Doing eCommerce in INDIA?? !! why it will work.

Doing eCommerce in India ?? !! why it will work.

First things first. eCommerce has stayed in India, Ten years and counting.

It is only recently that is has become the flavor of the season for the VC’s for the second time. I remember in the 2000-2003 era, it was the same… the millions were less but the flavor was as strong … I remember meeting people during that time wanting to start eCommerce sites. 

Some survived, some changed hands, some perished or I should say got burnt in HELL… And now it’s a rebirth. 

Travel is the biggest example of this success. And me saying this was like saying that there is an elephant in the room. 

Why did this work! According to me for only one simple reason, digital delivery of the product. 

eTickets did not get into the rut of  last mile courier, cost of delivery of the product and the ecosystem of the GDS’s made it easy to manage product inventories. Will this survive with all the airlines now providing similar services directly on their site? We will have to wait and see. As of now its happy times (my perception) for the companies and the airlines and not to forget the investors, specially the investors as they have seen one listing already and I am sure at least one more on the anvil. I am sure the next big-ticket item to go the same heights will be online life insurance covers. 

Now the non-travel sector eCommerce is something of a worry as of now (early days of the round two).  But I am sure it will survive. 

Here is my take on it.

Like all starting retail shops in the market near you, the first most important
thing is to get customers inside the store. Once the user is inside, then let the
user experience, price of the product and the service support take over .

But to take that space in the market, you have to pay security deposit, high retail rentals, or if you have lots of monies (inherited), you buy the place. All of this the retailers understands is called investment into the business, which in most cases they don’t even think of recovering as that is the pillar on which there business is built. And if it is bought space then that investment will pay for itself in India with real-estate prices going up up away. 
Comparatively: An online retailer, needs to open a website by paying a couple of thousands dollars to developers and he is up and about. With payment gateway, logistics support for deliveries etc.

Now the advantage that a small retailer in a market has is that he has a captive audience to cater to, the foot falls in the market, enables him to scale the business to a certain level and for the next one year he will only think of recovering the operating costs, with some monies for himself in it. Bare Bone, no fat. If he survives for TEN years, is when he thinks he has made it big.

On the other side, an online retailer has to struggle to get this foot fall or visitor, and in most cases the first visitor is actually a paid 4 visitor by the website owner.

I think this is essential, as in the clutter of the eCOM shops; you have to tell that you exist; this is where the eCOM companies are spending most of the monies.

Now there are a few avenues in this line of approach.

Some of them are being tested out by various eCOM sites.

1. Coupon codes. : On the eCOM side, distribution is the key to success, and coupon distribution is one of the key distribution articles, it similar to flyers that the offline people send to entice people living in the locality to come and buy at there shop, and also give incentives to do so.
   
2. Discounts / Best price spiel: Another one, which is used effectively by the larger eCOM companies. They believe SCALE will Trip over everything on the Internet. Some companies have taken it to the level where they are selling stuff even below its buying price. Short-term solution with a long team impact. We have companies in the offline space who did exactly this (sabka bazaar is one such example, I don’t think they sold product below buying price, but good discounts on the MRP and that too on low ticket items)
   
3. Gather distribution lists: All the deal sites today in India are aggregating users, getting them to register for some instant gratification, which they plan to milk over a period of time by sending them products and services at discounts or as special user offers.  This is like the guest book at the normal retail shop.

Most of the good teams running the eCOM businesses know that they will not make monies now or on the first deal, it will be the 10^th -12^th – 20^th transaction or more that they will breakeven on the money used to acquire the customer.

Traditional business do not have these matrices to measure up to as they do not have to bear with the fact that the foot falls into their shop has a cost attached to it and they need to make sure that the footfalls buys. There is to some extent no need for this information.Except one stores that I know of that track a conversion ratio of walk-in to purchase. (Croma)

Interestingly, I am sure you would have noticed in a big mall near you, that shops keep on changing hands. One day it one brand and after three / four months or max a year, the shop changes the brand. Is it to say that offline retail commerce is failing?  

Having said all the above, the following points is what makes me think that ecommerce will stay and be the next big ticket for entrepreneurs in India.

1. Easy funding of projects (VC), similar to retail banking doing the first round of funding for the retailer for stocks.  The Risks are higher but so are the returns.[ This is Now, might not be the case middle of the year.]
   
2. Smart Technology being made available to test market the shop. Now you can setup a retail shop for as low as 2,000-10,000 per month on SAS platforms like MartJACK. and a few more.( I remember this to be as high as 10 -20 Lacs a few years back, there are a few companies still selling at this price. HUH!!). Test it out and see if a particular vertical works for you.
   
3. Last mile puzzle being solved by logistic guys. Courier companies and more deeply integrated into small towns. With some eCOM companies starting their own courier companies to ensure a great delivery experience.
   
4. “GST“:  this the Real fuel for eCommerce. This will enable eCOM companies to bill directly form there central warehouse and deliver the product, with out having to bother for state taxes / octroi / completely redundant documentation etc…
   
5.  Interesting payment options being made available. Now you have the following. 
1. Cash on delivery 
2. Cash before delivery (http://www.gharpay.in/) 
3. Credit cards 
4. Debit cards 
5. Cash cards 
6. Internet banking 
7. Instant conversion to EIM @ zero % interest. 
8. Mobile wallets 
9. Prepaid vouchers
   
6. Govt. Initiatives 
1. GOVT websites now take e-payments 
2. Utility bills are being paid online
   
7. Security 
1. One time Password (OTP) 
2. Instant notification for transaction to registered mobile phones
   
8. Social Media proliferation 
1. Get more feedback on before purchase information 
2. Flaunt what you just bought attitude. (self esteem and near real-time). 
3. Get friends to recommend your next purchase.
   
9. Comparison Shopping (another biggiee waiting to happen).
   
10. Online Media channel on a COST Per CUSTOMER available in INDIA now (last four-  five years, the scale is happening now).
    
11. General growth of users who are now transacting on the Internet for the following : Recharge( MOBILE, DTH, Insurance)  / Bank transfers / Online banking / Restaurant booking / buying deals online(discounts)

Growth in online traffic to eCommerce sites.

(Courtesy: Hindustantimes.com) , additional insights also available on eCommerce on the lnk below .. 

See link:: http://bit.ly/AANc9X

And of course the Multichannel digital marketing and offline marketing combined together will help the eCommerce company to delivery to both the users and its investors. So use them wisely. 

In the end, the only thing that will fail in the eCommerce industry will be teams and not the concept of ecommerce. Be ready for a long haul if you want to make an ecommerce company. If you are starting up an eCommerce site thinking that some one else will buy it out. BIG MISTAKE. think twice or maybe TEN times... :), Not all will get lucky.

Let me know your feedback. 

I will be writing on the basic digital strategy for eCommerce site in India. A start-up guide to the same. Hope you all like it. So keep watching this space.

Attribution, attribution, attribution ==== Confusion for all ecommerce.

Attribution, attribution, attribution ==== Confusion for all ecommerce.

With the boom of ecommerce in India and the eco system evolving, one of the biggest challenges that an ecommerce company faces on the sales side is the digital channel sales attribution.  With media monies being spent in Corers and Corers (all VC monies), all of them grapple with the monster of attribution.

Speak to any ecommerce digital marketing manager in the eco system and “MULTi” channel is what they say is going to get customers and because it is multi channel, it becomes even more imperative when it comes to attribution.

Multi channel for an Ecommerce website looks some thing like this.

1.     Search

a.     Paid

b.     NON paid (SEO, which is also paidJ )

2.     Affiliate

a.     Networks

                                               i.     Network 1 (30 day cookie)

                                              ii.     Network 2 (1 day cookie)

                                            iii.     Network 3 (Session based registration)

                                            iv.     Network 4 (Crazy, my bosses way of cookie-ing)

                                              v.     Network 5 (blind networks).

3.     Paid Media

a.     Display Media

                                               i.     Website 1 / campaign 1

                                              ii.     Website 1 / campaign 2

                                            iii.     Website 2 / campaign 1

                                            iv.     Website 2/ Campaign 2

                                              v.     Website ‘N’/ Campaign ‘N’

And so on….

b.     Emails inventories

                                               i.     Internal (self promotion)

                                              ii.     External (Opt in inventories)

4.     Retargeted inventories

a.     Retargeting network 1

b.     Retargeting network 2

5.     Coupon Distribution

a.     External but digital

b.     Offline partners (Banks/ Credit card companies)

c.      Coupon sites (smart guys, all customers love them)

d.     Cash Back sites (nice to have, but too many have proliferated)

Coming back to sales attribution

Issues

Here are the possible attribution issues an ecommerce marketing manager will face.

Scenario 1 : Already registered user of a website let say “terimeritshirts.com”( good name, is available right now. J. )

Step one: gets a mail on his Rediff mail id. (Bought paid media by the site, thru an agency). [day 1]

Step two: Clicks on the mailer and buys the product.

Attribution Count: ONE – Rediff wins.  This was a walk in the park for the eCOM marketing manager.

That was easy. Now let us complicate this

Scenario 2 : Already registered user of a website let say “terimeritshirts.com”( as mentioned earlier, this domain is available )

Step one: gets a mail on his Rediff mail id. (Bought paid media by the site, thru an agency). [Day 1]

Step Two: user goes to site on that day, does not buy product.  [Day 1]

Step three: See’s a retargeted banner on NDTV.com thru retargeting network 1 [Day 10]

Step Four: Click’s on the banner goes to the site does not buy.  [Day 10]

Step Five: Opens his G-mail box, sees a banner in the right hand side (contextual banner). [Day 11]

Step Six : Clicks on the banner and still does not buy the product. [Day 11]

Step Seven: On the fifteenth day opens the website directly and buys the product. [Day 15]

Attribution Count: . Think think : who, where, what…

See what I mean, and this can go on and on… we can add more permutation and channels in the above example to complicate this further.

Answer this for Me. ??

Q. So which campaign according to you got this customer and who would you attribute this sale to and why?

.

.

.

.

.

Spent some this on this one sale. Now imagine if the eCOM marketing manager has to do this for 1000 sales every day … or even more…

Trust me when I say this almost all eCOM companies suffer from the attribution syndrome for the following reasons.

1.     All the marketing teams (Paid Search, Media, SEO, Affiliate, brand) work in silos and not cohesively to understand the larger issue.

2.     Lack of attribution tech to handle this crazy way of tracking sales. Ask the nearest eCOM marketing manager and he still manages this data on a monthly basis on an excel sheet. (If he can get this from some where in his system).

3.     Business rules not present. (First referrer vs last referrer).

Solution:

1.     Run all your campaigns thru a single tracking solution. Use either a Known version of the tech or create our own, and be transparent.

2.     Set Business Rules.

3.     Give each digital marketing team lead the larger picture.

Now you will ask why is this so important,

Firstly : As an eCOM marketing manager, you should know what works for your brand, site, sales etc.

Secondly : all sales don’t happen at the same time the visitor comes to your site. eCOM users are smart and want to get the best deal from the website, so they will take time and scout around for the deal or just wait for a opportune time to buy the product.

And Lastly : Money is at the end of the day money , spending it wisely will ensure that the company and its promoters don’t not have to go for the next round of bank robbery. J .

 Let me know your thoughts.

Buying Efficiencies : Cont ... topic one CPM(Cost per thousand impressions)

CPM (Cost per thousand impressions): The easiest of inventories to buy and sell.

Continuing from where I left last time. 

In this DnA of Internet, "CPM" is what everyone says .... walk in the park. Every one can do it, but most don't understand that this walk in the park can be made more interesting. I will try and give some insight to this. 

Cost per thousand(mille) or impression served of a particular banner on the page the user was viewing is a complete no brainer... although some things to take into considerations are the following aspects.

"OTS : or Opportunity To See". Split the page in to four zones (top left, top right,bottom left, bottom right). Unlike the traditional newspaper print add where the whole page is visible to the reader in on go it is important to note that on internet the user will have to scroll down to view the complete page. So it become imperative that a media planner calculates the OTS precisely and takes pricing accordingly. 

Eg. A home page banner top left / top right will have far more OTS % than a Home page banner on bottom right / bottom left.  Again a Section page top left banner might have a higher OTS% than a home home page bottom left / bottom right banner placement.

If we add another set(s) of data to this : "Reach of the website" along with UU (unique users) and not to forget "Relevancy" then this calculation becomes even more precise science.

The information above might sound rudimentary but I personally feel that most media planners miss this out in the high stress media planning stage, where budget takes precedence over all sanity, if not then the client's likes and dislike will come into play. :)

So next time pls show an OTS graph to the client and explain why a particular inventory has been taken in the media mix.

Pls Note : this kind of approach can work well for branding campaigns and not for performance campaigns.Performance campaigns will be explained in upcoming posts.

Unique users : Instead of buying impression's, try to buy users... Unique users if possible. When planning a large branding campaigns it is imperative that the media planner explains to the advertisers this concept and also use technology to back up their research data. Also it is important to know that top 5 website of the same genre in a media plan would result in a duplicity of users(between 30-40 percent), so repeat media burn needs to be minimized. 

CTR% (Click Thru Rate) : One of the most crucial matrices to watch otu for on a real time basis as this parameter defines a lot of things. 

1. Creative Troughput : How effective is your creative . A higher creative throughput would result to higher visitors on site resulting into higher users interaction.
2. Brand Recall : not one of the most measurable parameters on the internet, But I am sure that a good CTR% would help the brands accumulate quick brand recall brownie points. 
3. eCPC (Effective cost per click) : A good media plan delivers maximum number of users within the media budget while keeping the effective eCPC as low as possible.

Some importants thing to keep in mind from an operations perspective :

1. Always keep a second set of creatives ready before making the campaign live. 
2. Always use third party adserving tools for a centralized reporting & billing perspective.
3. Keep a close watch on the referring url's, as to where the impression is being served. 
4. Keep geography targeting always on so as to improve relevant user reach.

Some good adserving tools : Zedo,Dart,Helios,OpenX(free user setup) 

Let me know your thoughts on the same. I will be doing the next post on CPC inventory buying.

Buying Efficiencies In Digital Marketing

First things first.

The Indian digital landscape is so used to buying advertising inventories in the following currencies CPM (cost per thousand impressions), CPC (Cost per click), CPL (Cost per lead) that it does not want to try and use the full potential of the term digital (track-able) aspect of media buying.

I am sure that all digital media planner have to answer the following questions while doing reports to advertisers for digital campaigns being done by them or their agencies.

Q1. If I bought clicks then how come the number people visiting my site are 30% lower than the clicks being reported

Q2. The leads that I have got are junk, my call center tells me that out of all the leads that were generated 50% of them were not contactable.

Q3. Impression being served by "x" publishers are being served at places that the user will not see them.

Q4. Email ID registrations received from the media campaign have a very high bounce %.

On the performance side all the above questions are the ones we face every day. Here is my take on a few of them.

For the past so many years I have seen that all publishers feel very happy selling CPM inventories. The only reasons for doing that in India is because the "freeuser" mentality is very high here and I am sure it is world wide as well.

So it becomes very easy for publishers to sell these free user page views to advertisers at fantastic rates and be over with it. They don't want to bothered by the fact that the advertiser using this digital medium over the years have become intelligent and want that extra mile(s) for the buck they are spending.

Just to give you an example. INR 20 CPM inventory become a INR 20 CPC if the CTR is 0.1%. ie. 1 Click for every thousand impression. And typically an INR 20 buy on any good portal would mean that the advertisers banners are running at the bottom of the page or in some obscure location on the website, resulting in adding no value to the campaign. on the other side a CPM 200 purchase @ 0.4%(an acceptable normal response rate) CTR is actually INR 50 per Click. !!

The only thing this kind of purchase will look good in, will be the reports that the agency would be giving to the advertiser at the end of campaign and claiming that they were able to give a very high "Share of Voice" or reach to the advertiser. !!

But what the advertiser needs to understand is that this kind of share of voice is not relevant as a typical webpage will have 4-5 ad units and if at all they want to look at the share of voice then they should divide the impressions by a figure of four or five. which will make it base less to even talk about.

Coming back to the topic. Buying efficiencies is not some thing that is taught in any institute or part of any communication coursebook. The only thing mentioned in the best of marketing books is the fact that you can negotiate the best rates with publishers if you sit across the table with a lot of monies committed on top of it. I say committed because an advertiser might not spend the same but it a good figure to negotiate rates with. I am over here talking only digital inventory purchases. This statement might not hold true in-case of offline i.e. print/ tv / radio etc.

Efficiencies can be defined in a lot of ways. Cost efficiencies( most common but not the most logical), value add's ( one term used and abused by a lot of publishers), quality of traffic, inventory positions (first scroll vs mast heads) etc .

But what most digital planners forget to look out for are the following efficiencies .

1. Are the click being bought converting to real traffic on the advertiser site.
2. What is the user doing after coming to the advertiser's site
3. Is the data being collected on registration of this user any good, can he be reached out later.
   

A lot of advertisers have started asking these questions back to the planners and I am sure a lot of them are also working towards providing answers or at least a plausible  solution to the advertiser. 

In the next post(s) I will try and answer one by one a solution to these above questions as each one of them would require me to dig into aspects of technology, ad serving, tracking etc. and would be too long to add to just one post. keep reading...

FaceBook Marketing in India for the Starters

The first thing that comes to our minds (agencies) when we plan a face book marketing campaign is numbers/figures… let us look at a few of them below:

Figure number 1. Total number of face book users
Figure number 2. How many can I get as fans or likes?
Figure number 3. How many will contribute?
Figure number 4. How many resources will I have to dedicate to moderate the content on my fan page or wall?
Figure number 5. How much content do I need to put in as a brand to make my page be used by / engaged with by the user?

With all these numbers in mind I think the starting point is often completely missed.
The user… (ME and YOU)
I believe the best in class fan pages are those that have the following three C’s in place

1. Content
2. Care or let me say Careful
3. Character

Let me explain

Content: Your product features are important but what is more important to the social media audience are the following pieces of content:

1. What is in it for me?: Usage, brand value, celebrity quotient, usage benefits etc
2. What difference does it make to me?: Will I be liked by my peers by being associated with the product or will I be considered different or cool?
3. “Visual Pleasure” is also another important factor in the content piece.We all like good things in life.

Anecdote: I am what I am at home but want to be perceived as an improved / enhanced version of the same on the social media side.

Care: “I hate you !!” is a strong statement to be made in a social networking environment as it carries a lot of weight both for the person who says it and to whom it is said. Following things have to be taken care of while marketing on a social platform:

1. Social marketing will allow people a platform to rate / inform / ridicule / engage with you as a brand or product. So beware and watch out!
2. What matters is user engagement directly with the product or brand to ensure direct feedback! And we all know that not all feedback would be good, so you have to ensure that negative feedback is handled with utmost care from the perspectives of both the brand and the commenter.
3. How much moderation? This is useful as long as you keep the focus of your moderation within permissible limits (lewd / demeaning / sexual comments are a complete no no). Every feedback should be responded to promptly and if possible with a thank you or a corrective recourse.
4. Free for all: I don’t want my comments to be edited/modified as long as what I am saying is not indecent or demeaning towards the brand or its values.
   

The reasons for this could be as follows if we look at it from the perspective of the user’s psychology:

1. I share because I care …
2. Freedom of speech in India. (“mera janam sidh adhikar hai”) i.e. My birth right
3. “Teri shirt meri se safed kaise?”. i.e. Self Ego
4. I will have the last laugh or word

Character : or the Characteristics of a Social Marketing Campaign: From my perspective as a user a Social Marketing Campaign MUST have the following characteristics:

1. Lively: the fuel that keeps the fire running. The fuel for any successful social gathering is a cumulative focus of the group towards one idea or objective and that only happens when the person at the sound box keeps the audience focused on that goal. In an Internet gathering (social media) I believe the same rule applies.
2. EQ or Emotional Quotient: This is what drives the audience to achieve the desired objective for a social media campaign, ensuring the character of the social media campaign affects the audience on an emotional playground.
3. Together we can move the world: Common goals are important and the shorter they are, the better.
4. Some more characteristics that need to be in line with the brand communication: Smart/ Intelligent / Forthcoming / Problem solving also need to be highlighted as a part of the social media activity w.r.t to the following .

• Landing page
• Banner communication
• Content gathering
• Response to users

Anecdote: Emotions are not always sad .. There are a whole lot of them like fun / happy / excited / love etc… you just have the explore them.

Numbers … Numbers… Numbers...
Coming back to numbers: 90:9:1 Social Behaviors Rule

90% Lookers (maybe fans)
9 % Contributors ( one contribution every two-three days)
1 % Serious Contributors (one contribution a day)

If the above rule has to be followed in the Indian context, then a matrix for a successful campaign would look like this.

100,000 fans
9,000 Contributors
900 serious contributors

This I believe is completely wrong in the Indian perspective. One also needs to understand that as a country we are mass followers and with very high free user density.

I believe a brand in India would aspire to see the following.

100,000 fans
4500 contributors
450 serious contributors.

In the light of the above data analysis a serious campaign for a year on the social media side would involve monies in the range of 8-10 Million INR . Here is the breakup.

1. Setup Cost of fan page : INR 100,000 or less
2. Any application development on the fan page : INR 100,000- 500,000 or less[a lot depends on the creative input.
3. Content editor (per month ) : INR 25,000
4. Moderator (per month) : INR 25,000
5. Original Content gathering and user engagement (per engagement executive ): INR 15,000

And then there are the usual media costs

User aggregations is available on the following models in India

Most popular:

1. Cost per Fan: INR 20- INR 30 depending on target audience for the product or Brand
2. Cost per visitor or Cost per Click with in facebook: Between INR 5-12 depending upon audience preferences
3. Cost per visitor or Cost per Click from Google Content network: Between INR 4-8 depending upon genre of keywords being targeted

Other Options.

1. Cost per visitor or Cost per Click from Google Search: Between INR 5-25 depending upon search terms being targeted
2. On the display side on large Indian portals the price on CPM basis varies from INR 20-INR 450 so this would depend on the media planner and the targeting he is able to bring to the campaign.
3. Viral Based on contest: Media 1,000,000/-, contest giveaways 200,000/-

In all face book is a great medium. But how you use it keeping in mind your next campaign is most important.

Note : cost indicated above are indicative and not a defacto but the headers are important.