Cruising ahead on the e-way

TRENDS 2006-2007

E-COMMERCE: Online marketing will touch a new high; search marketing, online advertising will give a tough run to traditional media.

In 2006, eBay "" a premium online e-commerce site, announced that its 2 millionth passenger vehicle (a blue 2005 Jeep, Liberty) had been sold in the US.

The thought of going online and buying a car (we sell a car online every eight hours!), an apartment, washing machine, television set or even a home theatre system is a not-so-common event in India, but nevertheless it's happening for the 38.5 million Indians shopping online.

This audience size is expected to swell up to 100 million users by 2007-08, which is by all means a merry piece of news for online retailers.

Security, by far, remains the top concern for most players. With approximately 5 million Internet users (out of the 38.5 million) banking online, it clearly reflects the users' apprehension.

Internet And Mobile Association of India (IAMAI) expects the number to reach beyond 16 million by 2007-08 (which includes both Internet and mobile banking), but that can be grown in multiples of the targeted number if online frauds are restricted and people are made aware of the probable online financial hazards and means to combat the same.

Online travel agents have breezed through the year with astonishing numbers of online bookings. For instance, makemytrip.com claims to have booked 3,000 tickets in a day.

Books, accessories, tickets, apparel and electronic gadgets retain the slot for being the most popular online purchases, a trend that seems to extend into 2007.

Murugavel Janakiraman, founder CEO of BharatMatrimony Group at an e-commerce summit revealed that verticals like real estate, travel, automobiles, education and online bookstores would help amplify online businesses.

The stumbling block could be a minuscule size of the credit card population "" around 0.03 per cent "" as Indians still prefer offline payment modes like cheques or cash on delivery, he declared. Cybercafes, Murugavel states, could emerge as the collection points for e-commerce transactions, increasing the viability of cybercafes.

In 2007, expect Google "" possibly the best advertising vehicle until now "" to face pushback from competitors like Yahoo, Microsoft and even the traditional media. Search-find-obtain will be the new metaphor for the industry. Travel sites routinely buy and deploy over 3 million keywords on search marketing campaigns. The longer the search phrase, the better the result.

For instance, someone looking for "sea view hotel room in Mumbai" is making a more precise and less expensive request than just asking for a "hotel room". An IAMAI report suggests companies now directly reach out to candidates by using search engine techniques.

Multinational technology companies tend to be big ad buyers on the web because their consumers do online research before deciding on the purchase. Today's marketers would pay anything to be found online when the customer is searching for them, instead of them reaching out for the customer.

As per IAMAI forecasts, e-commerce transactions will cross the Rs 2,000 crore mark (in 2006-07) marking an increase of over 300 per cent from financial year 2004-05.

Thanks to the optimistic outlook by the players in this vertical, we can safely conclude that trends like search marketing, online advertising, email advertising (not SPAM!), along with broadband penetration fuelling e-video services, 30-second online adverts giving a tough run to traditional media could be the milestones of 2007.