Keeping competition at bay

Written by Diksha Dutta | Diksha Dutta | Updated: Aug 27 2012, 07:15am hrs
Think of online shopping, and eBay would be one of the top names that pops up. The worlds renowned online marketplace came to India in 2005 after acquiring Bazee.com. This was a time when there were hardly any e-commerce players in the country and the potential of this space was still to be realised. Though the categories eBay offers now in India have not increased substantially since then, Abhimanyu Lal, head, category management at eBay feels that the depth of these categories in terms of various products has definitely increased. More importantly, the e-commerce company knows from where the growth is coming in the country and where the future potential lies non metros, mobile commerce and sale of gadgets.

Says Lal, India is a very dynamic market in gadgets and consumer electronics. The major trend that we are seeing is uptake in the sale of mobile phone category. Since everybody is moving towards smartphones globally, even India is catching up. Phone is no longer a luxury in India, it is an absolutely essential category. It is an individual device and these days every house has two to three phones. On an average day on eBay India, a mobile handset sells every three minutes. This is higher as compared to a laptop that sells every nine minutes, a digital camera that sells every 19 minutes and a TV sells every 54 minutes.

Even for players like Flipkart and Snapdeal, gadgets and consumer electronics is a sweet spot. Kashyap Vadapalli, chief marketing officer, eBay India, says, Gadgets have always been very popular on eBay India. With our extensive range of gadgets across brands, models and budgets which enable our consumers to get easy access to the best deals and widest selection online, we see a great demand coming from consumers across metros, tier II and tier III cities. Interestingly, non metro consumers are actually shopping for more gadgets than metro consumers.

In the April-June quarter of this year, eBay saw phenomenal growth from non metros, reason being easy accessibility of products to consumers, through online shopping. During the same quarter, non-metros such as Thiruvananthapuram, Coimbatore, Kochi, Ghaziabad, Surat, Vadodara, Faridabad and Madurai were amongst the top 20 gadget cities. As much as 52% of transactions came from non-metros, which includes all cities except the top eight metros.

Lal feels that mobile commerce will uptake in a big way in India. Mobile phones have 700 million users and Internet has only 100 million users in india. So you can imagine the potential in mobile e-commerce. For the same, we have come up with various apps which makes mobile shopping easier, he says.

Competition from India

Asked whether eBay finds the Indian e-commerce market too cluttered with a plethora of ecommerce players in the country Lal has an optimistic view, I believe that competition is a great thing. It is helping in building an e-commerce ecosystem in India and is creating awareness among consumers to buy online. Other players are helping in expanding the message of e-commerce. The top five competitors for eBay are Flipkart, Snapdeal, Myntra, Yebhi and Fashion & You.

Globally, eBay was founded in 1995 and definitely has a better experience of functioning in different geographies as compared to other newer players. Lal believes that there is no better time to enter the e-commerce market in India, and that is what start-ups should do. But he confesses, The market readiness is definitely there for start ups and new companies, but I am not sure about the perspective of VC funding for the future.

eBay does not hold inventory and that is the business model which has worked for the company globally. After all even in India it offers 6 million items in 2000 categories. Thus, a marketplace model (no inventory hold) helps in saving cost and earning better margins. The benefits of not holding inventory are that one can sell anything from anywhere, says Lal. He also feels that this can be a good cost saving method for start ups.

Broadly, there are already 15-20 million people who buy products online, amongst the 100 million internet users. So whether is it an established brand like eBay or a start upthere is scope for all!