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E-Commerce Sites Needs To Be Savvier In Approach For Survival

By SiliconIndia   |   Thursday, March 22, 2012
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Bangalore: In 1994, e-commerce companies emerged globally with the birth of industry giants like Amazon.com, Dell.com and eBay, which despite recession were able to survive and exhibit growth. The recession opened doors to several marketing and buying trends that left the e-commerce industry with two options, adapt them and survice or reject, roll over and die. However, yet another recession, the second in so many as four years, is predicted to hit the global economy this year, this begs the question, 'can the industry stand another recession?'

We saw several e-commerce websites shutting their work due to various reasons. MSN Mall and Taggle shut down as they found it impossible to withstand the competition in the market and many of the e-commerce companies are selling their products much below cost price to attract consumers, Kalahari was shut down just two years after the launch due to low margin, and there are several more stories lying unsaid. So, how are the e-commerce companies going to ensure their existence if this recession is to hit and save themselves from the spill out.

Different e-commerce companies provide different flavors to the customers. The strategy for survival differs accordingly. Anshuman Banpna, Co-Founder and CEO, mygola, says, "We are a globally focused service provider website. We do not sell traditional goods online, rather we are more online service based." mygola is a service provider which provides users with their own personal travel planners, does all the research and bookings for the customer's trip.

However, several e-commerce startups are well placed to take advantage of the recession due to the flexibility that they have inherited in their genes from their past experiences. The current recession will affect the macro-services. "The e-commerce giants who are macro-services providers, like Amazon and Groupon, will have impact on their business due to change in the macro-economy," says Nishith Shah, Co-Founder, Fab.com. Fab.com is a New York-based e-commerce company that offers daily design inspirations and sales on huge discounts.

If the recession hits, more and more consumers will be looking for better deals and the success and failure of an e-commerce company depends on how smartly they procure things, and pass on the bargains to the consumers. The startup e-commerce companies struggle most with getting users. "They need to go out of the way to find customers and once found, they need to make sure that the order is fulfilled. Startups need to be savvier to acquire customers," adds Shah.

"When the customers have limited budget, they plan more stuffs accordingly. What you need to do is reposition yourself. We are going to approach our existing customers providing more information about the local tourist places that they can visit with low spending," adds Bapna. According to him, when The budgets come done, customers do not stop spending money, rather they start spending more intelligently. The most different and customized way the companies prepare to approach their customers, the more they ensure their success in the economy downturn.

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