Comparison of Courier Companies in India

As a company with an ecommerce front end, we work with various partners and one important partner is the courier company. We have worked with various courier companies and just wanted to share some findings. Obviously, which courier company is the best is a subject of debate and may vary based on location, price flexibility, quality of service requirements and so on.

A quick snapshot based on our experience :

We send a lot of things to remote parts of the country and India Post has by far the best reach. The price is also reasonable. However, unlike other courier companies, they dont really do doorstep delivery - this may be because Postmen in India have cycles and the traditional idea was probably to delivery letters not packages. Whatever be the reason, this is kind of non-negotiable in Ecommerce. You cannot expect customers to come to the Post office to collect their packages, unless they are in really far flung areas.

We have had a good relationship with First Flight. They are extremely competitive in two areas - Accessible and ready to get your business. Every Ecommerce business is a customer who will give them consistent revenue - They seem to understand that. The price is pretty good too. However, the deliveries are not as consistent as we expected them to be- Even 5% non-deliveries or late deliveries can kill your ecommerce business and this is one area that needs to be improved.

Bluedart in our experience has been extremely consistent-yes, consistent is the word. When you do a ecommerce business, it is important for you to guarantee delivery at a particular date - it may be 3 days it may 7 days, but you should be able to set expectations to the customer and Blue dart is fairly consistent. If it has to go to location x, it will take Y days and most of the time, it works like that. Price is slightly on the higher side but then sometimes you are ready to pay a premium for a service well done.

We also worked a bit with Fedex. Though service quality is excellent, they still have a lot of differential pricing which is difficult to understand - Too much variable pricing or location based variables results it practical difficulties for ecommerce companies. You want to predict with good accuracy your logistics cost - it should not be a surprise.

Conclusion : Regardless of the type of business, I guess it makes sense to choose more than one and negotiate for price and flexibility over a period of time. Also, it will be great if the courier companies start thinking of Ecommerce companies as customers :) - Its a great revenue stream and we are ready to give consistent revenue to the ones who give us good value for our money. Help us when we are small and we will be loyal as we grow bigger, I guess. Afterall, Courier companies will probably be the biggest winners in Ecommerce

KraftInn Showcase at NEDFI Guwahati

We recently attended the NEDFI exhibiition in Guwahati and showcased some of our products. Here are some pictures :

Fig 1: Contemporary Floor Lamp (Large) : http://www.kraftinn.com/contemporary-floor-lamp

Fig 2: Hofura Yellow Lamp : http://www.kraftinn.com/lamps/table-lamps/hofura-yellow-table-lamp

Fig 3: Zeng Lamp : http://www.kraftinn.com/lamps/table-lamps/zeng-lamp

Top Ecommerce Websites in India

A quick reckoner for top Ecommerce Websites in India (not in any particular order)

General

Flipkart.com
Yebhi.com
Myntra.com
Jabong.com
HomeShop18.com
Indiatimes.com
Rediff.com
FutureBazaar.com
FashionAndYou.com
Fetise.com

MarketPlaces

Ebay.in
Snapdeal.com
Amazon.in
ShopClues.com
CraftsVilla.com

Aggregators

Naaptol.com
Junglee.com

Apparel/Fashion

Zovi.com
Freecultr.com
DonebyNone.com
Yepme.com
Zivame.com
Cilory.com
BagsKart.com
StiffCollar.com
BasicsLife.in
Bewakoof.com
Bluegape.com

Jewellery

juvalia.in
Caratlane.com
Bluestone.com
JewelsKart.com

Accessories

Lenskart.com
WatchKart.com

Health

HealthKart.com
Goodlife.com
NaturalMantra.com

Grocery

Bigbasket.com
Zopnow.com

Sports Goods

Playgroundonline.com
Sports365.in


HomeDecor

Zansaar.com
Fabfurnish.com
Urbanladder.com
KraftInn.com
HeavenandHome.com
BedBathandMore.com

Niche

Engrave.in

Baby Products

FirstCry.com
Babyone.com
Hushbabies.com

Ecommerce/Payments

Zepo.in
Martjack.com
Ebs.in
CCAvenue.com
BuildaBazaar.com
PayU.in

Inventory vs MarketPlace

'Inventory or Marketplace ?', this is one of the pertinent questions of our times in the context of ecommerce. While the inventory model means that the ecommerce site has to carry inventory of all products it sells, the marketplace model requires the ecommerce site to act as a exchange platform between buyers and sellers and it charges a commission. The upside of a inventory model is faster delivery times and a consistent customer experience while this also means higher inventory and supply chain costs. The marketplace model shift most of the inventory risks and costs to the sellers but it becomes a continuous challenge to manage seller and buyer expectation in a consistent and fair manner.

Though both models look like chalk and cheese, it is important to remember that that the basics are the same from a business model perspective :

1) Efficient Inventory Management - For a great customer experience, having just the right amount of inventory is very important. Nothing is as annoying as telling a customer after two weeks that his or her order cannot be serviced. For websites that carry inventory, this means 'sell what you have' while for marketplaces, it is manage sellers to create a structure where sellers who manage their inventory well are incentivised (this can be done using feedback systems)

2) Efficient Delivery - Getting orders delivered in reasonable time is important for ecommerce. While for inventory based models, this is about managing inventory efficiently, for marketplaces, this is about not overdoing checkpoints and reducing unnecessary logistics costs.

3) Customer Management - Though customer service is paramount, it is worthwhile to remember that there are segments of customers that are still not ready for Ecommerce. 

At KraftInn, we have had some experience in both models - We use the inventory model for our website -www.kraftinn.com while we participate in the marketplace model in marketplaces like Ebay as a seller.

As a seller, we feel it is important to get the right balance between seller satisfaction and customer satisfaction and there are certain things that marketplaces should not do. Here is a small list :

  There are three key stakeholders in a marketplace model and it is important to get the right balance between the three.

 No matter whether its the inventory model or the marketplace model, the ecommerce space is hyper competitive and the ones which get the right mix are the ones that will work. We are a very small player and this is just the beginning of an exciting journey :) 

Customer Segmentation

It's always interesting to analyse your customers. Though there is direct relation between a website's traffic and actual customers, it often throws up results that are quite different from web traffic analysis.

Here are some interesting things we found out(based on last 3 months data) :

1)  67% of our customers are male - Our website traffic indicates that the male:female ratio is almost 50:50 so this may mean two things :
      - Men are more likely to purchase things online
      - In many cases where women make a purchase, the men make the payments.

   Not sure which one is true, but I am sure this statistic has also to do with the fact that we dont do cash on delivery.

2) More than 50% of our customers are from Mumbai, Delhi and Bangalore. I guess this means people in large cities are much more comfortable purchasing online (especially if no COD is involved) and if it is a small niche website like ours.

3) Our top 3 products indicate that there is a curious mix of pricing, value, images of products that make certain products much more appealing. We have some excellent products that look great - touch and feel wise but somehow they get lost in the online world. Another observation is though people look at creative items more, it is usually the simpler items that people tend to buy.

Image : kraftinn.com statistics Source : www.kraftinn.com

Amazon.in

That it would happen was never in doubt, the question was when and how. With the indian government dilly dallying in whether to allow FDI in retail ecommerce (its another story that most of the investment has been FDI anyway considering most ecommerce websites are founded by foreign VCs), Amazon finally seemed to reconcile to the idea of launching as a marketplace instead of an inventory driven store. Like Junglee, it has been a soft launch without too much brouhaha. They intend to start with books, DVDs and TV shows from what we hear.

As you would imagine, they have got most things right from the very beginning :

1) Selling vs fulfillment - Interesting they do both while most other indian marketplaces tend to stick to one. There are some vendors like us who like to do the fulfillment (cost effective both for us and customer) as our stuff is pretty large compared to others and cost of goods,storage and returns are pretty high. However, I am sure there are lots of vendors who would like to pass on the fulfillment part to Amazon especially in categories like books where the size, cost and logistics form a smaller part of price compared to the content or marketing. Looking at the options, both look pretty simple and easy to understand, exactly the way one would imagine. This seems to be a global best practice for them but nonetheless, bringing it to India is important.

2) Pricing - Pricing is extremely simple or so it seems - No listing fees and interestingly, the closure fee and the commissions) seem reasonable

3) Feedback and Guarantee Program - This is pretty lousy in most marketplaces and only Ebay does this well. Amazon will surely bring best practices here from around the world.

4) Goodies for Sellers - The fulfillment prices seem to be very good and this may be a promotional thing for the time being but many vendors will like this.

Overall, it seems like an amazing platform for Manufacturers and Sellers and we can't wait to get onboarded :)

Ecommerce Trends

There are various trends that are in vogue currently and as a very small company, it becomes very important to us in being extremely picky when it comes to prioritizing what we want to do. Here are some trends we are looking at very closely :

1) Videos : It is widely accepted that videos play an important role when it comes to search engine optimization. They are crawled and indexed easily though we have not been able to determine how it affects the number of queries. Creating a compelling video is hard work - no video is better than a patchy video. Videos also take significant bandwidth which means two things - 1) higher storage costs and 2) requires a good connection for the end user - it is possible that you may have a wonderful video and 90% of your customer base can't get your page to load properly because they have a slow connection. Our experience with video has been very mixed. There is no significant increase or decrease in product conversions due to videos. So we are taking it a bit slow when it comes to video - about 10% of our products have videos.

2) Mobile : Do we need a iPad add ? Do we need a iPhone or Android app? The answer at this moment for us is no. This is basically because there seems to be a lot of reluctance in india to use credit cards online so extending that, we believe that using them on a mobile app will be a bit more complicated - also payment gateway integration may not be seamless. The app strategy may be good in case of COD, but since we dont do COD, it looks like a lot of investment without returns at this point. Also with HTML5 and other things on the horizon, we believe the app thing may be a pasing fancy and a singular web based UI across device will start taking precedence in the future.

3) Google : Though we dont have a lot of insight into how Google works, it seems with the recent updates, Original content is becoming more and more important and the number of links especially bought links are kind of becoming less valuable. So, we have kind of stopped doing too much SEO jugglery and just put up good content when we have a new product. Traffic wise, our strategy hasnt worked very well, but at the moment we dont know of ingenous ways to build links and traffic from emails etc havent been very productive for us.

4) Social : Pinterest is not working for us in India - we get some repins etc from primarily US users, but dont seem people care much about pinterest much. Twitter brings in lot of instant traffic but cant seem to connect any conversions to twitter. We havent done much with linkedIn.Facebook is where we spend most of our social time. Our audience engagement has been pretty good and people usually respond well to smart and funny posts, pictures - e.g animals have good engagement. Our average is one post a day and anything more than two usually causes engagement rates to go down drastically. Social is great for brand building but from conversion perspective, it seems a bit overrated at this point. We may be wrong, but that has been our experience though getting accurate conversion data from facebook is very difficult.

5) Advertisement - We have an absolutely tiny budget for ads. The ROI is pretty poor but what you gotta do you gotta do. We do a little bit of google ads - only search and video, no banners. The conversion cost are very high and then some of them drop off during the payment. Video is primarily for branding - not sure if it is working - difficult to track. In Facebook, we primarily page post ads and spend about Rs 6-7 per like - Its not too bad but again it is more of a branding thing.

Hmm. Well thats all for today. If you have any ideas, do leave us some comments. Thanks for reading

Why we don't do cash on delivery

Cash on Delivery is one of the most common ways for ecommerce delivery and we know customers love it. We would love to have Cash on Delivery as one of our options for payment but we can't unfortunately because of the following reasons :

1) Increase in Prices : Cash on Delivery requires our delivery partners to go collect cash or card during delivery. This requires them to equip their delivery men with swiping machines and additional logistics for collecting cash and transferring back. Also, sometimes multiple trips are required to collect cash. Because of this, they charge 50-200 Rupees extra per package. This will translate into our products becoming costlier to the customer by 10%-20%. Currently we offer free shipping and it wont be possible to do that in case of COD.

2) Delivery rates : We have a proud record of 100% deliveries. In case of COD, based on trial data, delivery rates are sometimes poor which means wrong address and identity issues. This is unfortunately not sustainable for us as we are a small company and anything less than 100% deliveries will mean we wont be able to pay our employees on time.

3) Location availability : Currently a lot of our customers are from small towns in India. Most courier companies support only a limited set of Pin codes when it comes to cash on delivery.

4) Size of items : Our items are very large in size when packaged - typically between 3 - 10 kgs in terms of volume(not weight). This typically means that we plan for quick and reduced delivery times which is always not possible in case of cash on delivery.

5) Sustainability : As a small company, one of our primary goals is to make sure our employees, artisans get their salaries on time. Cash on delivery as a mechanism is a slow cash flow function which is difficult for us to sustain.

We know Cash on Delivery is one thing that our customers ask for all the time and at some point in time, we may reconsider our ability to provide COD. However, till then, we would like our customers to trust us with traditional modes of payment. We also have a store at Ebay which follows a strong customer feedback mechanism : Do check our feedback at http://stores.ebay.in/kraftinn

Thank you for all the love and trust