The session on how smaller businesses can take advantage of e-business was addressed by Vishwas Patel, chief executive officer, Avenues India; Dinesh Agarwal, founder and chief executive officer, IndiaMart InterMesh; and Rajan Mehra, country manager, new ventures and payments, e-Bay India
E-commerce provides a level playing platform to all players in the market. It is neutral to sellers, irrespective of their size, and eliminates intermediary costs and turnaround time for both the buyer and the seller.
At the IAMAI e-Business Summit 2006, the session on how smaller businesses can take advantage of e-business to accelerate growth and access newer markets was addressed by Vishwas Patel, chief executive officer, Avenues India; Dinesh Agarwal, founder and chief executive officer, IndiaMart InterMesh; and Rajan Mehra, country manager, new ventures and payments, e-Bay India.
Vishwas Patel highlighted the reason why e-commerce was slacking off in India. He said there are currently only 4,500 Indian online merchants, of which only 65 per cent are pure Internet players. Brick and mortar companies do not have the technical resources to use this medium to reach out to the desired audience. Unlike the airline market in the country, there are not enough contenders in each category to create a value deal for the consumer.
Talking about buyers’ payment options, Patel pointed out that international credit card players seemed to dominate the Indian market. Even though the card base was increasing, the penetration level was very low due to unfriendly government policies and negative press reports about credit card fraud. People in India are afraid to use their credit cards for larger amount purchases for fear of an income tax enquiry. Also, since India is a credit-averse society, the use of credit cards is not frequent.
However, the direct debit payment method had helped to reduce the intermediary costs for merchants. This method allows a merchant to instruct his bank to collect varying amounts directly from customers’ accounts. Currently, 15 Indian banks have implemented this core banking solution.
Patel suggested that to have a lower interchange rate, India should have its own mode of payment card such as the American Mastercard and Visa, British Swiss Solo and Japanese Credit Bureau.
Dinesh Agarwal stressed on how small businesses can reach out to global markets through e-commerce. Currently, there is a perception among merchants that e-commerce is based on information technology (IT). But, in fact, people have to realise that it is a marketing tool and examine how they can use it to leverage business transactions.
Another common perception is that if merchants open a website of their own, people will go there automatically to buy their products. Most of the sellers believe that their buyers are from the same world as them. Due to geographical barriers, trade habits, language and regional and economic issues, it is necessary for them to understand that they should affiliate their website with a common online marketplace so that buyers find it comfortable to place orders. This affiliation will be helpful because buyers prefer to buy from a wholesale market. It also offers them co-listing directories such as product listing and offer listing. In addition, there is the advantage of payment gateways and order tracking.
Rajan Mehra cited the example of e-Bay Motors, which has become a substantial liquid wholesale marketplace in India for second-hand vehicles. e-Bay India Motors has a dealer base of over 7,000 dealers throughout the country, all of whom are registered to buy on the platform, across 200 cities. They help interested dealers by providing them training through the e-Bay Motors Academy. The academy offers buyer training programmes, which teach the participants about the opportunities, benefits and processes of buying on e-Bay India.
The benefits include a liquid wholesale marketplace, transparent and auditable auctions, elimination of intermediary costs of advertisements and agents, and depth in the marketplace. The average age of vehicles traded on e-Bay is three years. Currently, a vehicle sells every six minutes on the e-Bay India Motors platform.
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