eCommerce in India - A blog by Darpan Munjal

The online shopping space in India is getting more and more crowded . Even though, the overall pie remains small, today’s customers have more options than ever when it comes to online shopping. This certainly is good news for aggregation platforms such as price comparison engines. The more options shoppers have, the greater value they would see in platforms that offer a one stop comparison of products and prices across retailers. Not surprisingly, several comparison shopping platforms have been launched in the Indian market. Tolmol.com and Bechna.com are the two most prominent ones. So if we have these comparison shopping platforms available, why aren’t people using them? Or are they?

Today’s Environment
Before we try to answer these questions, let’s try to explore the value proposition offered by these comparison shopping platforms. At the most basic level, a comparison shopping engine must deliver on a promise of accuracy, and unbiased price comparisons across a wide breadth of online retailers. The overall value proposition offered by these platforms is to help customers save time in making more informed shopping decisions. The question is how well are these comparison shopping platforms able to deliver on these basic promises? To explore this further, let’s take an example. Suppose, you are looking to buy a Nokia N70 phone – instead of visiting individual shopping sites separately, you decide to start with a comparison shopping platform like Tolmol.com. Performing a search for N70 on Tolmol.com quickly displays about 9 different online retailers selling this product. So far so good, however there is one little problem. The prices displayed on the comparison shopping page do not actually match the current price offered by the online retailers.

Granted, these are anecdotal examples and it is probably unfair to generalize and throw the entire comparison shopping platform under the bus. However, it seems that the very value offered by such comparison shopping platforms is questionable if, at the end of the day, customers have to actually visit individual sites to reconfirm the “true” price for these products. Even if the price comparison engine is correct 60% or 70% or even 80% of the time, how many customers would be willing to make a shopping decision based upon unreliable information? For customers to see value in these platforms, the pricing information has to be accurate close to 100% of the time. So should we blame the comparison shopping platforms for these reliability issues? Not entirely. As much as building an aggregate platform sounds simple, perhaps we need to explore the broader challenges in the Indian context that must be overcome to make aggregate platforms successful.


Challenges
Firstly, there is an issue about marketplaces. Most of the large online e-tailers are already an aggregate platform. Most of these online players offer a platform which brings together different third party sellers or vendors. In a lot of cases, these vendors are also selling across various online retailers. For example, a Nokia N70 is sold on Indiatimes shopping by at least 5 different vendors, at different prices. The same product is being sold at Rediff shopping by multiple vendors as well. A comparison platform should not only compare prices across online retailers such as Rediff or Indiatimes shopping, it must also do a price comparison among various vendors selling on these individual shopping platforms.


Secondly, there is the issue about mistaken identity. Imagine what would happen if you decide to use a different name with every employer you work for? Or you change the license plate of your vehicle as you drive from one state to another. This is sort of what happens in e-tailing today. Products have a different “name plate” across different online retailers – sometimes they are sold under different “name plates” even within the same online retailer. In this situation how can we expect a comparison shopping platform to show accurate prices across different retailers? An N70 may be called “New N70” or “Nokia N70” or “Nokia N-70 Music Edition” across various retailers. There is no standard code that is assigned to these products. Short of manually setting up the relationships for these items across different retailers, it is extremely difficult to offer an aggregated price comparison service. In US, retailers rely on few standardized IDs (such as the manufacturer code or the UPC or the GTIN) – this helps comparison shopping platforms to search across online retailers. In some cases, even the attributes associated with products are standardized, so it is easy to offer a detailed comparison on dimensions such as color, size etc.


Another related but important issue is the lack of product feeds available from various retailers. Although some online retailers have started to provide data feeds for product and pricing information, the general practice followed is that of “screen scraping” which means that the comparison shopping engine’s robot visits the online retailer sites and tries to interpret the pricing information from the online retailer’s web page. This method is extremely unreliable and is prone to consistency issues especially when the online retailers make any changes to the product/pricing information on the site. Even in cases where a data feed is provided by the retailer, these are typically not daily feeds, which means that if the product prices change on the retailer’s site, the comparison shopping engines are not aware of them immediately – thereby resulting in pricing inconsistencies.


So with all these issues, is there any future of comparison shopping in India? I certainly think so! I look at these challenges as opportunities for new business models which can create a win win situation for the online retailers as well as comparison shopping platforms.


New Venture Opportunities
Firstly, there is a significant opportunity to begin offering services related to content management and data standardization. This model is very common in US where third party service providers help online retailers in enrichment as well as standardization of online product content. The advantage to online retailers is that they are able to offer much more robust product content to the shoppers, resulting in improved conversion rates. On the other hand, this also helps improve the consistency and accuracy for aggregate and affiliate platforms.


Then, there is another opportunity to offer services around data publishing. Instead of the online retailers building multiple feeds for different comparison shopping engines and affiliate partners, what if there was a service provider that would take online retailer’s product and price information and integrate across various comparison engines and other affiliate partners. Again, this is a widely successful concept in the US market where companies such as ChannelAdvisor offer standardized integration services with over 35 different comparison shopping platforms. These services can take away the headache and integration effort from the online retailers and let them focus on improving the core merchandising and retailing aspects of the business. At the same time, these services can significantly improve the quality and consistency of product and pricing information throughout the online eco-system and, at the end of the day, allow customers to make more informed purchase decisions.


There are also several opportunities to improve the effectiveness of comparison shopping engines themselves. When customers are thinking about making purchase decisions, they certainly consider price. But a lot of times, they also consider other aspects such as other customer’s opinions about the products as well as the retailers. If your goal is to become a destination portal for customers to make better shopping decision, then the focus needs to be broader than just price comparison. Offering aggregated analytical information such as consolidated product reviews, sales rank, merchant reviews, shipping charges, promotional details will all help in improving the likelihood that the shoppers will think about your portal as the first destination in their online shopping process

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