PG Tees and E-Commerce in India

I happen to be a Certified Pagal on Pagalguy.com - India's largest MBA Forum with close to sixty thousand registered members. Pagalguy.com came out with it's T-Shirts recently, members could buy the PG Tees by making online payment (people who lived close enough to the PG HQ could get their tees in person). The Tees were a huge hit and close to a hundred vanished within hours. This idea of this post is not to celebrate the success of PG tees; it is to highlight the growing popularity of E-Commerce in India.

After the bubble burst in the early 2000s, many analysts had written off the fancy term called "E-Commerce" but now things are changing and E-Commerce is gaining in popularity. It will gain momentum as connectivity improves and the credit card culture spreads. On both counts, we seem to have reached the take-off stage. More and more Indians are finding online shopping a great convenience. They are buying airline and railway tickets, books, home appliances, electronic gadgets, movie tickets and more stuff by logging on to a Web site, than driving up to a store.

Consumers are becoming increasingly comfortable with transacting online, mainly due to better (perceived) security features being used by the Banks. I purchased my PG Tees through ICICI Bank online money transfer and I was satisfied by the authentication checks being employed by the Bank. Despite all this, one of the biggest roadblocks for portals trying to grow B2C e-commerce in India is still the payment system. Lot of people I know would like to buy things online but they are still scared of using their credit cards, the best option for such users is COD (Cash on Delivery), but it has a lot of problems. Very few courier companies in the country are willing to provide COD (those who do it charge a hefty premium). COD takes the cost of delivery up by 10-15% but, more importantly, it takes an average of three months for the cash to get back. That is why portals like Pagalguy.com encourage payment methods like credit cards and online banking.

The future of e-commerce in India will depend on how successful we are in upgrading infrastructure and connectivity - both of which seem to be improving very fast thanks to cheaper computers and introduction of Broadband in most cities. Also important will be the presence of a legal framework for resolving disputes (The IT Act 2000 needs to be revised). The credit card companies should do their bit by encouraging people to use their cards online - they must prove that their security is unbreakable by throwing open challenges to the hacker community. They can also look at the option of insurance against credit card information thefts like some of their western counterparts.

Hopefully E-Commerce will really take-off now.