E-Commerce players need to adopt hybrid of deals and delivery: IAMAI's Digital Commerce Conference

The e-commerce industry has grown substantially in the past one year, and the Cash on Delivery model (COD) of collecting payments from customers has been credited with unlocking a significant potential of the industry. However, while COD has helped e-commerce firms increase their top lines several of them are also struggling due to low margins.

At the 4th National Conference on Digital Commerce, organized by The Internet and Mobile Association of India (IAMAI), experts came debated on the sustainability of the delivery model of e-commerce as compared to the deals model. A general consensus among the speakers was that since the industry is relatively nascent in India, both models are likely to be adopted by e-commerce players.

Speaking on the possibility of convergence between both models Gaurav Kachru, Group EVP & CFO, Smile Group and Co-Founder, Deals and You said, "Fundamentally, I think the two models of deals and traditional e-commerce will converge at some levels. We already see deal players moving to more static services like listings and e-com players using deals to attract customers. Deals offer the opportunity to convert first time customers to e-com and we are likely to see more retailers use deals to acquire new customers."

Agreeing with Mr. Kachru's opinion, Rajesh Nahar, CEO & Founder, CBazaar added, "In the long term both deals and delivery will work since they offer different solutions to different customers. Deals make customers take implusive purchase decisions and are good to add a spike of customers to the site. While a delivery model retailer builds a customer base on: the basis of his product catalog."

While e-commerce players are working towards fine tuning their models to cater to varying customer needs, experts also believed that the industry needs to look at addressing customer pain points and creating a seamless experience for customers. Stressing on the need of maintaining a high level of customer experience, Mr. Kachru added, "The customer experience is a key area for both e-com and value commerce (deals) players. We have learnt with experience that customers do not expect lower service levels due to price and it is critical for all players to focus on aspect of business. Logistics and delivery experience is a key challenge for ecommerce players. If customers are turned off due to a poor experience, they may not experiment with e-commerce again for quite some time."

In a research report on the e-commerce industry, released by IAMAI in association with IMRB, "Trust' was one of the key factors that led to customers staying away from the industry. The e-commerce players need to ensure that they continue to improve and maintain high levels of customer satisfaction and trust as the industry continues to evolve.