Last Man Standing – The Indian Ecommerce story

Last_Man_Standing(Image Source)

There’s an interesting game being played in India for a few years now.  It’s called the “Last Man Standing” game.  Some of the players playing this game include Flipkart, Snapdeal and more recently Amazon.

Since the second innings of e-commerce which started in India around  2007-08, several e-commerce companies have already shut shop. This has been especially so in the last 2-3 years where smaller players with shallow pockets could not sustain the deep discounting offered by the bigger players.   There are others which have been forcefully merged with another company with common investors.

Simple trading logic tells us that if you buy something for Rs. 100 (including all associated costs) and Sell it for Rs. 110, you make a profit of Rs. 10.

E-commerce  in India works differently.   Let’s take the example of Flipkart.  In the Financial year 2013-14 (Source VCCircle) , Flipkart had losses of Rs. 400 Crores on a Revenue of Rs. 179 Crores.  Since Flipkart is a marketplace, Revenue refers to the actual Revenue and not the Gross Merchandise Value which is the price of products sold.  So for every Rs. 1 in Flipkart revenue, the company actually lost Rs. 2.23.

Flipkart is not alone in this game.  Amazon lost 321 Crores on a revenue of 169 Crores.  Snapdeal lost 265 Crores on a Revenue of 154 Crores.  That’s Rs. 1.9 (Amazon) and Rs. 1.7 (Snapdeal) loss per Rs. 1 in Revenue

The bottom line is that every e-commerce player in India continues to lose money and justifies that ( I believe) as a customer acquisition cost.

Nice Game! How does this continue and when does this end?  Well, to continue the game, the investors need to keep pumping in more and more money till you are the only company left and then you don’t need to do it any more and can start dictating terms and hopefully make profits.

Look at how much money Flipkart has raised till now – $2 Billion.

flipkart-fundingImage Copyright: . Do not use without permission

Also notice how desperate Flipkart has been to raise more money in 2014.  This game is not over yet.  Those lines are going to get steeper in 2015.  The amount of money that needs to be pumped into Flipkart will be several billion dollars more before we reach a stage where Flipkart can confidently say that they are the last man (or 1 of 2-3 men) standing.

While there is something fundamentally wrong with the way e-commerce is being approached in India, it is the consumer who is laughing all the way to the bank right now!!

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The Revival – Ram Bhamidi’s Blog

It’s exactly 5 years since I started blogging and almost 4 years since my last blog post.  It’s time for a revival of the blog, don’t you think?

In the last 4 years:

1. I quit my  job at People Interactive ( Senior Vice President at and ) and relocated to Bangalore which is the hub of India’s entrepreneurial activity

2. Grew  Circus Social to a team to 30+ people with my partner Shalu Wasu.  We are a marketing solutions and products company based out of Singapore and Bangalore and have done over 170 campaigns for over 40 brands, have launched 2 products and working on the 3rd one and hoping 2015 will be a fabulous year for further growth

3. Had another baby.

4. Met a lot of new people and made a lot of new friends!!

5. Lost my previous blog as I was too busy with work and didn’t renew my hosting (Sigh!) I pieced it together again using the archives at the Wayback Machine.  Thank you guys for doing a wonderful job of archiving the internet.

I hope to revive my blog by posting atleast once a fortnight in 2015.   Have a fantastic 2015!

109350.strip (Image Source)

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Egyptian Revolution and Social Media

The French revolution lasted 10 years (1789-99) and was a period of radical upheaval in the French and European history that brought major social and political changes including the collapse of the French monarchy. Compare this with what happened in Egypt where the protests lasted a little over 2 weeks and resulted in the eviction of Mubarak.

Most revolutions are started by unhappy citizens. What shape they take after that and how long they last depends on several factors including of course the mode of communication to organize mass protests.

In recent times, the internet has emerged as a powerful platform for communication and social media has helped accelerate the speed of communication. Realizing the potential damage that could be caused by the internet, the Egyptian government shut down all access to the Internet on the first day of protests (in addition to blocking phone calls).

The revolution in Egypt was just waiting to happen and was of course influenced by the uprising in Tunisia. The revolution may have led to the same outcome even without the internet and social media. However, social media has become an integral part of our communication and definitely accelerated the process.

Long live Social Media!

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Trains, Planes and Harrowed Passengers

I read 2 news items today with great interest

1. China has officially clocked the world’s fastest train at a mind blowing 481 km/h. This is the world’s fastest electric unmodified commercial train

2. Greedy Airlines in India would like to charge as much as Rs. 40,000 for domestic flights.

Let’s put this in context.  If you had to travel from Delhi to Mumbai (about 1150 KM air distance), the new chinese train will take 2 hours and 24 minutes.  Compare this with about 2 hours of flying time for a flight.  If you are flying, you will also check in earlier (90 minutes) plus wait for your baggage to arrive (30 minutes).  Railway stations are usually in the heart of the city whereas airports are not.  This could mean another 1-2 hours of travel time.  It will therefore take you about 5-6 hours of time if you were flying compared to 2 hours 24 minutes by train.

This speed of 481 kmph is of course top speed and one can not expect to travel at this speed throughout.  Even if you assumed an average speed of 360 kmph and a train distance of 1400KM, it will take you  less than 4 hours to get to Delhi from Mumbai.

Trains have other benefits too.  They are environmentally friendly compared to Planes and the journey is much more comfortable as well.

There are of infrastructural challenges which need to be addressed but I am all for getting these high speed trains to India.

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8 tips for success in online marketing

I recently had the pleasure of presenting to a bunch of enthusiastic students of Internet marketing. I reflected on my experience and came up with 8 tips for success in online marketing

1. Know what you want to achieve

If you don’t know where you are going, any road will take you there.  Unless you know what you want to achieve, you will not know how to achieve it.  Set your goals for internet marketing.

2. Understand your customers

This is true for internet marketing as much as it is true for traditional marketing.  You must understand who your customers are, what they need, how they behave and where do they spend their time online (and offline).  Once you understand your customers and their behaviour, you can devise a plan to target them more effectively.

3. Select appropriate media mix.

It is important to use the right combination of online and offline media to reach your target audience.  An integrated marketing campaign is far more effective than a campaign which relies on one medium only. If you are a small business, you may not have the luxury of spending on offline media like Television but it is still worthwhile to consider all online options you have.

4. Optimize the conversion funnel

The conversion funnel starts from the time a visitor sees your banner till the time they perform a desired action on your site for example, a registration or a payment (although some marketers star the process from a visit).  For the same marketing spend, if you can optimize and improve your conversion by 10%, you have 10% more registrations or orders without having to pay 10% more.  Optimize your creatives, optimize the home page / landing pages, revisit the registration pages, look at your visitor behaviour using an analytics software like Google Analytics.  Keep testing (do A/B or multivariate testing) and keep improving.  This is a continuous process but one which is sure to get you results

5. Unpaid Traffic is always good

Any traffic that you don’t have to pay for is always good. Invest time and effort in keyword research, optimizing your site and developing effective inbound links.  Look at what your competitors are doing and do it better than them.

6.  Monitor and Analyze data

Look at your key metrics on a regular basis to see if you are on track with your goals.  Analyse trends and improve continuously.  Take corrective action as necessary.

7. Experiment

Do not be afraid to experiment.  Keep trying new things.  If you fail, learn from them and move on.  If you are successful, incorporate the learnings

8. Adapt

Things change everyday in the online world.  Understand how the online space is changing and adapt quickly.

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Passengers revolt against Indigo flight delay, demand apology and compensation

I witnessed an interesting incident while transiting through the Rajiv Gandhi International Airport at Shamshabad in Hyderabad today.  Indigo flight 6E 319 scheduled to take off at 6:00 am for Mumbai had not taken off till 10:30 am.  The passengers revolted against the cavalier attitude of the staff and extremely poor customer service and demanded an apology and a written confirmation that they will be compensated accordingly.

Passengers gheraoed Indigo airline staff demanding an apology and compensation for the severe delay


Indigo Flight Captain trying to pacify the customers


Indigo flight 6E 319 which could not take off atleast till 10:30 am as the passengers refused to board

I had to leave at 10:30 to board my connecting flight but will be keen to know what happened after that.
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Sports Betting to be legalised in India

This is the news punters in India have been waiting for a long time.  It finally looks like sports betting will be legalised in India.  The Indian government is looking at a proposal to legalise sports betting and is carefully studying UK and US laws regarding sports betting.

Needless to say, this will have several benefits

1. There is currently a multi million dollar underground sports betting already happening in India (remember the scandal Azharuddin was involved in about a decade back  and the Pakistani trio more recently).  Legalising sports betting will make it easier for people to bet legally and will curb illegal sports betting.

2. Tackle Money laundering – a lot of money is laundered through illegal sports betting.  Money such laundered often finds its way into terrorism and other criminal activities or could even be the proceeds of such activities.

3. This is a huge source of revenue for the government.  Just like Cigarettes and Alcohol, there is a taboo regarding sports betting in India and the government can impose a “sin tax” profiting from this multi-million dollar industry.

4. Future Development – Money collected in taxes from sports betting can be used in general for the development of the country or specifically speaking, this could be used to develop state of the art sports facilities

These are early days but I believe that the Indian government is thinking in the right direction.  It will be very important to ensure that the government considers all aspects of sports betting and only isssues licenses to responsible operators.

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London to Mumbai

I couldn’t update my blog for almost 3 months as I was busy …. Relocating from London, UK to Mumbai, India.  A new country, a new city, a new job and a new challenge.

We always wanted to get back to India and after almost ten years in the UK, it was time for action.  When I was a child, we always moved cities every 3-4 years as my father was in a transferable central government job.  Little did I appreciate at that time how difficult the process could be.

We cleared 10 years of clutter, packed, shipped and somehow managed to get ourselves back to India. We landed at the Delhi Airport on Independence Day ( a coincidence?)  on our way to Chennai but did manage to take a small break in UK before we returned.  There were places in UK we hadn’t visited and we took this opportunity to hit the road for 10 days.  It was great fun and as time would tell, a complete contrast to the surprises that lay in store for us back here.

Mumbai, the city of dreams, is quite different when you are not dreaming.  Relocation wasn’t going to be easy and I managed to reach Mumbai in the thick of monsoon.  It has virtually been pouring every day since I landed here.  The worst day ofcourse was last monday when Mumbai cab drivers decided to go on a strike.  I took virtually every imaginable mode of transport to get to work.  I must have looked like a character out of a bollywood rain song when I finally reached work, completely drenched.  Only the heroine was missing!

Life was comfortable back there in London as we had gotten used to things,  It is now completely disrupted.  It reminds me of the second law of thermodynamics – the entropy (or disorder) of an isolated system not in equilibrium will tend to increase over time. Which is what is happening right now.  I can only hope that the equilibrium will be reached soon

Please wish me luck.

(p.s. – please don’t reason technically that my life is not an isolated system, that’s all the more reason for higher entropy

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I could have died!

3rd December 1984. Bhopal. 7 am.

It was a chilly Monday morning. The school bus, which was actually an improvised Shaktiman truck, was parked in its usual place in Sultania Infantry Lines.  The kids, including me, had boarded the bus and it was ready to go.   The driver counted the number of school kids who had boarded, quickly checked his list and closed the door.  It was just another day with the school bus heading towards Kendriya Vidyalaya near Flour Mills.

…except it wasn’t just another day. This was different.  There was nobody on the streets, not even one person.  It was cold but it was unusual not to see anybody at all.  After a while, I saw a cow sleeping on the pavement.  And then another one.  But not a single human soul.  The bus kept going and reached our school.  We all got down from the bus only to be told that the school was closed.  We didn’t know why but there was a sense of childish euphoria about it.  Indira Gandhi, the then Prime Minister of India had been assassinated only a  few weeks ago and the school was closed for a couple of weeks before it was reopened.  Nobody complained about another day off though.  It was always welcome.

We were all huddled back into the bus and were brought back home and I saw a bunch of parents discussing something seriously. I was told that there was a gas leak in the night. It didn’t make much sense immediately but within a few hours, TV and radio stations were abuzz with talk about the Bhopal Gas Tragedy.  The Union Carbide factory leaked Methyl Isocyanate gas overnight which led to over 15,000 deaths and hundreds of thousands of people were affected ( see this ).  It was the biggest industrial catastrophe mankind had ever seen.

Thousands died.  Several others were suffocating, vomiting, had burning eyes or even went blind.  Trains coming into Bhopal station were bringing dead bodies as the passengers had died.  It was hell.

Fast forward 26 years.  June 7, 2010.

Seven ex-employees including the former chairman of Union Carbide India were convicted in Bhopal of causing death by negligence and sentenced to two years imprisonment each.  They were all released on bail within a few hours.  Reacting to the judgment, the U.S.-based company said neither it nor its officials were subject to the jurisdiction of the Indian court as they were not involved in the operation of the plant, which was owned and operated by the Union Carbide India Limited.  Warren Anderson, chairman of the U.S.-based Union Carbide group, who was named an ‘accused’ in the tragedy, was absconding throughout the trial period. Interestingly, the court did not mention his name on Monday.

I almost cried as it brought back memories from 26 years ago.  People are still suffering in the streets of Bhopal from the aftermath of the disaster. What kind of justice is this?  Would the judgment have been the same if this had happened in USA?  Why is the cost of a life in India considered so cheap?

My thoughts are with all those who lost a loved one.

I realized that the cows on the pavement were actually not sleeping.  They had died.  I lived only a mile away from the Union Carbide factory.  I could have died!

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Raajneeti – Victory at any cost

“Raajneeti mein murde kabhi gaade nahi jaate. Unhe zindaa rakha jaata hai …. taaki time aane par woh bolein”

I saw the latest Bollywood thriller Raajneeti yesterday at Safari cinema in Harrow.  It’s a “heavy” movie but I thoroughly enjoyed it.  It was fast paced and action packed with solid performances by most of the actors.

As I watched the movie, I could see characters from Mahabharat come alive in a modern setting.  There’s Kunti who gets pregnant before marriage and her son is disposed off in a boat  (Karna = Ajay Devgan) to be picked up by a Dalit couple.  There’s Arjun (Arjun Rampal) who is encouraged by Nana Patekar (=Krishna) to kill unarmed Karna (Devgan) citing how Arjun’s father was not killed in a battlefield but mercilessly murdered while he was unarmed. There are several more but I will leave it to you to figure out.

Raajneeti is a story not only about state politics but also about politics in the family.  There is only one truth in Raajneeti – victory at any cost.  As it turns out, the cost is a bitter and violent fight that disintegrates the whole family and leads to the loss of several lives. It makes you wonder if all this was really worth it.  The ultimate prize goes to Katrina Kaif who was forced into the battlefield due to circumstances.  It was a pleasant surprise, though, to watch her speak Hindi without her usual accent.

If you haven’t already seen it, I’d encourage you to go and watch it.  It is definitely “paisa vasool”. This one’s sure to bag several awards. Here’s the official trailer –

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