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Railways is successful in selling
tickets online because it’s a monopoly and competing against
its own offline counters // India Digital Summit 2007

When: 1/20/2007
3:16:05 PM
By Rajesh Barnwal

The
second session, which discussed how to leverage internet
to E-nable businesses, was moderated by Sanjeev
Bikhchandani, founder and CEO, Info Edge. The other
members of the panel were Mark Fox, chairman and CEO,
Novator; Sandeep Murthy, CEO, Cleartrip.com; Vivek
Nayak, chief operating officer, Avenues India; and
Virender K Ahluwalia, CEO, Fobaz.

Mark Fox said
offline retailers need to move into the online if they
want to maintain their market share. He said the line
between offline and online is blurring. The web has
become the dominant place where customers research for
offline purchases. And so if the retailers want to keep
up and compete not just in India but globally they will
have to integrate their offline businesses with the
online. Fox even suggested retailers to extend their
businesses into social networking sites and simplify
ordering from mobile phones.

Vivek Nayak said
there are 12 million retail enterprises, according to
2003 figures, in India, out of which only 4500 are
e-enabled. And out of these 4500 online business
enterprises, 85 per cent are pure play internet
merchants. To drive his point across, Nayak said even
well established offline enterprises such as Shoppers’
Stop, Samsung India and Louis Philippe don’t allow their
customers to purchase the goods online. On this Sanjeev
Bikhchandani responded by saying offline people are
smart, may be they don’t see enough customers online!
Unimpressed, Nayak said if you create value people would
come online.

Now the question remains what’s
holding back offline businesses from embracing the
online opportunities. According to Vivek Nayak, the
possible reasons could be low level of internet
penetration, non-availability of easy and secure
payment gateway, and technology challenges. He said
it’s often difficult for brick and mortar businesses to
understand and figure it out how to deploy the necessary
technology to create the online efficiency. Clearly the
need is for technology companies to become friends of
brick and mortar enterprises and create offline
solutions that seamlessly integrate with online
solutions.

[Update: In an email to
AlooTechie, Vivek Nayak has clarified, “I have never
said that 'non-availability of easy and secure payment
gateway' is one of the reasons eCommerce is not growing
in this country. That certainly is not true. India has
one of the best online payment mechanisms in the world
where an independent payment gateway service provider
like us have been empowered by the system to offer 6
credit card payment options and 13 net banking direct
debit options. These options are more than adequate for
current levels of eCommerce. As and when new payment
options come to life, we will be tying up with them too
- recent examples being Paymate and ItzCash Card - with
whom we have already tied up. On the safety issue, let
me say that in the five years plus that CCAvenue has
been in existence, I have yet to meet a customer who has
lost money because of making payments on an insecure
payment gateway. This has never happened. The encryption
standards are very high and almost impossible to crack.
99% of frauds one read about in the media originate from
unsafe offline transactions in restaurants and shady
outlets where the cardholder lets the card out of his
sight and leaves himself vulnerable to cheating.”
(Editor: I sincerely regret for my inadvertent lapse in
reporting the session deliberation)]

While
comparing the success of online travel, especially
online booking of railway tickets, with that of
e-retailing, Vivek Nayak suggested may be it’s because
delivering services is far more easier in online travel
than in retail. To put the issues in perspective,
Sanjeev Bikhchandani added Railways is successful in
selling its tickets online because it’s a monopoly and
also because it’s competing against its own offline
booking counters!

Vivek Nayak emphasized the need
for evangelising the benefits of internet for the
traditional businesses; the way internet could enable
offline merchants to provide their customers 24x7
availability of goods and services, and realise faster
closing of sales. He further said lots of people don’t
understand online marketing, SEM (search engine
marketing), pay per click and online brand management.
And so evangelising the concept and benefit of online
marketing could play an important role in bringing more
and more offline businesses online.

While talking
about the credit card security in the light of its
reported misuse in online payment, Vivek Nayak suggested
the media needs to play a responsive role here. He said,
unlike the common perception, it’s more risky to use
credit cards offline than online.

Virender
Ahluwalia said e-retailing is no different from brick
and mortar retailing. In online retailing too the key to
success is to understand your customers and competition
and offer your services through an online platform which
is easy to use and has been designed to provide a better
experience to its users. Ahluwalia said online is just
another form of business model which gives more control
to users. However, the need for e-retailers is to shift
their focus from product selling to solution selling so
as to provide their customers a much enriched and
satisfying experience.

While talking about the
way online has revolutionised travel industry, Sandeep
Murthy said more and more people are entering the online
travel space making more options available to the
customers. Illustrating his point, Murthy said if one
searches for an air ticket from Delhi to Bombay he could
get upto 78 travel options to choose from. No wonder,
travel forms almost 60 per cent of the total online
business in the country. According to Murthy, India is
the second fastest growing travel market in the world.
And it is expected that online travel agents (OTAs) may
capture 25 per cent of the total travel business in the
country by 2008. However, he added, the continued
success and prosperity of online travel players will
depend on their ability to add value to their customers’
experience.

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Comment

Hi,
I
am so glad someone has finally belled the railways
cat! Sure, it's great that the railways made a
move and provided online booking facilities that
actually work, buit it is also a fact that they
inadvertently did their online site a great
service by having the most miserable offline
booking options possible. In fact, I remember when
i first booked tickets on IRCTC, my family thought
the computer lying in the corner had finally done
something useful!
Posted
by Prasanna
1/22/2007

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