The Power of Tier-2, and Tier-3 locations in India

If you are even remotely interested in the progress of Retail and Ecommerce in India, you are surely aware of how large an impetus our Tier-2, and Tier-3 cities and towns can provide. In our experience, the basic factors which create an impact in consumer behaviour in these locations are:

  • Penetration of mobile technology, and hardware thus creating easy access to the Internet.
  • Availability of cash to make purchases, and the existing desire created by other media.
  • Lack of easy availability of material for purchase.
  • Lack of steady internet connections, and thus dependence on Cyber Cafes for making purchases.

Read through the slides below to know more about these trends as we discovered from our study.

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Welcome to the world of Socialonomics! (Part 2)

My last post on this topic was to bring to you some of the astounding statistics around social networking. Hope it did surprise you to some extent. Lets delve a little more into the world of socialonomics (I didn’t coin the word). Some of the important things to note are:

  • how human beings get influenced in terms of their buying decisions, and
  • what retailers are doing about it.

Of course, all this in relation to social networking.

Gartner says that blogging has reached its plateau of productivity. I think not. Personal, and let-me-tell-my-story type of blogging might have, but otherwise blogging remains and will be as vibrant as it always was. It surely has changed form and shape, and purpose. Corporate blogging is getting more and more prominent, whether it is inside the enterprise or meant for external folk (as in vendors and customers). Blogs also contain shorter posts these days than earlier – something akin to Twits. But, it might not always be possible to convey an idea or a sales message in the limited text that you can tap into Twitter.

Check out on facebook, the number of retailers who have created groups or fanclubs. I am a Johnston Murphy fan and am on their page. So, JM sends out new product launch updates, news about trial runs (which I, as a customer, could participate in) and get significant discounts. JM is not the only retailer that does this. This brings in the second important point – whether people believe in advertising or word of mouth. Certainly the latter, and a fan club where everyone is essentially patting the Retailer on the back works wonders. Many retailers have yet to figure how to get into the social networking bandwagon. The way social networks have expanded, and for the power they hold Retailers better get on for the ride if they want to grow and reach out to many of their customers who they never manage to touch otherwise.

Having said that, there are other people who retail (maybe through distribution channels as well) and pick up a social cause and make a mess out of it. Aircel (telco) in India launched its ‘save the tiger’ program mentioning the 1411 of the tigers that are still left in the country. Besides advertising on television, on the web and on facebook, they have made no apparent contribution to the cause besides asking people to be aware. This could only lead to dwindling of credibility for just toying so expediently with a social and important cause.

Welcome to the world of Socialonomics! (Part 1)

Gartner, in its September 2009 Hype Cycle for e-commerce mentions that blogging has reached the plateau of productivity. Social networking is just a fad for the young, and frivolous in nature. Porn is the only thing that really sells on the web.

Did you say you agreed to any or all of those statements? Think again! Check the factoids that you might want to hear:

Social Networking is critical for Retail - logos of blogspot, youtube, twitter, facebook, star, linkedin and toostep

Social Networking is critical for Retail

  • Social media has overtaken porn as #1 activity on the web. And porn as an industry (on the web) did not do that well in 2009.
  • 1 of 8 couples married in the US last year, met via social media
  • More people follow Ashton Kutcher and Ellen Degeneres than the combined population of Ireland, Norway and Panama
  • Over 200mn blogs, 54% bloggers post or tweet daily. 78% people prefer peer recommendations, than search engine results. Only 14% trust advertisements (including commercials on the telly). Most trust word of mouth!
  • 96% of Gen Y (who have internet access) use social media of some sort or the other.
    Facebook reached 100mn users in 9 months. If it were a country, it would be the 4th largest, though China’s Q-zone is larger.
  • Ipod app downloads hit 1bn in 9 months.
  • 80% of twitter usage is on mobile devices. Youtube is the 2nd largest search engine in the world.
  • 34% post opinions about products and brands35% book sales in the US are already on Kindle.
  • News is now pushed, to you. Same is about to happen to products, and brands. >1.5Mn pieces of content are shared of Facebook, daily!
Slide 4

—Social media has overtaken porn as #1 activity on the web
—1 of 8 couples married in the US last year, met via social media
—More people follow Ashton Kutcher and Ellen Degeneres than the combined population of Ireland, Norway and Panama
—Over 200mn blogs, 54% bloggers post or tweet daily. 78% people prefer peer recommendations, than search engine results. Only 14% trust advertisements
—70% of 18-34 year olds have watched TV on the web. 25% Americans said they watched a short video in the past month, on phone.

Waitin for “M”

M-Commerce really has been a long time coming, just that it really has not arrived yet. I used to have m-check from Airtel on my phone earlier (doesn’t work on my new phone), have ngpay now, but have not used it yet. Newspapers have been carrying items about M-commerce and how it will be the biggest thing since the internet (or sliced bread if you please).

Gartner Hype Cycle showing different technologies

Doing a quick search on the web, I found many articles but on the first page there was an article in Express Computers from as long back as 2003. Ericsson talked about it in 2007 on their web site and Economic Times had an article earlier today. And technology consulting companies have been talking about M-commerce really taking shape in the next few years.

So, why does this thing not really take off? Gartner’s 2009 Hype cycle (image copyright Gartner 2009) might hold part of the answer. The hype cycle shows that M-Commerce has gone off the situation of inflated expectations and now is climbing up the ‘Slope of Elightenment’. The real reason has got to have to do with the mobile services available and the operators. 3G is yet to be widespread. The cell networks still have to become reliable enough in terms of stability or speed, and of course there is no saying about security or the lack thereof.

Codeshare between full service, and low cost

Many of you have spent considerable amount of your work-life, or otherwise traveling between cities. Over time, you have noticed the advent of bucket shops not only in brick and mortar format, but also on the web. You also have seen the advent of all the travel portals in India. While all this has been happening commercial aviation in India has also moved a distance with two carriers getting acquired by two other full service carriers.

Deccan became Kingfisher Red, and more or less kept its older model, though there are seat numbers allotted, and there is food served during the flight.  Sahara became Jetlite (reminds me somehow of yogurt, but that is a different story), but Jet opened up Jet Konnect as well.  Both in Jetlite as well as in aJet Konnect flight, you will need to purchase food (or bring your own).

jetlite schedule

Jetlite schedule showing 1750 flight, for 11th March 2010(click to see larger image)

My post today is however, about pricing and the way code-shares seem to happen in India. I know of at least one particular flight, because I have flown at least twice on that. This is 1750 service between Delhi and Bangalore, operated by Jetlite as S2  233. This is code shared by Jet Airways too as 9W 7075. Jetlite, on their web site, charges Rs 5379 as the lowest fare. Jetcharges Rs 5529, on their web site for the same fare. And

jet airways fare

Jet Airways schedule showing 1750 flight, for 11th March 2010(click to see larger image)

Cleartrip charges Rs 5470.

I understand the last one.  But, how do the first two fares work?

  • Jetlite is a Jet Airways subsidiary (or not?), and one would expect ticket pricing to be the same.
  • How does a company do a code share between a full-service airline and a low-cost carrier? Are these not two completely different product offerings for the market with different levels of service? If you flew Jet Airways (on one of their regular flights, you would not have to buy food), and if you held status on their JP program, you could go sit in the lounge as well. Jetlite passengers don’t get to use the lounge
Clear trip price

Clear trip schedule showing 1750 flight, for March 11 2010 (click to see larger image)

regardless of their JP status, and they also need to buy food on the plane (if they want that food). Is this a fair trade practice?

  • The Jet Airways price, on their web site, is higher than even the price offered by Cleartrip.

PS: I have cropped and rejoined some of the pictures to show the particular flight, and make the images fit. Images (and data) are have been extracted from the web sites, and are owned by Jet Airways, Jetlite and Cleartrip respectively.

Waiting for “M”

M-Commerce really has been a long time coming, just that it really has not arrived yet. I used to have m-check from Airtel on my phone earlier (doesn’t work on my new phone), have ngpay now, but have not used it yet. Newspapers have been carrying items about M-commerce and how it will be the biggest thing since the internet (or sliced bread if you please).

Doing a quick search on the web, I found many articles but on the first page there was an article in Express Computers from as long back as 2003. Ericsson talked about it in 2007 on their web site and Economic Times had an article earlier today. And technology consulting companies have been talking about M-commerce really taking shape in the next few years.

So, why does this thing not really take off? Gartner’s 2009 Hype cycle (image copyright Gartner 2009) might hold part of the answer. The hype cycle shows that M-Commerce has gone off the situation of inflated expectations and now is climbing up the ‘Slope of Elightenment’. The real reason has got to have to do with the mobile services available and the operators. 3G is yet to be widespread. The cell networks still have to become reliable enough in terms of stability or speed, and of course there is no saying about security or the lack thereof.