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AgTalk | India eCommerce story is still at a nascent stage: ebay's Kashyap Vadapalli

India’s leading eCommerce marketplace, eBay India recently came out with its first quarter report titled “Battle of the Gadgets” that talks about significant purchase trends of India’s top gadget -laptops, digital cameras, mobile phones & televisions. The much awaited industry reference report shares insights on actual consumer consumption trends through an exhaustive study of gadget brands, cities & models across the country.  
Post the release of the report, Adgully spoke with Kashyap Vadapalli, Chief Marketing Officer, eBay India to find out more about the growth of eCommerce in India, the important trends, plans of eBay and the future trends. There could be none better than Vadapalli to talk about this as he is credited with provoking eCommerce trial and building the brand, eBay India. He is a member of eBay India’s Leadership Team contributing into organizational strategy and decision-making. In his current role, Vadapalli leads teams responsible for all aspects of the buy-side businesses and processes – including brand management, acquisition, activation, retention & loyalty, and the import buying BU. Prior to eBay he had stints with Google India, Tata Interactive Systems USA, and Cadbury India respectively. Vadapalli is a Bachelor in Electronics Engineering from Birla Institute of Technology, Ranchi and has a PGDM from IIM-Calcutta.  
The following are the excerpts of the conversation. T  
Adgully (AG): How has eCommerce evolved in India as compared to its western contemporaries?
Kashyap Vadapalli (KV): Today, eCommerce has become very popular among consumers who buy a variety of goods & services from brands and small businesses. eCommerce has come of age in India too and this decade is likely to be the decade of eCommerce. According to the recent IAMAI report, the Indian eCommerce industry is pegged to grow at over 70% while globally it is growing at around 10%. 
Compared to evolved markets like the West and Eastern nations where eCommerce is extensively used, the India eCommerce story is still at a nascent stage. In evolved markets, eCommerce enjoys a 10 -11% growth rate vis-à-vis physical retail sales, which stands at 2 – 5%. What is important to note is that the India eCommerce story is not about size, but about the growth rate. Consumers are increasingly adopting online shopping and expanding this growing market. 
AG: How would you describe eBay India’s journey so far and where does it stand today amongst competition?
KV: eBay globally as well as in India is an eCommerce powerhouse. Our target market is the online shopper and we enable millions of entrepreneurs whether they it be brands, small businesses or individuals to sell thousands of products across technology, lifestyle, collectible & media categories to the online consumer. eBay is the pioneer of eCommerce and has changed the way people shop around the world. It is a market leader in nearly all of the 39 markets where we have our own operations.  
Today, eBay India is the leading shopping destination for savvy online shoppers. 
AG: What are the attributes you feel that are responsible for eBay India’s success in India?
KV: The concept of eCommerce has evolved over the past decade to cover transactions over the web, mobile, telephone and even television. Today, eCommerce has become very popular among consumers who buy a variety of goods & services from brands and small businesses. We are India’s largest eCommerce marketplace and this is possible due to our core value of trust. We offer consumer a safe and secure environment to buy & sell and also offer a variety of products with best deals. Consumers eagerly await our daily, weekly and monthly deals. 
To enhance consumer experience, we have introduced two pioneering services exclusively for India consumers i.e. eBay Guarantee and PaisaPay. These services guarantee a safe, secure and transparent transaction between the seller and the buyer:
PaisaPay, eBay’s secure payment gateway, allows consumers to pay conveniently via credit card, debit card, net banking or EMI. The payment is released to the seller only once the buyer confirms receipt of the item
eBay Guarantee offers all eBay buyers a replacement or refund on all transactions in case they are not 100% satisfied with the product they purchased
We also have Global Easy Buy ( where consumers can buy products from and pay in India rupees. 
AG: What are eBay’s plans going forward? What are the new initiatives on the anvil?
KV: We wish to reach out more to women users and offer products & deals that suit them better. We also have plans to partner with more brands that will allow them to set up shops on our site. We are focused on enabling Mobile Commerce allowing consumers to access eBay on the go via their smart phones or tablets & encouraging easy price comparison before their shop offline. We are continuously enhancing the eBay shopping experience to make it easier for consumers to find, buy & pay for products online.
AG: Which gadgets have huge potential and how will you rank them?
KV: As highlighted in our recent report ‘Battle of the Gadgets’ Q2 2012 (Apr-Jun), Samsung retains its lead position in the mobile phone category with a 26% market share, followed by Sony on no.2 and Nokia on no.3. Sony beats Samsung and gains the number one 1 position in the smart phones category with 34% market share. We have seen a tremendous upswing in the penetration of smart phones in non-metro India and we foresee this phenomenon to increase further in the coming quarters.
As for laptops, tablets are an emerging trend, growing faster than regular laptops and net books. Apple gains #1 position with 17 % market share. However, amongst models iPad 2 slips to #2 with Micromax Funbook taking the lead. Tablets transactions have gone up by more than 90% in Q2 as compared to Q1. Interestingly, 53% of tablet transactions come from non-metros. New launches from Karbonn, Micromax and iberry made tablets more affordable for Indian value seekers. 
AG: How important is logistics and back-end in these and how does eBay handle it?
KV: eBay India is an eCommerce market place where buyers & sellers meet. Our sellers directly ship products to consumers through private courier companies & Indian Postal Service. Our seamless integration with sellers & courier companies allows consumers to track the movement of their products and assures them timely delivery. Logistics contribute to the last mile engagement hence are vital for a delightful shopping experience. 
AG: Where do you essentially see the growth coming from? What is the contribution of non-metro shoppers to online retail?
KV: According to the eBay India Census, there are more than 3311 eCommerce hubs in India. 1,267 rural hubs are transacting online with 1 out of every 10 purchases & 1 out of every 20 sales are from rural India. Metros (India) contributes 51% of all eCommerce transactions while Tier 2&3 Cities (Bharat) contribute about 41% of transactions & rural India contributing to 9% of transactions. 
We foresee non-metros contributing significantly on eBay India. The absence of physical retail outlets and penetration of the internet are the major contributors to this trend. With high disposable incomes, their need for variety & selection gets satiated through websites such as ours that offer over 6 million products across over 2,000 categories at any time of the day. 
AG: Are there any strategic initiatives planned by eBay in terms of new investments and partnerships?
KV: We regularly partner with companies to provoke eCommerce Trial for their consumers. This includes engaging partnerships with Vodafone, HDFC Bank, ICICI Bank, Axis Bank, PVR Cinemas & Café Coffee Day.  
AG: How is Mobile commerce growing and how important is it in the Digital Commerce space?
KV: Internet penetration along with the exponential growth in smart phones, tablets and other web-enabled mobile devices has led mobile commerce to take off in India. Mobile Commerce is becoming important not just for operators, but also for consumers who are using their mobile phone as a window to transact ‘anytime & anywhere’. More than 65 million users across the globe use eBay applications on various platforms such as smart phones and tablets.  Globally, eBay has been at the forefront of commerce on mobiles. eBay Inc clocked in revenues of 5 billion dollars globally from Mobile Commerce in 2011 and expects to hit the 10 billion dollars mark in 2012.
eBay India (, India’s leading eCommerce marketplace, has been an active evangelist of eCommerce &Mobile Commerce in the country. With a dedicated application on the iPhone, iPad, Nokia, Android & Windows platforms, eBay India continues to add multiple channels to enhance one’s shopping experience.
Our key focus around mobiles in 2012 is to get greater penetration of eBay India apps (iOS and Android) and encourage people to use this as a device to check prices before shopping offline, thereby reach for your phone before you reach for your wallet. So the idea is to create an entire generation of smarter shoppers.
We recently launched a Mobile Commerce survey report to understand the adoption & usage of mobile internet. Highlights of the eBay India Mobile Commerce Survey were:
  • Over 94% of Indian smart phone users access the internet on their mobile: The eBay India Mobile Commerce Survey results indicated that a large majority of Indian smart phone users are accessing the mobile internet and as many as 64% of them have upgraded to 3G services. As many as 80% of the respondents claimed to be always on the internet.
  • The Home is the favourite access point for the mobile internet: Over 84% of the survey respondents expressed that they accessed the mobile internet at home followed by 66% who accessed it at work & 55% who accessed it while waiting for their friends. The malls, restaurants, theatres, airports & the commute were the other times of access.
  • Shopping is the third most popular category of search after emails & social networking: 70% of smart phone users access online shopping websites.
  • Over 87% of Indian smart phone users compare Product Prices online: This is more popular than travel tickets, movie timings or contact details.
  • Check your phone before you reach for your wallet: 57% of smart shoppers check prices online before they shop in a mall or a store. Over 30% of users have stated that they always find better deals online & 49% have stated that they ‘Mostly’ find better deals online.
  • 68% of users have made an online purchase using their smart phone: Digital Commerce is gaining traction with Indian smart phone users.
  • Gadgets are the most popular online purchases:  68% of mobile internet users have bought gadgets on their smart phone followed by 40% who have bought clothes & footwear & 34% who have bought books.
  • Mobile Commerce Users are savvy shoppers & use their smart phones to check product prices (84%). Other popular activities are to locate a store (65%), research product features (57%), find deals (55%), check product availability (48%).
AG: Can you tell us about the other innovations in mind that can enhance and enrich the user experience and perspective?
KV: We are continuously enhancing the eBay shopping experience to make it easier for consumers to find, buy & pay for products online. An example is the eBay Deals Hub which has a handy product finder where you can choose your deal from categories, brands, product lines or price points of your choice.
We have also created product based experiences which allow you to make easy comparisons amongst popular gadgets. For eg. View the iPhone experience here & here. This shows you both the various models of the iPhone as well as comparison with popular smart phones you may like to add in your consideration set. You could also read expert reviews, tell us if you want it or have it etc.  
AG: Give us two key changes that you see in 2012 over the last five years. Where do you see the trajectory going in the next 5 years? What are the current trends?
KV: The concept of eCommerce has evolved over the past decade to cover transactions over the web, the mobile, the phone and even television. Online shopping is growing in popularity, as consumers realize the convenience of shopping & transacting online as well as the ability to get great deals and access huge variety. 
Two major changes that we have observed in our 7 years of existence is the willingness of consumers to buy big ticket items with a single click. They trust the online medium a lot more than what they were 7 years ago.  
Another change would be on the industry front which was the penetration of broadband internet & 3G. It is very likely that a majority of the next 100 million internet users in India, will have their first and pre-dominant experience of internet on mobile devices, either smart phones or tablets. Our key focus around mobiles in 2012 is to get greater penetration of eBay India apps (iOS, Windows, Nokia and Android) and encourage people to use this as a device to check prices before shopping offline, thereby reach for your phone before you reach for your wallet. So the idea is to create an entire generation of smarter shoppers.
Over the next 5 years, we foresee the number of Indian internet users to shoot up by over 50%, doubling the number of online shoppers in the country. As eCommerce industry in India is poised at growing at a much faster pace than expected, here are some key trends that are being witnessed presently:  
Social Media leads to Social Commerce: Offline shopping tends to be a social phenomenon and this will catch up with online shopping as well. We foresee online shopping getting integrated with social media as more and more enthusiasts will start seeking opinions before they indulge and seek compliments post indulgence. This could take the form of deeper & richer integration of social tools in the online shopping experience as well as see eCommerce players leveraging the social graph to add engaging ways to enable users to talk & share about shopping on various social media channels. Industry reports state that 25% of time spent online is on social platforms, dominated by Facebook.  Out of this, 50 million are on Facebook and 13 million on Twitter, taking the size of the social media universe to 63 million. A report by Nielsen stated that 13 million Indians check online reviews out of which 6 million are through social media sites. eBay India has a significant presence on Facebook with more than 1.9 million fans.
Indian Fashionistas hit online malls: Indian fashionistas are discovering that shopping online is as much fun and saves them time and money while also ensuring access to a wide range of unique inventory. Sitting in their home or office or even while on the move, women are shopping for the best of international labels and a variety of lifestyle products whether fashion, fragrances, home décor or even fitness equipment. The eBay Census documented that over 45% of all purchases are in the lifestyle category when you look at all eCommerce purchases – both domestic & imports. We see as much as 30-35% of online shoppers in 2012 being women. 
Tier II & III cities (Bharat) and Rural catching up fast: For the many Indians located outside the few cities where modern retail has penetrated, online shopping provides access to brands & products which are not available in their city or town, bridging distribution inefficiencies. Non metro consumers increasingly aspire to consume brands and lifestyle products. They have the spending power, but no access. We see these aspiring consumers from smaller cities latching onto online shopping like never before. eBay Census highlighted that Bharat contributed about 40% of transactions & Rural India contributed to 9% of transactions on eBay India.
Brands set their sights on online stores: Canny marketers follow their customers. As an estimated 100 million Indians spend their time online consuming content, communicating and even indulging in commerce, brands are setting up online storefronts to cater to this demand. From a dedicated storefront on eCommerce websites, to special promotions and standalone eCommerce enabled websites, brands are going to come online in a big way & invest in servicing this distributed but significant customer base. 
The upsurge of Mobile Assisted Commerce: Another, big impetus to eCommerce in India is Mobile Commerce. eBay Inc clocked in revenues of US$ 5 billion globally from Mobile Commerce in 2011 and expects to hit the US$ 10 billion mark in 2012. Over 65 million consumers across the globe use eBay applications on various platforms such as smart phones and the tablets. Presently Mobile Assisted Commerce has picked up significantly in India and is expected to grow in the country. Mobile Assisted commerce enables consumers to check prices online using mobile applications and making purchases after comparing prices. The advent of 3G services in India along with low cost smart phone handsets are significantly contributing to internet usage on mobile phones along with cheaper mobile data plans. As the consumption basket is becoming dearer with the fall of rupee, consumers are increasingly seeking the best prices & value for their spends. However, it is inconvenient from all practical purposes to survey all physical stores to find the best bargain. The growth in high speed mobile-internet penetration will encourage consumers to consider browsing for price benefits on online retailing sites before making offline purchase decisions. So expect to see savvy consumers check their phone, before they buy even at a retail store.

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