IAMAI Digital Commerce Conference: Trust deficit a barrier to growth of e-commerce beyond metros

By Nisha Menon , afaqs!, Mumbai | In Digital | April 26, 2012
A panel discussion at IAMAI's 4th National Conference on Digital Commerce saw experts discussing the way forward to take e-commerce beyond the metros.

Internet and Mobile Association of India (IAMAI) organised the 4th National Conference on Digital Commerce in Mumbai, to facilitate deliberation on the way forward for online commerce. In a panel discussion titled 'Bharat Online: E-commerce beyond metros', panellists discussed the phenomenon of digital commerce moving beyond the metros and getting increasingly adopted by Tier 2 and 3 cities and rural areas.

The session was moderated by Kashyap Vadapalli, chief marketing officer, eBay India. The panellists included Pradeep Malu, founder and chief executive officer, iStreet; Ravi Vora, vice-president, marketing, Flipkart; Harinder Takhar, chief executive officer, PayTM; Jiby Thomas, co-founder and vice-president, marketing, Quikr; and Ashutosh Lawania, co-founder and head, sales, Myntra.com.

Kick-starting the session, Vadapalli said that consumer traction for online commerce has exploded in the last 10 years due to growing awareness and increasing comfort in transacting online. He said, "E-commerce is growing rapidly. What was considered to be an urban trend is now changing and smaller towns and metros, too, are contributing to the growth of digital commerce. Four factors that are critical to the adoption of e-commerce in smaller towns are awareness, availability, affordability and accessibility."

The panel concurred that the most important barrier in the adoption of digital commerce in Tier 2 and Tier 3 cities and rural areas was trust deficit. Takhar said, "Trust is a key factor in driving e-commerce. The issues faced by consumers in metros and non-metros are similar. Unless the marketers take steps to address the trust deficit, the consumers will not be convinced to try the medium and use it."

Traditional mass media marketing methods will not work to acquire small town consumers. Bringing in the aspect of marketing strategies for spreading the word about digital commerce portals, Vora said, "The reason why a consumer in a non-metro comes to an online portal to make a purchase is totally different from the reason why a consumer based in a metro does so. In such a scenario, it becomes imperative for the digital commerce websites to employ tailor-made marketing communications to drive home the point of a safe and secure transaction."

Malu of iStreet elaborated that a change in social behaviour is required to get people in the non-metros and rural areas to adopt digital commerce. He said, "By trying to get the non-metro consumers to adopt digital commerce, we are attempting to change the social behaviour. We must remember that there is a lot of peer pressure that comes into play when a consumer shops online. One bad experience may keep him/her away from transacting online ever."

Another factor that is extremely important to take e-commerce beyond metros is to simplify the platform on which a consumer functions. Throwing light on this issue, Thomas of Quikr said, "We as marketers must understand that the audience in metros is different from those in non-metros. E-commerce platforms must be simplified in order to ensure stickiness. It is also important that e-commerce models are periodically reviewed and re-modelled to ensure that digital commerce becomes inclusive."

Introduction of various modes of payments, too, has been attributed as reason for adoption for the growth of e-commerce in small towns. The cash on delivery option has boosted the digital commerce growth significantly. Asserting this fact, Lawania of Myntra.com said, "The introduction of cash on delivery payment option has enabled the e-commerce portals to build trust amongst users in Tier 2 and 3 cities. The consumer can now pay after physically seeing the product delivered to him/her. This ensures that e-commerce is adopted more in non-metro areas."

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