e-Commerce, Internet Audience Measurement, Internet Industry

The Nielsen Global Online Survey

I was generally surfing for articles on general trends and direction on eCommerce and how is it shaping up in India. The good news is that the picture is rosy, which is no different to what you would have heard elsewhere. Its not a new news. Consider this, Indian internet space is real hot, has 37 Mln users, which is a good number (compare this to China with over 100 Mln and US 150 Mln). A robust Indian financial system makes it lucrative for eCommerce growth.

Our central body for internet and mobile- IAMAI B2C reports that eCommerce is expected to cross Rs.9000 crores (USD 2,250 Mln), a 30% growth over last years figures. Travel is the biggest driver of eCommerce and accounts for Rs.5,500 Crores (USD 1372 Mln). OTAs (like Makemytrip.com & Yatra), Tour Operators, Hotels and Railways, form this category. It is needless to say that travel as a category renders itself to online medium seemlessly. The next biggest contributor is online eTailing, where the total size is 850 crores (USD 212 Mln). Online classifieds contributes 540 crores (USD 135 Mln) and online subscription making up the rest of 20 crores (USD 5 Mln).

Rosy picture indeed, when you consider that our huge base of middle class spending
population of 300-450 Mln is still untapped.

Neilson Global Online Survey corroborates this fact. According to the report that it
released on 28th Jan, 2008, over 875 Million Consumers Have Shopped Online — The Number of Internet Shoppers Up 40% in Two Years. Clothes/Shoes were the fastest growing Internet buys and “Visa” was the Most Popular Credit Card Payment Method. Read the full report here.

Another extract from the report is the following- among Internet users, the highest percentage shopping online is found in South Korea, where 99 percent of those with Internet access have used it to shop, followed by the UK (97%), Germany (97%), Japan (97%) with the U.S. eighth, at 94 percent. Additionally, in South Korea, 79 percent of these Internet users have shopped in the past month, followed by the UK (76%) and Switzerland (67%) with the U.S. at 57 percent.

Credit card is the most preferred mode of payment ( more pronounced in Asia and Latin countries). Turkish online shoppers (who represent the economic elite in that country) topped global rankings for credit card usage (91%) for online purchases followed by 86 percent of Irish online shoppers and 84 percent of Indian and UAE online shoppers. The report further says, “Shopping on the Internet with the ease of a credit card is especially appealing to consumers in emerging markets who simply cannot find or buy items they want in their retail trade. The Internet has opened up a whole new world of shopping for these consumers”. There is a list of online shopping sites covered in the study.

How much ever good we might feel reading the numbers, the fact remains that internet penetration has plateaued. The total eCommerce relevant TG will be 5 Mln, which is only 10%. The month on month growth is dismal. Broadband coverage is not increasing as expected. Moreover, the language websites is not taking off in a big way. Till the next wave comes, we will witness only organic growth.

Do let me know your thoughts and comments on this subject.



Affiliate Marketing, e-Commerce, Email Marketing, Internet Audience Measurement

Internet- A Sales Channel or a Branding Medium?

A food for thought, it didn’t strike me even when Google was making a presentation on Branding strategy. Spends more on building brands, as the cost of conversions on a brand keyword would be the least (roughly 5-10 times more than your average conversion). So invest in brand and reap benefits, increase your ROI and lower the cost of conversion. Perfect theory, instantly buyable. Another large part of their presentation was on how the brands will be built online- Content, display ads, RIAs video ads. You name it and it is on the internet. As a marketer and a category leader what would you do? Where would you put the money and how much.

Lets go a little deeper, and recall the definition of brands (a difficult one and to my mind one of the very misued terms). A brand is a sum total of Product’s Physical attributes and its experience and has a name. A strong brand should be able to conjure images and experience (good/bad) in your mind. It is the holy grail of marketing, and in an ideal state, if your brand is big enough, you don’t need to advertise and waste monies (but you do that till you get there). All our B-school course, our strategy is around how to build great brands (Mr Aarker has written 4 books on this theme and Mr Kotler tome must be in its 11th edition by now). However, we marketers are still pondering over on how to do it. More so, how to do it online. Or should we not?

Lets consider this small example, TV has 70 million households, and more than 500 channels. The black box has been the greatest invention for marketing so far (in my opinion and have no hard feeling with my other online loving folk). Experiments have proven that a communication has a greater impact and lasting impression when sound and Vision are in tandem. And then came the other inventions Computers and Mobiles (also with screens). And so it happened that someone (and followed by a number of whitepapers) announced the birth of second and third screen (please note that the first screen was television). And marketing was to be dominated by this genre.

In US it started about 20 years back and now they have 50% internet penetration, Singapore is 60% and Taiwan is 90%. For India, I only know the number of users and it also varies greatly, 25 Mln as per comScore, 35Mln as per IAMAI and 45 Mln as per NASSCOM. In short, though our sheer number is high, our penetration is very poor (I’ll update the penetration figures as soon I get it). In India, internet is still not a mass medium. Please consider the time spend by todays youth on each medium (Source Business World Youth Report 2006, IAMAI 2006)

TV: 124 minutes/day
Newspaper: 30 Minutes/day
Radio: 84 minutes/day
Internet:61 Minutes/day

People do spend time online, where does the communication stick and occupy that little space, which creates a brand. Video ads, Social community, RIA, Viral, Flash Movies and webisodes are the answers. Huge engagement, huge interaction and best of all it is by choice and recommendation (by search engine). But is this good enough to create brands? Good enough to create recall and not to use the search engine to come to the website? Will it be a talking point?

Lot of brands have done it, and have been hugely successful. Google didn’t do any advertising (and maximised PR to its advantage). eBay utilised the online community and so did YouTube and MySpace. Orkut is very popular in India and they did it with 0 advertising.

And the most differentiating factor of our medium is the measurability. Internet is one of the few mediums that can define ROI (Direct Marketing is the other). So now we can use it to define goals and plan backwards to derive the ROI. The campaign have set goals and marketers can now be smarter and more accountable. However, this brings us back again to our moot point, can it create brands. At least in India can it replace TV. And will an emarketer choose Internet whole heartedly to drive the strategy to build brands?