E-commerce Firms Ride On New IT Trends

by Sohini Bagchi    Feb 10, 2014

ecommerce

With rapid increase in the number of online buyers, Indian e-commerce companies are at the forefront of technology adoption to enhance support business. Some even believe emerging technologies have become a big enabler, helping them in gaining a clear competitive advantage.

Investing in IT infrastructure

Snapdeal.com, one of the popular online commerce firms in India has announced that the biggest investment it is going to make in the next few years will be in the area of technology. The company’s IT team comprises 20% of its overall workforce and close to 95% of all technology that Snapdeal uses, is developed and implemented in-house, says a recent ET report. While Snapdeal is reported to be raising $100 million funding, the company had grown over 500% in the year 2012-13, it aims to reach its target of $1 billion by 2015, riding on the IT wave.

Experts believe not only Snapdeal.com, any company that would want to survive and make its presence felt strongly in the e-commerce is investing in technology, whether it is in IT processes, infrastructure, platform or people.

For example, another leading e-commerce firm Flipkart that raised $200 million funding last year also said that one of the key investments would be in IT. Sachin Bansal, chief executive and co-founder of the company, says the money has been raised for “technology and supply-chain expansion to deliver quality service to more number of people.”

The key areas where Snapdeal is using IT to optimize costs include supplier side automation and functions like customer care and delivery. “We have business goals and we align them with tech scalability. We follow a very data driven culture in product and tech. There are a lot of core engineering activities we undertake to make sure that our technology moves faster than our scale,” Ankit Khanna, VP- Product Management at Snapdeal tells ET last week.

Read: Top Trends That Will Drive E-Commerce in 2014

Similarly Ganesh Subramanian, COO, Myntra.com says in an interview that that the one-hour delivery initiative of the company has become a reality, due to the company’s real-time, state-of-the-art IT infrastructure, warehouse management system and streamlined processes which has helped them in building a solid framework for effective logistics and deliveries.

Vish Magapu, CTO at HomeShop18.com believes that for e-commerce companies to stay afloat they must have a strong technology backbone. “At Homeshop18, IT is used at every step from customer relations to supply chain and tracking technologies to monitoring payment and shipping status,” he says adding that likewise the CTO or the IT leader’s role has also evolved, from a back end technology person to a more robust business person with the right understanding of emerging technologies.

Banking on SMAC

Emerging technologies such as social, mobile and analytics (SMAC) are not only helping e-commerce players in designing innovative marketing campaigns but are also helping them stay ahead of competition. According to a report by industry body Assocham, there has been a 65% increase in online shopping from last year and the e-commerce market in India is expected to grow to $200 billion by 2020, triggered by SMAC and the trend will continue to increase.

Read: Rising Online Retail To Boost India’s E-commerce Growth

Snapdeal.com for example believes the future is in mobile. By 2015, the company expects mobile to contribute more than 50% to its overall traffic up from the current 30%. “We reduced customer care costs by half in less than 3 months on the back of a bunch of tech processes. In the near future we plan to invest heavily in mobile and seller side technology,” informs Khanna.

Flipkart’s Bansal has also said in a recent interview to IANS that his company is also having major plans in the area of mobile, with a focus on enhancing service delivery.

The other key technology area that online commerce firms are looking at is big data analytics. Many of these companies are bullish on consumer oriented analytics as well as seller driven analytics to get business values from data. Gaurav Issar, Co-Founder of JewelsNext, a Delhi based online jewelry company believes a lot of technology innovation goes behind the success of any online retailing model especially as speed and quality of customer service become paramount. “We are making strategic investments in the areas of social engagement, mobile technologies and analytics to serve customers more effectively in the next few months,” says Issar.

Forrester analyst Frank Liu, who has been observing online commerce growth in emerging market notes in his blog: “Companies that are creating a predictive IT model based on data analysis to link to business goals and are implementing a converged infrastructure for data and online trading information are gaining more competitive advantage.”

Bansal adds that smartphones would be the biggest online shopping driver in the coming years. “Over half a billion Indians will switch to smartphones in the next five-six years. That’s going to be a big driver of e-commerce in India, not only in the metros but also in smaller cities, he believes.