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Pricing a major challenge in e-commerce - experts
21
May '13
Pricing has become a major challenge for e-commerce companies, with the companies unable to arrive at the right price line for their products and services, said e-commerce experts who spoke at Evolve, a two day summit on retail and e-commerce organized by Sir M Visvesaraya Institute of Management Studies and Research (SVIMS), a leading Mumbai-based business school, that concluded here on May 17.
 
Mr. Jerry Rao, e-commerce expert and Chairman, Value and Budget Housing Corporation, said, pricing is currently a major challenge in e-commerce.  The e-commerce companies charge any rate today for their services, which may be too low or too high. 
 
According to Mr Rao, there needs to be more research and studies conducted to arrive at a standard pricing mechanism for different kinds of e-commerce products and services. “Should an e-commerce arm of a retail company sell its products at lesser rate compared to products sold out of its physical outlets is still a dilemma. The retailer could pass on the benefits he saves on rentals, staff and AC, to his e-commerce customers. However, this could also have a demoralizing impact on its retail employees. Similarly, how much a telecom company should charge its customer for using specialized calls like knowing Rahukalam or astrology  is still unclear. Should it be one rupee, five rupees or ten rupees.” 
 
According to Mr Jerry Rao with the advancement of technology, availability of real time data will enable services with time-bound requirement of a five Star hotel or an airline to fill the unoccupied suits or business class seats through innovative concepts like last moment auctions, targeting the right customer profile. This technology to predict consumer interest is gradually moving into physical retail space. Iris screening technologies are being used to study the time spent by a particular consumer at various spaces of the super market, time spent in searching spots of her interest, products her interest, which could be utilized by companies for prediction of her interests and engagement with her of. 
 
According to the Internet and Mobile Association of India, the e-commerce market in the country expanded from Rs.8,146 crore in 2007 to Rs.45,000 crore in 2011.  
In 2011, Indian retail market was about $470 billion and is expected to touch $675 billion by 2016. By 2020, the traditional and organized retail industry industry is expected to touch $ 1.3 trillion. 
 
Dr BR Manjunath, Director General, SVIMS said the companies need to invest a fair share of time and resources to study understanding the customers preferences, as customization of products and services has become too critical today.  
 
 


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