The dynamics of online retailing will change in the next few years
What is the latest trend in online retailing in India?
Online retailing in India is growing at a rapid pace. According to industry estimates, the current market size for pure-play internet retail is about $100 million, which is expected to grow to $1 billion by 2015. One of the major drivers for this growth will be the strengthening of the Indian economy, leading to a higher disposable income in the hands of people who will then be more open to shopping on the internet. The other important factor will be stricter regulations on online transactions by the government, reducing frauds and resulting in trust building for the medium.
Which category of products is attracting the maximum buyers?
In the current scenario, a strong 20 per cent of the revenues come from the sales of mobile phones and accessories, closely followed by computers and IT at about 15 per cent. I believe the industry dynamics will change dramatically in the next three years as more e-commerce players with vertical focus enter the market.
Do you see the direction of demand changing with any new categories picking up?
There definitely will be a demand shift which can be mostly attributed to this huge surge of vertical-focused players entering the Indian market and spending big money on advertising. According to our estimates, the largest shift will be seen in the fashion and apparel category which will increase from its current share of 11 per cent to 25 per cent by 2015, dislodging mobiles and accessories as the largest selling online retail category.
How do you see the cross-border online buying trend, that is, Indians buying from foreign websites? And what are the kind of things Indians are buying from foreign websites?
The trend of buying from international sites is too small to be looked at at this stage. However, if we do look at the numbers, books clearly is still one of those categories which customers are buying from international sites.
Since you are allowing heavy discounts on your website on varied products, how does the math work? How do you manage to sustain with such heavy discounts?
The way competition is shaping up in the online retail space, the player offering highest discount to the end customers will win it all. Discounts are a function of your buying efficiency. We at Tradus have made huge investments in acquiring the talent, which helps us outshine our competition when it comes to signing deals with brands and vendors to get best rates in the market. Thanks to our relationships with the brands and buying efficiency, every product on our website is sold on positive margins after deducting shipping and payment gateway charges.
How have social networks contributed to your sales?
Social networks have had a huge impact in India and across the world. According to recent reports, there are about 26 million users on the social networking site spending three to four hours daily looking at their friends’ walls, pictures, playing games and updating their statuses. This number is huge enough for any brand, be it online retail or otherwise, to focus its marketing campaigns on social networks. We are leveraging Facebook, using its targeting capabilities to reach our audiences, and have seen good results.