Gurgaon Skyline

Gurgaon Skyline
Gurgaon Skyline

29 October 2016

Inside India – Just a normal day in India


Yesterday, on my way to work, the following happened. While I was waiting for the elevator to come, the queue was getting built. Being in India, the queue is not really a line, but more a apple-shaped accumulation of people, that becomes a drain, once the elevator discloses which ‘gate’ it will open next. One of the commuters surprisingly pressed the [down] button from the ground floor, but maybe he had some business in the underground car park (yes we do have some rare buildings with underground car park, such as my office). On arrival of the up going elevator I am surprised to see this gentleman as the first one inside the cabin, so I inform him that this elevator will go up, on which he happily nods. So I ask him, why he would press [down] when he wants to go up and he says, because the elevator comes ..! I was speechless for a few seconds but having office and apartment on higher levels, I do have a genuine interest for the elevator not to stop on each level for people who want to go the opposite direction. So I decided to explain my point with elevator logic, why he should better press the correct direction than the opposite one. The gentlemen convincingly replies; Sir, believe me, I have tried it, it works many times. I could not stop my brain to catch the quote by Mark Twain “Never argue with stupid people, they will drag you down to their level and then beat you with experience.”

BUT in this moment I decided to write another article, to share my experience in Just a normal day in India.

Later the same day I read the research article “Thought Leadership: Retail & Consumer in India: Know the Hurdles”, which I would highly recommend for none Indian residence or newcomers, as it explains on a few condensed pages the challenges of doing business in India. Not surprisingly the white paper comes to the conclusion that the areas of focus should be Governance, Infrastructure, People, Culture & the Ecosystem and Disruption, Strategy & Adaptation. In the first chapter I come to know that complicated Taxation, Bureaucracy and Corruption build the hurdles to do business. Okaying this stand, I complete my read to come to the conclusion, it all boils down to the man in the elevator, pressing the [down] button when wanting to go up.

With other words, don’t try to understand (or even fight) why the challenges are stubbornly staying over the years and decades in India, but try to find efficient ways to deal with them.

Following the debate of the recent exit of Cyrus Mistry from his post as chairman of Tata Sons, removed by nobody else than Mr Ratan Tata himself (following the procedure of a listed company) I clearly see that we are all in the same ‘boat’ and the smartest brains of the country do often not agree with each other on how to approach the hurdles.

But one thing remains intact, despite of all difficulties to do business in India, the opportunities appear bigger than ever. India seems to be at the beginning of tipping point. What was called “The Industrial Revolution” in other countries in past times, is forming the pioneer instinct amongst the entrepreneurs, corporates and the entire society. This elevator is surely going up, even if some are pressing [down] on the same journey.

It’s good to be a part of that, but never knowing where this is going to take me!

India is buzzing! India is Incredible! Incredible India!

13 February 2016

Inside India – Ecommerce in a 3rd World Country!


Being fully aware of the disputable term “3rd World”, Wikipedia is confirming the same for India, but the business world might call it emerging Market and the locals would rather refer as THE biggest democracy in the world. But this is not the topic of today. Today I would like to throw some light on how I perceive the booming ecommerce market in India.

In the Social Media world, India has already emerged as a leader and counts the second largest user group on Facebook, only behind the USA. On Twitter, Instagram, Pinterest, LinkedIn etc. the situation does not look much different. A true case of leapfrogging demonstrates also the maximum use on mobile devices, rather than computer.
 
In the hierarchy of Tech Companies, the leading India ecommerce company Flipkart figures at the top of the pyramid with a valuation of $ 15 billion, in good company only smaller to Facebook, Uber, WhatsApp and equal to companies like Pinterest or Snap Chat. Last year the first platform went pure mobile and shut down its internet ordering presence www.myntra.com after researching that 80% is ordered on their mobile application.

The main strategy of all ecommerce players in India seems to be identical, to grow active customer base, which in turn will increase their valuation! So far so good, investors, venture capitalist and private equity is flocking as there was no tomorrow. Articles appear daily to report foreign investments, only in multiple of $ 100 million per investment round. The majority of these funds are used to discount products and attract more customers to increase customer base and therefore the valuation of the company.

At the same time investments into a sustainable business model seems to be entirely absent. The platforms / applications are below par from a user experience perspective. Product searches often land in a jungle of similar products offered by multiple vendors and delivery preferences are not welcome. Given the consumer friendly option of cash on delivery is adding fuel to the return rate. Here an example: A Rs 200/- ($ 3) pair of socks will be delivered overnight on cash on delivery. If the customer is not at home (or doesn’t carry cash), second delivery will be attempted. If the customer does not like the socks, they will be returned immediately without payment. This is a very expensive approach and the cost of the transaction is for sure higher than the product value. Given the big number of such players fighting for customer base, the customers are not loyal and only go for the kill. Often the products are of substandard quality, maybe used or defective and Social Media is reporting many cases of counterfeit or hiked prices to allow bigger discounts (which would be illegal in India).

I do remember very well the dot-com bubble from 1997 – 2000 in the western world, where investors would not ask any question and beg entrepreneurs to take their money as investments for internet based business models. The bubble burst during 1999 and 2001. My memory is well intact because I graduated from my Executive-MBA in New Media & Communication, which was later re-named Media & Communication.

Keeping the entrepreneurs in mind, their model has already worked as they became rich overnight. Keeping the investors in mind, their model will work, as long as they exit before the burst. He that comes last makes all fast.

Unfortunately offline retailers seem not able to fill the gap of quality and service oriented shopping and therefore retail experience remains an issue rather than a pleasure in India.