After eCommerce & mCommerce, nCommerce may become the 'Next Big Thing'

In recent years, e-commerce has taken the world by storm, changing the way we shopped, forever. Its newer avatar, m-commerce, has further accelerated the pace of growth in this segment, considering smartphone penetration itself is at an all time high.

The situation is no different in India where out of a total population of roughly 1.2 billion, 900 million already have a mobile subscription. However, only 110-120 million of them own a smartphone. But herein lies the potential of m-commerce because smartphone penetration in India has witnessed exponential growth in the last couple of years and the trend is only getting better with time.

With e-commerce and m-commerce, the world suddenly opened up for both – buyers and sellers. Geographical boundaries ceased to exist and we had access to the best of products and brands from across the world, that too from the convenience of our homes.

Similarly, sellers who started leveraging these platforms saw their fortunes change as business went up multifold; more than they would have ever imagined otherwise. They couldn’t ask for anything better, but this is just one part of the story.

Now look at the other side of the coin, while the e-commerce and m-commerce revolution was in full force, the local markets in the neighborhood had to bear the brunt because they were losing business rapidly to online markets. They felt helpless and were left wondering how to sustain themselves in this situation.

While market players like PepperTap, Grofers and Localbanya have already identified and set foot into this market space, albeit only in the grocery segment, they have generated enough traction to draw the interest of investors, with all three having received substantial investment to consolidate the businesses further. That is proof enough of the potential that n-commerce offers.It essentially plans to tap into the offline retail market in India, currently estimated at roughly $340 billion.

Localbanya, a Mumbai based online grocery store, raised an undisclosed amount in its third round of funding from Shrem Strategies in March 2015. Its biggest competitor in Mumbai Bigbasket, which raised $10 million from Ascent Capital way back in 2012, managed to raise another round of funds earlier this year from Singapore based LionRock capital. Moreover, in 2015 itself, PepperTap, a Gurgaon based mobile platform for grocery delivery received an undisclosed amount of seed funding from Sequoia Capital.

This is a good business model.

BUT, here is my question - why not bring in the concept of frugal innovation here? (Of which, I am a huge believer). Why depend on human intervention aka middlemen when technology can deliver? Why have a business model that is capex heavy? Why can’t technology empower ALL the stakeholders in the system?

So, while e-commerce and m-commerce were all about having the world at your feet, they failed to tap the small and sundry players in the local neighborhoods, such as grocery stores, dry cleaners, electricians, tailors, vegetable and fruit vendors, chemists, photocopiers,watch repair shops, car mechanics…the list is endless.

How convenient would it be if other than ordering our favorite gadgets and dresses online, we could tap technology, smartphones in particular (simply due to their easy access), to do these small, yet inconvenient and time consuming chores, and make our lives easier. These chores can feel like a complete waste of time and often we end up procrastinating these menial, but important chores simply because we feel ‘too lazy’ to step out of the comfort of our homes. And what about the carbon footprint we leave, if for every little chore a member of the family will take the car out!! Every single day… Do the math here…

Come to think of it, it’s not an impossible task, now that the basic platform is already available in the form of e-commerce and m-commerce. It’s all about tapping this space and taking it to the other end of the spectrum; think ‘neighborhood’, not ‘hyper-local’.

It would simply require integrating all possible service providers in the local neighborhoods onto the available platforms and enabling customers to get instant access to the ones in their vicinity, when the need arises. So whether you want to order milk, vegetables, grocery, stationery, or get your laptop repaired, laundry dry cleaned, suit altered or microwave repaired, you can accomplish it all with a simple tap on your phone. I guess we can call it ‘n-commerce’ (Neighborhood Commerce). Just apt…

Not only will it make lives easy for customers, it will offer a host of benefits to the local service providers. The obvious gain would be in terms of business volumes seeing a huge surge owing to regular orders from the vicinity, making these businesses a sustainable source of income for the sellers.

Another significant benefit would be that n-commerce would compel these otherwise ignorant players to start keeping stock of things and organise themselves better. Inventory tracking and management will improve, which will help them reduce costs by minimising any dead stock.

Moreover, data analytics would help analyse the trends – customer-wise, product-wise, and season-wise – and then stocking goods accordingly. There’ll be lesser chances of turning away and eventually losing a customer because everytime he/she orders, the seller “Doesn’t have the ‘Pepsi’ or ‘Ponds moisturiser’ in stock.” Above all, they will no longer feel left out of the online race.

The focus will shift to managing costs and improving services with n-commerce driving up competition in the local markets. It’ll be a win-win situation for both, customers as well as sellers.

Going by these recent developments, n-commerce is likely to be the ‘next big thing’ that will disrupt not just the e-commerce and m-commerce market, but also the franchise model in India, and set the cash registers ringing.

The writer of this article is Vikram Upadhyaya. He is the Chief Mentor and Accelerator Evangelist at GHV Accelerator. He is also the Founding Board Member of the Indian Angel Network Incubator and an advisor to projects being undertaken through the Telecom Centres of Excellence (TCOE). The views expressed here are personal.

For More Details - http://www.ghvaccelerator.com/

Source : EntrepreneurIndia. 

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Parameters overseas investors consider before investing in India

There is a constant buzz about India having become a hotbed for overseas investors, more so, since the BJP-led government took over the reins of the country in 2014. Add to it the fact that the ‘startup culture’ is at an all time high in the country with more students and corporate professionals jumping onto the entrepreneurship bandwagon than ever before. Given the scenario, there is little reason why investors wouldn’t be all wide-eyed, considering the number of unique and innovative business ideas springing up from across the length and breadth of the country; each of which offers them an opportunity to grow their money multifold. Also, diving into the Indian market gives the investors access to the burgeoning class of Indian Consumers, thereby creating deeper inroads for expansion.

But what is it that lures investors, overseas investors in particular, to put their money in a particular venture? In today’s article, I’ll decode the criteria that investors evaluate before finally taking the leap of faith and putting not only their money, but also time and experience, that will give the businesses the much-needed opportunity for a global footprint.

Image Credits : Shutterstock

These broadly include:

1. The overall economy/ governance of the country
2. Factors specifically related to deciding which business to invest in (this happens after the investors have already narrowed down their search to a particular country and sector
3. Overall performance of the economy – Amongst the foremost criteria that investors consider is the overall state of the economy of a country. No investor would risk putting their money in a country where the economy is on a downswing, owing to the uncertainty it places on their investments. On the other hand, an economy that had been consistently following the upward trend on the graph is likely to find favor with them.
4. Political stability – Political stability is yet another criterion that is important from an investment standpoint because the regulations and policies governing businesses change, every time a government changes. This can prove to be a big risk for investors, and one that few would want to take.
5. Ease of doing business – Long drawn processes for setting up and operating the business (in terms of completing the paperwork and getting the necessary clearances) can be a big put off for investors. They have no interest in wasting precious time in a system defined by red-tapism and would rather invest their resources where the government regulations and policies are ‘pro-business’. For instance, the Modi government has undertaken a slew of measures to change the long-standing perception of India not being a very ‘business-friendly’ country, and therefore, detrimental to the interest of investors.

Right from introducing a single portal for all businesses to getting the necessary clearances for setting up shop in the country (which will have an automatic escalation mechanism, and hence will avoid delays and corruption), to announcing huge initiatives like ‘Make in India’ and ‘Digital India’, the world is suddenly looking up and taking notice of India as a great investment opportunity. And the results are for all to see with several deals already having been signed with countries like Japan, Australia, US etc. and many others underway.

Other countries that rank high in terms of ease of doing business and have thriving economies include Singapore, New Zealand, UK,US, Finland, Hong Kong, Denmark etc.

4. Tax regime – The tax regime applicable to businesses are also important from an investor’s perspective. They would much rather settle for an investment in a country where the tax regime is business friendly instead of one where they constantly need to focus their energies on how to minimize their taxes rather than pursuing more significant business matters. Moreover, issues like retrospective tax that have plagued India in the past are a big dent on a country and are a sure shot way to ‘shoo’ away the investors.
5. Identifying the high growth sectors – After having assessed the government and economy-related criteria, the next thing that investors look out for is the high-growth sectors. They ideally prefer to invest in sectors that either find favor with the government (for instance, the current government is inclined to give infrastructure projects and renewable energy projects a big boost and is offering many sops to investors and entrepreneurs alike) or those that have been performing well consistently over the years or in sunrise sectors that offer great potential in the coming years (the ROI is high in such sectors because even a small investment can yield high returns in a relatively short span of time).
6. Choosing the right venture to invest in

Once the investors narrow down their search to a particular country and also a particular sector, the next step is to evaluate the options in terms of the companies that can yield the maximum returns for them. The vital aspects taken into consideration to arrive at the final decision include:

1. A unique and disruptive value proposition – In a market that sees new ventures coming up every day, investors are always looking for that one idea that stands out from the rest and has the potential to change the landscape of that domain.
2. Return on investment – There can be no better option for investors than to place their bets on a venture that has the potential to create disproportionate value within a relatively small timeframe as compared to other businesses
3. Passionate and driven management team – A great management team can accomplish a lot simply with their passion and drive. Investors look for these qualities as well as credentials of the management team to gauge how far they can take the business and live up to their promise. It is important that the management team has the capability to mobilize the funds and derive optimal resource performance; to convert the business plan into hard figures. They should prove their worth not just by coming up with winning strategies but also by executing them efficiently and effectively to get the desired output.
4. Business Scalability- Plausible investments occur when a business is anticipated to be a global performer. It is important for investors that the innovation or idea they are investing in is scalable and has the potential to grow across geographies, so it can reap the maximum returns.
5. Leveraging technology- In today’s era, technology offers a competitive edge to any business that uses it effectively. It gives businesses the cutting edge to accomplish their long-term vision faster and better and gives them a definite lead in the market. From an investor’s perspective, if they have to choose between a business running in a traditional manner and one that bases its operations and decisions based on technology, the latter will be a clear winner. After all, the effective use of technology is a common factor between all leading global companies the world over.
6. Exit strategy – Last but not the least, a clear-cut exit strategy is a crucial parameter, on which several businesses fail and investors reject even the most innovative ideas. Unless the company has a proper exit strategy chalked out, investors will not be interested in investing because that is the moment of truth for them; the stage where they get to encash the benefits they have reaped on their investment.

Conclusion:

Investing millions of dollars on a business is not an easy decision and the options need to be weighed very carefully. It requires that investors take the decision keeping in mind a host of factors related to the overall economy, high growth or high potential growth sectors as well as those related to deciding which company to put their money in.

Though certainly high risk translates into high returns when it comes to business, no investor would want to see their investment go in vain

Vikram Upadhyaya

Accelerator Evangelist, GHV Accelerator. Vikram is a Strategic leader and entrepreneur with a successful background of building and leading top performing teams focused on exceeding goals. Dynamic in orchestration of multimillion-dollar business start-ups, turnaround & growth ventures. Advanced communicator and cultivator of key relationships with all levels of personnel, clients, businesses, and executive managers. Big picture thinker, talented and driven to impact bottom line while ensuring staff compliance with enterprise standards, procedures, and regulations. Vikram is a visionary & an entrepreneur, holds 16 years of Indo-Japan Market Experience.

For More Details - http://www.ghvaccelerator.com/

Source : YourStory. 

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