ct-blog flight hotel local

The arrival of the "successful" dotcoms

Today’s edition of the Mint ran a story called The return of the dot-coms.

The story features Flipkart, one of our favourite sites, and tries to answer the question, “why did it take as long as it has for a books-driven model to work?”

Flipkart is essentially the Indian clone of a successful multinational dotcom, in its case, Amazon.com. There have been others that have tried the model in India, a books-heavy e-commerce one. None, before Flipkart, succeeded. One reason for this could be timing. According to market research firm JuxtConsult, India has 17 million on-line shoppers now, up from 10 million last year.

If that’s the change at one end, then, at the other, the dot-coms themselves seem to have become smarter. Many of them have good business models.

We believe that the Mint’s explanation here is more than a little naive. Sure, having a large and growing number of online shoppers in the country points to an ecosystem ripe for ecommerce, but that’s nothing new–online travel has been a giant in India’s ecommerce ecosystem for over five years now. And selling books does not automatically translate into having a “good business model”; there are plenty of companies selling books that can go horribly wrong–just look at Barnes & Noble.

Flipkart is not the first company to try and sell books or music or anything else online in India. Rediff, Indiatimes and many others tried, unsuccessfully, in the past. So, why did Flipkart succeed?

Like many of today’s successful online businesses in India, Flipkart realised that there were two things that were critical to their early and continued success:

  1. The biggest selection: Unlike their failed predecessors, Flipkart did not launch an online bookstore which had only a few thousand titles that were all available at the local bookstore anyway, they worked hard to make over a million titles available in their store.
  2. The best experience: Flipkart worked tremendously hard to ensure that their end-to-end customer experience was extremely satsifying. From browsing the online bookstore, to placing orders to receiving orders (sometimes on the very next day), the entire experience was, almost always, great.

We believe that the above two factors are what make Flipkart a runaway success–the biggest selection of products combined with the best customer experience. Most successful online businesses in India get these two things and they focus like a laser on them. The Mint’s article would have much more depth if it focussed on the real factors that are making online businesses succeed.