Interview with Praveen Sinha

Praveen Sinha
Praveen Sinha
Founder and MD

Now, when more and more people are moving online for variety and novelty, how do you see the future of Indian e-commerce market?

The biggest advantage that e-commerce entails today is that it has a lot of variety to offer to the consumer as compared to a physical store, since it does not have the constraints of physical space. It is a configuration of many brands at affordable rates which helps youth aspiration. For example, Mango stores cannot be found everywhere, but it is easy to purchase its products online through the online retailers. So, more and more people are adopting the online option for shopping. Other than this, e-commerce has many advantages at places where the offline stores lack though it does not help with the touch and feel factor. But many innovations are taking place to eliminate these limitations.

Despite the growing craze for internet shopping in India, not many e-commerce companies are profit making. What do you suppose is the reason? And what is the solution to this?

As a model, e-commerce is not new to the world. You might have seen the e-commerce companies in USA or China becoming profitable. But in India, it might take a few more years for the e-commerce companies to turn profitable. This process can become faster if the industry concentrates on discounts and brand building. There is no right or wrong strategy for profitability as such, but this might increase the overall returns.

Small towns are the biggest customers of online retailers, may be, because they don't have a lot of access to big shopping malls and exclusive brand stores. What have you got to say in this regards?

I don't completely agree, though almost 50 percent of the demand for our products comes from such small towns and cities. This is because small towns and cities face internet connection problems very often. Besides, logistic partners do not provide good service level, and even if they do, it won't be for fashion products. All such factors make an e-commerce product more expensive as compared to the physical stores. If you see from an analytics point of view, accessibility is limiting the growth of e-commerce in such regions.

Can you talk a bit about mobile users?

Today, when smart phones can be availed at a price point of Rs. 4000 or Rs. 6000, mobile phones are becoming very relevant in the e-commerce industry. A few years back only five percent of the total online buyers used to purchase through mobile phones. But today, this figure has crossed 30 percent. On the basis of such a growth, we can say that the use of mobile phones for online shopping is being validated by the market. The only challenges that a mobile user faces compared to a computer user is the screen size and the speed of connectivity. For the same, there are specialized mobile apps that serve as customized websites for mobile users which enable them to access the site better through a mobile phone across various platforms like android, etc.

When shopping is online, the time spent is much less than that spent in a shop where touch and feel factor is counted. Do you agree? Can you explain a bit on this line?

I have a mixed view there. In case of online shopping, one is bound to get carried away with the number of choices. They have more options, and so start spending more time on just one platform. They don't have to walk to another store to look for more brands. People spend time on e-commerce stores whenever they are free and even if are not very keen on purchasing an item. So, the overall time spent on e-shops is more. But in a specific context, it is true that it takes more time to try out a piece of clothing, and so it takes more time to purchase a product offline as compared to online.

More investments mean more profit. Do you agree?

That is a tricky question, I would say. Investments are done with a specific purpose, for example brand building. Investments are done with the intention that it will later on bear fruits, though it may not immediately result in profit. Today, investments are not done to increase profit, but to increase the acceptance of e-commerce in the country. E-commerce offer more discounts to the consumers with the aim that they may later on buy products from the company.
Published on: 20/10/2014

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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