India- Where even small means BIG!!!

If the market is the prime point to start off while thinking of marketing, India is the land of opportunity. Statistical explanations are most often used by research agencies and consulting firms as a support to show how a small sample survey can be extrapolated and a maximum population under a desired market can be segment, targeted and possibly milked. One of the considerations that most agencies will offer is to concentrate under the bell and ignore the extremes at both the ends.

Somehow this isn’t always true when it comes to India. If I was to paraphrase a very senior and knowledgeable person on India, Mark Tully (BBC Bureau Chief in India for 30 years prior to 1994), with the kind of population India boasts of, even a section termed as the exception can actually number into millions. If put into marketing perspective, even a failure like the World Space Radio had 4.5 lac subscribers in India (the only country to deliver profits) and a cult bike like Royal Enfield hugely affects the stock values of Eicher Motors. It is hardly surprising then that Flipkart can make sales worth Rs. 6 Billion (USD 100Mn) through just on Big Billion Day.

While the above might suggest that there is almost a constant momentum by the side of any product or service which can fulfil the market needs in terms of the price & quality equation. There is possibly no company which enjoys the satisfaction of the ‘S curve’ and the fascination of adding more customers and greater revenue keep the journey within the ‘J’ curve for growth. It is at times that this fascination increases the areas of neglect which are most likely to hamper the desired levels of growth in the near and present future. A case in point, Enfield bikes have a waiting period of roughly 4 to 14 months depending on the model and the consumer choices.

Maybe a cult bike can afford a bit of snobbery; but can an e-retailer in a market driven by cut throat competition afford such lapses?

Flipkart’s Big Billion Day was the first of its kind initiative in India and it almost earned itself the title ‘Flopkart’ thanks to all the technical glitches. The saving grace was for the founders to express an apology to the customers it could not handle on that day. (http://www.dnaindia.com/money/report-flipkart-turns-into-flopkart-on-big-billion-day-sale-2024058 )

We can draw parallels to the fact that the first Republic Day Sale by Big Bazaar (another first of its kind in India) also had caused similar ciaos and almost rioting by customers outside the stores; a situation managed by riot police and a declaration of extension for the sale.

Both these are cases where consumer response to the discount sale was far exceeding expectations and the retailers were not planned for the scenarios. But the consumer today is a very different animal. They are high on options and low on patience- which practically implies that they are demanding on their terms and unforgiving towards any slip ups.

With one Big Billion Day Sale, Flipkart has 1.5 Mn orders to fulfil. This is in addition to its everyday sales where it trades its numbers with SnapDeal and Amazon for the top spot. All have been offering heavy discounts leading up to the festive season leading up to Diwali and have together contributed to a problem faced never before by the e-retail model: a breaking strain on the delivery logistics. All the giants use some or the other kind of a courier company as its last mile link and the sheer volume of orders is exposing its weakness.

For the first time, it took 5 days to get me a book I ordered from a seller in my own city of Mumbai. The next was a comparative delay on some electronics which was again 5 days from the date of ordering. The previous benchmark was 2^nd day for a book and 3 days for electronics of similar kind I had ordered previously. While I kept my anxiety aside by convincing myself on how not being a loyalty club member can affect service, an article I read today actually told me that so was not the case; nor was I the only one who is having such experiences. (http://www.dnaindia.com/money/report-e-tailer-shipments-pile-up-on-diwali-rush-2028506)

These are not isolated incidents, nor is this a problem just the Flipkart’s and SnapDeals of the world facing; to me it appears as a critical area called ‘delivery’ has been outsourced and ultimately overlooked. The consequences are evident- cancelled orders, further loss of face for the brands and a bad customer experience to top it. Not to mention, large electronic brands like Sony, Canon and Dell are refusing service under warranty for products bought online as they refuse to acknowledge the genuine-ness of the products. I have already have had one such warranty refusal, but luckily the matters have not escalated beyond.

As a marketer, we are often laid a challenge to think of areas where something named ‘competitive advantage’ can be identified and used to the fullest to surge ahead. Service delivery and aftersales is one area where we often searched for such an opportunity with high impact and difficult replication. 

As I see, the retailers of today have possibly missed the bus and having not planned this as a place to build their brands. It might have been a small area and might be affection a small percentage of the orders. But then again- for India, the small can actually be BIG! While the high volume advertising has made 'Let's Flipkart it' as a new addition to the next edition of Slang dictionary, they seem to have failed at winning customers by building on what can actually be the big advantage.