction. The products are genuine and the processes are audited by Grant Thornton, one of the top audit companies in the world (I have personally seen the audit assurance report which is published on their website). One can bid an item only 5 minutes before the bid time comes to an end. Which means, users keep track of all those items on bid and are probably hooked on to the site all through, if they want to participate in the bidding process. Each time a bidder places a bid, the time slot for the auction increases by 20, 15 and 10 seconds in that order. If the number of bids the user holds is over, then he/she cannot participate in the bid anymore but the value in their account can be used against purchases. Also, the value of the product is discounted to the extent the bids are placed by users. Which means, if a product is priced at, say GBP 100, and the auction ends at GBP 32, with a discount of GBP 9, then the user can buy the product for GBP 91 (less the value that is already in the account). Shipping is charged depending on the size and weight of the product. All in all, it is a win-win for the company and the user. The company makes a thin margin on sale of such products while the loss on bid money is usually written off against a publicity fee paid by the brand to feature their products. And on top of it, users also buy the product which is at a discount for them but which fetches a margin for the company. In addition to this, users may also buy “bids” for set values, so as to keep on bidding. At the end of the day, a user will only gain from the tremendous discount that he gets out of the product even after buying bids.

The prose above may not be fully convincing, so do log on to www.quibids.com to explore.

Auctioneer

According to their website,

“QuiBids was started in July 2009 as an attempt to improve the Internet auction model by making it more exciting, safer, and more reliable. We're based out of Oklahoma City, Oklahoma and our goal as a business is simple: To provide an exciting online auction model with better deals for the consumer than any other website in existence."

You can win all sorts of popular products at incredibly low prices. Look at our homepage to see what products are up for auction right now, and if one catches your eye, buy some bids for a low price! When you place a bid, we add a maximum of 10-20 seconds to the timer - to give someone else the chance to bid if they're interested. This is similar to the "Going Once...Twice...SOLD" approach of auctions.

If no one else bids and the timer reaches zero, you’ve won a sweet deal on QuiBids! If you don't win the auction, you never have to go away empty handed. Any time after you've placed your first bid in an auction, you can choose to buy the product for a discount using the Buy Now feature. This will help limit your losses so you don’t have to leave all your bids on the table. You’ll never have to pay more than the Value Price for any products on QuiBids.

I have never come across such an exciting business model which I can comfortably say is an alternate Ecommerce model. There is hardly any publicity that I see for this company or for this form of Ecommerce and yet there are hundreds of dedicated users who are constantly bidding to win their favorite products at rock bottom prices. I guess the typical profile of the customer would be in their 20s and this is almost like a contest for them! Internet penetration is quite important for the success of this model and I presume the success of this model in western countries, which is not so the case in India where most of the internet consumption still happens at workplace with curious onlookers peeping into each others’ desktops and laptops. With Wifi (at home) using the iPad and other tablets and 3G on mobiles such as the iPhones by Apple and Blackberry gaining popularity coupled with the deeper penetration of Android smartphones starting at $ 100 (Rs. 5,500), chances are more young ones in India will appreciate and participate in such promotions in times to come.

Indian Ecommerce players need to reinvent themselves to stay ahead in the game. Afterall, everyone remembers who is the biggest of ‘em all, and not really the one who started. Such is life.

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