India’s e-commerce sector is in a great state of flux, as pure-play companies compete with big offline retailers that are trying to gain a digital foothold. An example of the latter is Indian retail giant Titan Company, part of the massive Tata Group that was founded in 1868 and comprises more than 100 independent companies.
Titan, itself, is a multifaceted brand encompassing jewellery, watches, bags, perfumes, accessories, and eyewear. It competes with some of India’s most sophisticated companies, as well as international brands.
As head of Titan’s e-commerce business, Alokedeep Singh ensures that the experience of Titan products, so familiar to countless Indian consumers who shop its stores, is replicated online.
- Convenience is a huge aspect and cannot be ignored–and it will stay even after the whole discounting game is over.
- E-commerce is a very cash-intensive business. Large investment is required into technology, marketing, and logistics.
- Omnichannel is a very fashionable term and an overrated word.
CMO.com spoke with Singh about the challenges in this space, especially for traditional companies.
CMO.com: E-commerce is a thriving sector in India. What’s driving this growth?
Singh: I think what is really working in this space today is the consumer shift, where they are not afraid to purchase things online. At least in the urban mindset, it is quickly taking the position of being the preferred means to purchase products, and that is driving the e-commerce juggernaut in this country.
There is, of course, device proliferation, be it the desktop or handheld devices and Internet connectivity, which is helping tremendously in the growth of the e-commerce industry. I would say it’s a very sweet-spot situation.
There is a whole lot of investment happening, too, whether it is venture-capital or private-equity funding, or even companies like us and other large retailers who are looking into online today in a very big way.
CMO.com: Is e-commerce here to stay, or is it like the dot-com bubble–waiting to burst?
Singh: The activity in the e-commerce space is building the conviction for both consumers and for companies like us to look at this medium as a channel that is here to stay. Today, price as a lever or discounting is being used as a [tactic] for acquisition on this platform.
However, I think tomorrow, when this lure is gone, e-commerce will continue primarily because of the convenience that it brings into a consumer’s life, whether it is as simple as booking an airline ticket, or making movie-ticket purchases, to buying products and groceries online.
Convenience is a huge aspect and cannot be ignored–and it will stay even after the whole discounting game is over.
CMO.com: Established retailers have taken a wait-and-watch policy or have a very conservative approach when it comes to extending their platforms to e-commerce. Is this true for Titan, too?
Singh: We’ve been in e-commerce for a little over two years, which is when we started our company e-commerce portal. Before that, for a year or so we were selling through the marketplaces. We still sell through the marketplaces as, fundamentally, we believe in giving customers all possible options to experience and purchase the brand.
For us, the conviction in building our own e-commerce business today and the kind of energy we are putting into it is driven by the shift in customer behaviour.
For us, the e-commerce channel works twofold: It acts as a point of sale to the customers searching and browsing products–say a bag, watch, or a piece of jewellery or perfume online–but at the same time it also acts as a place of influence by putting the product catalog online for him or her to browse and to take that decision to buy in the store or online. This is something that differentiates us from a pure-play e-tailer where the purpose of e-commerce is purely sales.
For anything new, people are skeptical and they want to see what is happening. At the end of the day, let’s not forget that e-commerce is also a very cash-intensive business. Large investment is required into technology, marketing, and logistics. For e-commerce businesses that are not funded by venture capital or private equity, perhaps there is a reason not to jump into it immediately. It’s not wait-and-watch for what somebody else will do, but wait-and-watch for the whole model to evolve.
CMO.com: There was a time when people used to research online and purchase offline. Is this still the case?
Singh: Today digital has become a large influencer for offline sales whereas it has not completely shifted the purchasing behavior to online. The first reaction if I see a billboard or a TV commercial is to go on to my device and search for it. However, at the same time it’s a category-wise alignment that is happening today, so in mobile phones and electronics, to a large extent, a large shift has taken place. But, of course, there are other categories where digital remains a medium for a consumer to evaluate, research, and then to take a decision whether to buy online or offline. It’s a mixed bag, if you ask me right now.
CMO.com: So how are online buying preferences changing?
Singh: Online products are categorised on the pricing level. Products that are priced relatively lower are faster-moving products, while those that are higher in value, like, in our case, jewellery, are probably evaluated online and bought at the store. Going more granular across the products, I think today we sell from all the 14 brands, and it’s not like we don’t sell [online] from Tanishq, the jewellery brand.
CMO.com: How much are customers prepared to spend online?
Singh: The wallet size differs from category to category. In jewellery, average ticket size would be between rupee (Rs) 15,000 to 20,000 ($US230 to $300); however, we also see orders worth Rs 1.5 lakhs (Rs 150,000) ($US2,300). That’s where we have put a cap on the online purchase because of the limits on people’s credit card spends.
On watches it varies again from brand to brand as there is a different [target group]. I would put it around Rs 4,000 to 4,500 ($US60 to $70) and Fastrack [youth fashion] at a little less.
In the case of eyewear, average wallet size would be anywhere between Rs 1,500 to 2,000 ($US23 to $30). Today we reach out to customers across the spectrum, where some are looking at luxury brands like Tanishq, and there are also people looking at Sonata [the mass brand].
On e-commerce we are growing by 2.5 to 3 times every year.
CMO.com: How do you use data for a better customer experience?
Singh: Being a retail company and being in the business for 20 years, we have an in-house loyalty program with more than 6 million active users. We use a lot of in-house tools where we slice and dice data for our campaigns to reach out to the right audience with a curated mix of products. Going forward, as the online space evolves we would like to look at a much more sophisticated analytics piece than we are currently using.
CMO.com: Do you see any kind of consolidation happening in the e-commerce space, and what impact will it ultimately have?
Singh: E-commerce today, besides being an industry of its own, has also become a type of consumer behaviour. It’s become a way of life for the customers. It’s become a consumer habit that isn’t going to go away. There are too many players today, and one expects that going forward the market will get consolidated. Given the size of e-commerce today, I don’t think there is any kind of bubble as it’s become a habit and not some sort of indulgence. When I say habit, I mean online is not about impulsive people and their purchases, but it’s a migration in a certain way where a certain set of people is buying at the physical store plus online.
CMO.com: So is online shopping an urban indulgence in India, or is it expanding into the smaller cities as well?
Singh: Seventy to 75% of orders come from the top six cities, though we do get a large number of orders from tier-2 and tier-3 locations as well. There are a few challenges that need to be addressed as we go along this path when it comes to bandwidth, broadband, and data. There are developments that will make access to the Internet much more affordable and commoditise the market. Similarly, logistics today need to be consolidated.
India Post [the government-operated Indian postal system] is trying to work in this space with a few players. These issues are gradually getting addressed, and in the next few years you will see much greater penetration in the tier-2 and tier-3 cities where much of the physical retail is also not present currently. That makes a rich consumer TG to tap into, especially for brands that want to reach those geographies and can now overcome the need of establishing their physical stores.
CMO.com: You have earlier spoken about omnichannel as the way forward for companies. What is Titan’s approach?
Singh: I wouldn’t say we are omnichannel right now. Omnichannel is a very fashionable term and an overrated word. It’s a word that is used for a variety of solutions that one is offering. Each company has its own definition of omnichannel. For us, it’s an integrated approach of the online and physical store, which tomorrow develops into use cases, like “click and collect,” “ship from store,” and give the customer the ability to shop within the store or an option of a way to purchase while he is on the move–these need to be evaluated.
At Titan, we are looking at various opportunities in this space that can be the best fit for brands like us so that the customer experience–which is the most important thing–remains homogeneous across Web, mobile, and the store level.
CMO.com: As the e-commerce head, what are your priorities for the brand?
Singh: Top most is being able to translate the whole brand experience online when the customer is shopping. They are used to our stores and have a certain expectation from each brand while shopping for it. To meet that expectation online to is our biggest challenge.
CMO.com: What do you find most exciting about operating in the e-commerce space?
Singh: The most brilliant thing is that there is no right and wrong in this business. For me and my team, the opportunity to envisage a strategy that is a three-to-five-year horizon, but build it as it happens, is exciting. What possibly works for someone else may not work for you. For us, it is also the opportunity to build our iconic brands, which until now have been restricted to offline to take them online. We take pride that we are able to translate the same experience online, as in the case of our physical stores.