Indian e-commerce needs quantum bets
You define a bellwether company by its boldest bets. When Myntra went all out on mobile, you knew they were an industry pioneer, experimenting and testing new waters. Their decision to bet heavily on mobile meant that the company knew something that others didn’t. And that ‘something’ was the role of consumer data in a fragmented e-commerce ecosystem.
Myntra was creating a wave in the e-commerce fashion space. They were radically changing our behaviour, and for me, only bellwether companies dare to make these quantum bets. And these bets are much needed in India’s nascent e-commerce space.
As Myntra also knew, data is the pathway to sales. More data means more information on tastes, preferences and behavioural traits. Make no mistake, more data does not ipso facto mean bigger conversions. Deriving meaning from this data is what helps companies unlock patterns and understand its consumers better. And for many e-commerce companies, translating this data into insights, is what is required to scale revenue and succeed.
But how does one get insights when you are struggling to access users and user-data? Users today are fragmented across the ever burgeoning app ecosystem. According to data from Forrester Research only 5% of a user’s time is spent on shopping apps and about 60% of users open a shopping app less than once a month. Most users turn off push notifications since they’re not used judiciously. How does a retailer, then, reach out to users and win them back? It’s a foregone conclusion that mobile is a dominant player in discovering products and converting sales. But nudging users to come back to the app and buy a product is an exciting space to be in.
Let me posit this thought process from a pure Customer Relationship Management (CRM) play. The biggest challenge facing many mobile-first companies today is the lack of infrastructure that allows for effective CRM on mobile. There are many challenges to implementing mobile CRM, including that mobile information is often siloed, the ecosystem is complex and the scale may not be there yet for some companies to warrant the investment.
To add to these challenges, from a regulatory point of view in India, FDI (foreign direct investment) rules dictate that marketplaces can’t fund discounts and no one seller should contribute more than 25% of sales. With these nuances, discovery of products continue to be a top challenge for sellers and brands on marketplaces. Sellers now want more credibility for their offerings on marketplaces and seek to carve out a brand loyalty.
With more such demands, partnerships with third-party networks are becoming a critical component for marketplaces to scale high margin revenues. It’s the perfect marriage of demand and the technology required to scale insightful data. The end result is to build an idea of a single consumer’s preferences, tastes and habits, insights which can then be used judiciously to drive revenues.
The only solution to open a line of conversation with a customer is to glean through mountains of data and reach out to the user outside of a typical e-commerce app. Companies like Facebook and Google might have the chunk of the time on mobile. But the other players are well positioned to tap into insightful data to enable their users discover products they never knew existed, and buy them. Mobile advertising is still at its nascent stages in India. We have less than 10% of our sales from India. But this is a market for the long haul. India is a strategic market because of the growth and opportunities it commands. Our clients are getting savvier—asking questions on how to entice a user and capture his/her attention at the right time. More want to use location and geo-fencing techniques to advertise to a user who has a high propensity to make a purchase.
I’ve always been drawn to this idea of building conversations on mobile, helping users discover products they like and eliciting feedback to improve the ads we all see. I’m reminded of this quote by Erma Louise Bombeck, “The odds of going to the store for a loaf of bread and coming out with only a loaf of bread are three billion to one.” It captures the essence of shopping—being able to see a host of products that you never knew existed and wanted to know more of.
Replicating this feeling, this experience, on mobile, is the big challenge. But imagine how much better it would be if me, as a Pink Floyd fan, were shown an ad for a ‘Wish you were here’ T-shirt, Size L, 20% discount and in my favourite red colour? The dream goes on…
The author is co-founder and Chief Revenue Officer, InMobi