Ecommerce war between product and services-based platforms
At a time when the entire Indian market is going euphoric with the ecommerce wave in the country and the growth it has seen in the last one year, online services are still facing a tough time when it comes to selling their service to a fresh consumer base as most of them continue to be skeptic about the service market online.
In the products space players like Flipkart, Myntra, Jabong have shown exponential growth in the last one year whereas services platforms such as PolicyBazaar, BharatMatrimony, MakeMyTrip who have been in the market longer have not delivered high growth numbers.
Most of the services platforms enjoy monopoly in the market as the services industry is largely a vertical market and is extremely fragmented in terms of structure. “PolicyBazaar has almost 95 per cent of the market share. It does not face competition from online peers but offline services as a large chunk of the Indian still does not buy financial services online. Insurance is a kind of service where you need to build trust and brand loyalty with the consumer,” said Yashish Dahiya, Co-founder and Chief Executive Officer at PolicyBazaar.com on the sidelines of an ecommerce summit organised by the Economic Times.
According to Mohit Tandon, Co-founder of Delhivery, ecommerce solutions platform, one of the major flaws with online shopping of services is the cash on delivery options not available for service as consumption begins at the point of sale unlike the case of tangible products like apparels, footwear or consumer electronics.
He added that 75 per cent of the e-consumer market opts for the cash on delivery options as they are not comfortable to share their net banking password and credit card details online. “This perception needs to change before we can see online service picking up momentum in the online space,” Tandon added.
However, Mr Dahiya believes that going forward the scenario is expected to change, once people in India get comfortable with the idea of online transactions and buying services online, ecommerce service player will witness growth.
Further, one of the most striking different between the two categories of online players is their experience on the cyberspace. Apparel and footwear brands started their journey from the offline retail stores and then moved online unlike services like matrimony and insurance policy which were exclusively launched on the online platform.
On most occasions, consumers transacting online for tangible products have already tried the product offline and e-shopping has just changed the medium of purchase but so is not possible for services market.
While marketers claim that India has shown impressive growth in the ecommerce industry, this grown hasn’t occurred across all platforms and has remained restricted to selected players. Sushobhan Chowdhury, Vice President and Head of Digital Strategy at Hungama Digital Services said, “There are immense opportunities for service businesses on the ecommerce space but detailed market research is required to develop these services and consumers need to made aware about the existence of the services. Only then this market can grow.”