Growth of E-Commerce in India and Startup Culture by Mr. Shyam Katuri – Director, Jabong
On 25th March, 2015 , Vinod Gupta School of Management, IIT Kharagpur had the privilege of hosting Mr. Shyam Katuri, Director – Jabong, one of the veterans from the e-commerce industry in India, as a part of its Vaarta’15 series of guest lectures. It was an insightful session with Mr. Katuri sharing his life experiences in the industry and also giving the students a wonderful outlook on the current scenario of the budding e-commerce industry, hinting at the huge opportunity for innovation in this domain and acquainting the students with the current challenges facing the industry.
Mr. Katuri has over a decade long experience in the retail industry, being associated with brands like Walmart and Future Group’s Pantaloons Retail India Ltd. He was a distinguished member of the Walmart family, also having been awarded the Global award “Deliver the value” for best performance. He started his career with the Landmark Group following his MBA, and later went on to pursue the Senior Executive Programme, General Management from the prestigious London Business School. He is also a Polished Diamond Graduate from the International Gemological Institute, Antwerp. He is currently Director at Jabong.com, heading lifestyle categories, international brands and private labels.
The talk began with a lot of numbers which summarized the big picture of Indian retail and e-commerce in a crisp manner. Eventually it progressed onto the happenings behind these numbers, the rise of mobile telecommunications in India, the reach of mobile penetration in India, the power of the handheld small-screen device that predominates the customer’s choice over the computer while shopping, the global scenario of e-commerce (particularly in China) and the rise in investor funding for e-commerce in India.
Having set a direction of the lecture by showing the students the global happenings in the field and unveiling the large head-room for growth in this sector, he moved onto talking to the audience about the opportunities and challenges faced by the industry at large, while in their pursuit of the growth dreams. Innovation in logistics, fulfilment models and the recent appearances of drones at our doorsteps for delivery instead of the uniformed salesman was discussed about. A portion of the discussion then ranged into the dependence of the business on technology offerings and he talked about how innovation and increase of technology infrastructure would accelerate the acceptance of e-commerce as a medium of shopping for the Indian consumer. Mr. Katuri is optimistic that tax reforms in the form of GST (General Sales Tax) would pave a bright foundation for the Indian e-commerce (and retail) sectors going ahead. The huge expanse of the Indian landscape combined with the lack of non-standardised PIN codes, the overburdened roadways as the infrastructure for transport, the low success rate of payment gateways (compared with global standards), the smartphone usage community being lower than industry expectations and the low penetration of high speed internet connectivity in India were among the foremost challenges the industry faces according to him.
E-commerce provides a different shopping experience to the consumer and therefore provides a unique opportunity for companies to collect and analyze huge volumes of data about consumer behaviour and shopping patterns over any period of time. This in turn helps them to influence the consumer’s decision making with targeted advertising and offering discounts. During the later part of the lecture, Mr. Katuri also talked about the customer acquisition cost, the abuse of product return policies, cash-on-delivery facilities and fraud related cases. Laughter prevailed as the class heard how customers ordered differing sizes of shoes, only to “try” which fit them best or someone ordering designer garments while returning those that didn’t or jewellery for a marriage and then returning it under the 30 day replacement guarantee, only to have probably wearing it to a wedding in the meantime.
Mr. Katuri also highlighted the need to increase the acceptability of an online shopping idea for the Indian consumer with better technology infrastructure in payment systems, enhancing online security to address a section of the Indian consumers’ abhorrence to usage of credit cards or other electronic payment systems and offering a wider range of products. Before progressing onto the Q&A with the audience, he also talked about the lack of the “touch-and-feel” factor prevailing in online shopping and his thoughts on the impact of “experience zones” in redressing the issue.