ecommerce secrets of success

E-Commerce:Secrets of SuccessFind out what it takes to succeed in E-Commerce. Get expert advice on handling challenges related to payment gateways, security, and reverse logistics. Discover the relevance of cloud computing and mobile apps in saving costs and enhancing customer outreach.

E-Commerce:Secrets of SuccessFind out what it takes to succeed in E-Commerce. Get expert advice on handling challenges related to payment gateways, security, and reverse logistics. Discover the relevance of cloud computing and mobile apps in saving costs and enhancing customer outreach.

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COVERSTORY

From B2B to B2C to C2C, from startups to well-established brands, 5 e-commerce companies share the problems they face, their secrets to success, and their opinion on must-have tech. in e-commerce

Hiren Mehta

What Does it Take to Strike Gold in E-commerce?

1. What are the technology-related challenges faced by you and what changes are expected in 2013?Param Parameswaran, Chairman, Sulekha.com: The key aspects of internet/mobile technologies that are changing rapidly are: Growing use of mobile to access content (Eg: Face-

book India gets more users via mobile than a PC for the last 18 months)

Growing number of social media plaorms to connect with users (Facebook, Twier, LinkedIn, Pinterest, Google+, dierent forum sites have all grown more than 100% year-on-year in India)

Understanding the user across mulple screens (mobile, PC, tablet, smart TV, etc. are simultaneously used by the same user)

Growth of performance-oriented adversing for cor-porates (for instance, car manufacturers want to pay only when cars are sold or actually test driven and not for leads or exposure adversing)

Growth of small-and-medium businesses (SMB) in adopng the internet/mobile medium to get custom-ers, compared to print/radio (hand-holding the SMBs across diverse choices in the digital arena)

Sulekha is responding to this environment by: Providing a consistent and uniform user interface

across all our marketplaces (this connues to be a work-in-progress)

Deeper understanding of user needs across mulple products and services and to try and fulll the needs from Sulekhas base of 2 million+ business lisngs

Greater investment in acquiring and retaining SMB customers and simplifying the internet/mobile envi-ronment by providing them calls and customers (not just clicks, as given by search engines)

Khalid Isar, Country General Manager, Alibaba.com India: As our business is primarily based on the internet, one of the most crical challenges we face is the lack of broadband infrastructure in the country, especially in rural areas. SMEs are considered as the engine of economic growth in both developed and developing countries as they assist in regional and local economic growth. SMEs accelerate rural industrializaon by linking it with the more organized urban sector. As SMEs are our key customers, the boost in the broadband infrastructure in the country will enable Indian SMEs from all corners of the country to be compeve in the internaonal marketplace. While 3G

Ankit Tulsyan, Co-founder, Indiebazaar.com

Manoj Gupta, CEO and co-founder, Craftsvilla.com

Khalid Isar, Country General Manager, Alibaba.com India

Param Parameswaran, Chairman, Sulekha.com


spectrum has enhanced internet usage, it hasnt ltered down to the general populaon. The soluon to this would be to boost internet infrastructure, parcularly in er II and er III cies. It is among the major contribung factors to the lack of widespread adopon of e-commerce by local businesses. The government, however, strengthening the Naonal IT Policy will help take the Internet to villages of rural India to facilitate access by local business owners to global trade through e-commerce. This move will have a signicant impact on the SMEs which are now increasingly prepared to invest in internet markeng methods, or marketplaces like Alibaba.com.

Low internet penetraon follows low level of aware-ness about e-commerce. To educate SMEs about e-com-merce in India, we have been partnering with several prominent industry bodies like FICCI and FIEO to get our message across to the targeted audience. Since we have set-up our local operaons, we have conducted training workshops in more than 10 cies across India. We have trained a signicant poron of our veried members and gold suppliers on how best to leverage e-commerce and how to make the most of their Alibaba.com account.

To help our members use the site more easily and to reach beer quality buy-ers and suppliers, Alibaba.com has been focusing on upgrading its business model over the past two years to shi away from aggressive member acquision.

Our Indian members have been out-spoken as to the types of changes theyd like to see on the plaorm and deal with usability of the plaorm to list their prod-ucts. We have made a number of improvements on that front whereby business owners can update their product pictures in batches, rather than one by one, as well as tagging their key words for searches. With members be-ing able to update their products and their features more easily, their experience on the plaorm improves and more buyers from overseas are able to see their prod-ucts. The more acvity Indian suppliers have on their online storefront, the higher they place in search results for products like theirs.

Recognizing the limitaons of one-size-ts-all, Alibaba.com recently has been rolling out a modern mini-site design for Alibaba.com gold suppliers, of-fering a more exible storefront template that gives suppliers more freedom to customize the layouts of their homepages, complete with rotang top-of-page banners, company videos and product showcases. Not only does the new design make it easier for suppliers to highlight their experse and top-selling merchandise, it enhances

the customer experience and makes it easier for buy-ers to disnguish sophiscated, engaged suppliers from underperformers.

Safety measures for buyers include the addion of veried members in India, launched at the beginning of 2012. This was all part of Alibaba.coms ongoing ef-forts to improve the transparency and safety of online trading. Suppliers who opt to parcipate undergo basic background checks to conrm they are legimate busi-nesses and not scammers. Alibaba.com sta or local part-ners cross-check government records such as business licenses as well as other sources to verify a companys standing and ensure suppliers contact and other busi-ness informaon listed on the Alibaba.com website is accurate. Enhancing the quality of our marketplace and buyer experience will connue to remain our focus for the rest of 2013.

Khushboo, CEO & Founder, Whysoserious.co.in: I think the major challenge that we face is not much technology related but on the payment front. I am sure it is just not

us but other ecommerce sites also that nd it rather dicult to popularize the plasc cards usage on the ecommerce sites. Making payments online in an easy, smooth and secure way without too many hassles is considered a major challenge for e-commerce even today. We face this problem everyday; people are so skepcal when it comes to using the cards. We are aiming to make the online payment experience as simple as possible. We are researching on that right now; hope we get a robust soluon to that problem.

Other than this the other challenge that we face is besides handling ever-increasing rush of customers, we have the task of making all our in-house systems scalable to match up to the growing demand. It is very important to change the technology based on the ever-evolving cus-tomer needs. This change in technology is very frequent and hence too challenging. We hence want to keep inno-vang, slimming down processes and reducing the level of complexity. This is what we want to achieve.

Lack of proper broadband infrastructure, especially in er II and III cies in the country is a major contribung factor to lack of widespread adopon of e-commerce by local businesses and SMEs in India.

Khalid Isar, Country General Manager, Alibaba.com India


COVERSTORYAnkit Tulsyan, Co-founder, Indiebazaar.com:The challenges we face are:1. To build a ecient plaorm from scratch which is

scalable. The design, development & tesng eort required to do this was one of the biggest challenges that we faced.

2. To develop a birds-eye view to encompass all the eorts to build the technology required to create the product we envisioned. This foresight which usually takes years of experience to nurture had to be incul-cated at an accelerated speed.

3. Finding the right resources while keeping our costs in control.

Expected changes:1. Create a beer user experience for our sellers to

increase eciency.2. Introduce advanced tools for markeng and business

analycs for our seller network3. Drive seller engagement using technology to

maximize the full potenal of network eects in our business

Manoj Gupta, CEO & Co-founder, Crasvilla.com: In terms of the challenges, on the seller front, sellers need to be technically more sophiscated and usually they arent as tech-savvy.

Buyers access the website from a variety of places. They use dierent devices and their connecvity oers dierent throughput rates, which aects their percepon of user experience. It is a challenge to deliver the content fast irrespecve of the number of products that you have in the inventory. You need to set up caching at mulple levels. You also need to distribute the database without any choke points. In our case, we also need to manually approve lisngs within 24 hours. That too is a big chal-lenge. And also it is a task to integrate SAP with the daily payment cycles that we have.

As for expected changes, a focus on mobility is de-nitely expected. There are bound to be a large number of permutaons and combinaons of devices and browsers used for accessing.

2. Please share some driving factors/reasons behind your e-commerce ventures success.PP: Sulekha.com gets more than 25 million transacng visitors every single month in India and is able to put them in touch with each other across our 10 leading marketplaces to buy, sell or interact with each other. We also have more than 75,000 paid SMBs in 44 cies who get calls and buyer enquiries from these 25 million visitors per month.

Sulekha.com has solved a dicult and important problem for both consumers and SMBs which is to help delighul discoveries happen between the two broad sets of users. Sulekha.com has achieved this ability to connect buyers and sellers across Property, Home Needs, Oce Needs, Educaon, Lifestyle, Mobiles, Cars, Used buy-sell and Travel marketplaces.

Besides this, Sulekha.com also helps 2 million NRIs interact and transact between each other.

KI: India is a unique and very important market for us because it has a large MSME populaon (more than 26

million) and has both a robust domesc market and growing export sector. It is esmated that in terms of value, the sector accounts for about 45 per cent of the manufacturing output and 40 per cent of the total exports of the country.

With me, Indian suppliers have grad-ually begun leveraging the power of the internet. Ulmately, our growth drivers are Indias entrepreneurs. India has a his-

tory of strong entrepreneurship and the ability to adapt to global trends for trade gives us all ample opportunity for growth. With the changing economic landscape, India has witnessed the rise of several young entrepreneurs who have successfully created online business whom we call Netrepreneurs. Alibaba.coms focus has always been on these Netrepreneurs, small and medium sized businesses, around the world, and our vision remains on making it easy to do business anywhere.

An online marketplace like Alibaba.com oers dierent types of membership based on the needs of its customers free membership, veried membership and gold membership. Alibaba.coms gold supplier membership is a paid form of membership which comes at a minimal cost per year. Gold supplier is Alibaba.coms highest level of membership for our supplier members and allows them to maximize their exposure to overseas buyers. All suppliers applying for the membership must pass an authencaon and vericaon process conducted by an independent third-party agency.

It is a challenge to deliver the content fast irrespecve of the number of products that you have in the inventory. You need to set up caching at mulple levels. You also need to distribute the database without any choke points


Besides trust and safety, the portal oers unlimited product lisngs to gold suppliers. It also includes easy division of products into dierent categories which enhance the buyer experience. There are a number of features, like trade alert, which sends buyers automac updates of new suppliers on the site lisng products of interest to them. Indian suppliers, for example, can take advantage of this feature by lisng their products in mulple categories and lisng creavely. Trade manager is another unique feature which is free for Alibaba.com members. This enables buyers and suppliers to chat in real me, translate messages instantly and send les of any size instantly to potenal trade partners.

Apart from its online acvies, Alibaba.com also catalyses export growth for SME in India through various oine training and business matching sessions.

Alibaba.com has been differentiated from other online classifieds as both international and domestic suppliers can host their company profiles and catalogues in standardized online storefronts and post product listings and trade leads on the platform. Through our consistent efforts of educating the Indian SMEs and enhancing the user interface, we have successfully managed to gain the confidence of more than a million SMEs.

Khushboo: I really dont think we are a success yet, as we are way too young and new. We launched whysoserious.co.in last month, so we have just started walking; we have a long way to go still. But yes we have been received very well so far by the people here and I think what has worked in our favor is the fact that we dont really take this site too seriously / too business-like. This is a place where we come, we want to have fun and sell happiness, and we would go out of our way to do that for our customers. We are more like a friend than a website, and people have actually loved us for this approach. The look of the site, designed by a wild head designer Pulak Bisht, has actually managed to establish some sort of cord with the customers. They love the look and feel of the site. It is refreshing and friendly.

AT:1. Technology-driven business approach2. A small & agile team with stress on automaon to

reduce costs3. Low cost and highly scalable marketplace model.4. Constant review & improvement of processes

MG: The rst reason I can aribute is to have a variety of products. We have the largest collecon of India-specic

handicra products.Secondly, we have several products that are hard to

nd elsewhere. This is also a reason behind our success.For us, CoD and discounts are not drivers because we

do not oer them. We do not oer CoD for operaonal issues, such as returns, lack of automated payment han-dling, etc.

3. What are the essential technologies that are important for any online player?PP: Most leading online players, including Sulekha.com have invested in the following technologies to succeed & scale-up: CRM-Big Data-Social media and other technologies to

understand consumers beer Technologies to deliver seamless user experience

across mulple devices Sales force automaon and customer understanding

modules Search and social media mastery to get new con-

sumers and customers Cloud-based technologies to provide signicant sav-

ings on physical hardware/soware investments Internal employee networking to have a seamless

ow of communicaon throughout the organizaon Inter-oce video calling to bring employees across

diverse oces together

KI: With e-commerce, what one needs to have is just a table space with a computer and Internet connecvity. Most entrepreneurs sll prefer the tradional brick and mortar business model, before experimenng with click and mortar. E-commerce has changed the way of doing business altogether for some entrepreneurs. What once used to be challenging for businesses to reach out to new customers and markets, is now easy with e-commerce and the Internet. Customers can nd, interact and negoate online from their laptop at home, oce or on their smart phones.

To begin with, for an e-commerce business, one needs to have a website which will include the brief company prole, preferably with pictures of the products that the company manufactures, and most importantly, contact details. This is the cheapest and the easiest way to showcase and bring your company and the work on the web. B2B sites like Alibaba.com provide small busi-nesses with opportunies to establish their presence on the Internet by providing them a one-stop shop, iden-fying potenal trading partners, learning more about global trade, sharing trading experience and interacng with each other to conduct business online.


COVERSTORYB2B e-commerce has made it possible for companies

in large cies and rural villages alike to connect and trade with customers from around the world. Many companies in India are small. With less than 50 people, they cannot aord expensive markeng strategies, which include tradeshows, online or oine adversing and sales oces. They need one reliable, simple and cost-eecve soluon that help them nd customers in India and worldwide. Many businesses are nding that soluon online.

Khushboo: Personally I feel anything or any technology that helps us understand our customers beer. When selling on a website, we are not dealing directly /face-to-face with the customers, so that somewhere leaves a blind spot for us, so for a business like mine, where we have just started o it is very important to know who we are talking to, where are we selling, how do we know our customers, who are they? So any technology that rstly helps you get all those answers right is for me the most

important tech tool. We have some customized tools and also Google Analycs helps us a lot there.

AT: The enabling technologies include web browsers and HTML, web servers and HTTP, CGI and Perl, JavaScript, database , Java, PHP, Ajax, Cryptographic applicaons, secure protocols such as SSL, etc. Rest everything is mostly based on these technologies.

MG: We host our website on Amazon Web Services (AWS). I consider the following technologies to be essenal for e-commerce: Website, for which you can use web servers such as

Apache. Strong database Frameworks, such as Magento Inventory management Dispatch management Payments, accounng & nance Eecve CRM

Indrajit Sabharwal, Managing Director, Simmtronics, Simmtronics Semiconductors Ltd., shares the experience gained while selling tablets on e-commerce stores

Hiren Mehta

`Sales are Necessary to Drive in Both:Physical & e-Commerce Stores

What are the benefits obtained in selling products on e-commerce portals compared to physical stores?The ability to see the product before buying is very important for the consumer. This is available

in both e-commerce portals as well as in physical stores. I consider both marketplaces to be equally important.

Is it viable to depend solely on e-commerce websites as a selling medium and have no customer-facing stores at all for an organization which cannot afford to buy large retail space?Sales are necessary in both brick-and-mortar stores as

well as e-commerce storefronts. One cant solely rely on e-commerce as a selling medium. A mixture of both is needed.

What are the decision-making criteria used by sellers to choose an e-commerce website?We adverse through television and a large number of e-commerce websites. We are trying to gain the maximum reach possible and hence there is no such decision-making criteria that we are making use of.

Do you notice any trend indicating that e-commerce websites offering `Cash on Delivery as a payment option result in greater sales of the product?I do not see anything like that. In my opinion, using a credit card is a beer payment opon than using CoD.


COVERSTORY

Capital firms are giving online merchants an advance on future credit card orders, which allows the business of e-commerce to operate smoothly

Vikram Bhalchandra, Chief Marketing & Sales Officer, Xavient Information System

`Electronic Funds Transfer is Changing the Landscape of Transactions from the Bank Account to the Business Entity

From the past few years, e-commerce has come to claim an ever larger part of our lives. For many of us, shopping or buying goods ranging from daily needs to luxuries no longer involves driving to malls miles away and ghng the crowds. Instead, we prefer going to our PCs or smartphones to shop to our hearts content. None of this would be made possible without e-commerce.

While the era of online shopping is sll developing and capturing the customers mindset rapidly, there have been new invenons in the e-commerce space that has necessitated developments in technologies that bind the various vital components of e-commerce systems together as a funconing unit. No doubt, the payment gateways are the backbone for transacons; there has always been a demand of more secure, less dependent systems that smoothens the process of paying for what you buy instantly!

Electronic Funds Transfer (EFT) is changing the landscape of money transacon from the bank account to

the business enty. When a customer makes a purchase on a business website, they can choose to have the purchase price taken from their bank account as opposed to a credit or debit card. Once the EFT process has been started on the business website, the funds will be taken from the customers bank account a few days later. Also there have been advancements in Online Transacon Processing, where capital rms are giving online merchants an advance on future credit card orders, which allows the business of e-commerce to operate smoothly.

Enablers of e-commerceInternet markeng is another broad area enabling the e-commerce business comprising anything a business does online to aract more customers. In the past few years, Internet markeng has expanded to include technologies involving search engine mechanisms. In this vein, pracces such as search engine opmizaon, pay-per-click adversing and banner ads are examined for their rates of ecacy.

Automated Data Collecon systems are another important arm of the e-commerce technology area. Online retail businesses use automated data collecon systems that allow them to gather informaon about prospecve and current customers. This informaon allows online businesses to gure out the buying, browsing and online search habits of customers, which businesses then use to tailor targeted adversing to prospecve consumers.

In the not-too-distant future, e-commerce technology not only will become smarter and faster, but could completely transform the way companies deal with internal informaon and customer service.

Moreover, technologies in the pipeline such as interacve company portals that can communicate with other portals in real-me could drascally alter the sales process.


Both technologies can do wonders for your E-Commerce business by helping you reduce costs and reach out to your customers wherever they are. We interacted with experts from Oracle and AppStudioz to find out how.

Hiren Mehta

Importance of Cloud and Mobile Apps for E-Commerce

(1) What makes the cloud a very important technology for an e-commerce business?The customers behaviour has changed. They not only go online but also transact online. Take for example IPL ckets. During, lets say the last 5 days of the tournament, I can arrange for serving increased trac during such spike periods and if need be, can scale down aer the same, without paying upfront. In the past if a company needed to set up something like this, they would need to approach a technology company like us, pay a certain amount upfront and set up an infrastructure, the applicaons as well as a pipe to connect to the outside world.

Today its about converng capex to opex. Now I can say that my business probably is going to scale to a predened limit at a cer-tain point of me and hence I am expecng only a certain number of users to be accessing the website. As a result, now I can scale much more quickly if it was not for a cloud-based model.

If I need to have an applicaon soluon that is going to increase my eciency in terms of buying, receiving, own-ing/using and recommending products by going social aer purchasing, the best way to scale up is to use a cloud-based model. I dont have to make any capital-intensive invest-ments for the same.

(2) What would you term as decision-making criteria in selecting a cloud provider?There are two ways to look at this problem. One is internal, the other is external. The answer to the previous queson revolved largely around the business dealing with the consumer. There, CRM, customer experience applicaons, etc. come into the picture. This is on the external side.

On the internal side, there are procurements, people to be managed, people to be re-cruited, whether the complete lifecycle is supported or not, are

nancials / human capital management / talent manage-ment, sales force automaon, social, analycs, search capabilies, etc. available on the cloud? Customers dont want to talk to dierent vendors, they are looking at single vendors who can provide a complete stack. Even if custom-ers have to develop their own applicaon, they are looking at somebody who can oer good infrastructure soluons.

With the bubble of e-commerce businesses already burst in India, there is a struggle for survival going on right now. In such mes, the smarter ones apart from cung costs and burning up the nanciers money are looking at other avenues to gain tracon amongst customers.

One such avenue is mobile apps. This industry has been growing at a tremendous pace in India, almost exponenally. When in the next two years the mobile Internet users are expected to grow more than PC Internet us-ers, if these e-commerce compa-nies dont have a presence on their mobile phones theyre already

dead, right? What most of these businesses require right now is tracon. And with the web space already lled up with so many deals, oers and websites, a smaller e-com-merce venture doesnt even stand a chance to be listed on the rst page of the search results. What a mobile applicaon does, is gives them a leverage to be there with the consumer all day long. It is a front of the mind reference on a phones home screen that results in repeat business. Once your app has been downloaded it will ap-pear on the screen of your customer whenever they are using their smartphone. This will increase awareness of your brand and therefore they will be much more likely to purchase from you. It boosts the brand on the highly visited Apple and Google Play stores and also increases your visibility over the Internet.

An app can be much more Big-Data driven with way beer analycs than a website, you target specic audiences in an easier and a more sureshot way. They are a one-stop soluon for sales as well as services.

By Using a Cloud-based Model, You Can Cater to Spikes in Customer Demand without Having to Pay Upfront

George Varghese, Senior Director - Applicaon Sales, Oracle

Having a Mobile App for Your E-commerce Website can Help to Get Repeat Business from Customers.

Saurabh SinghCEO & Founder, AppStudioz


COVERSTORY

Not only can reverse logistics generate more profit for a business, if handled cleverly it can also help you to break into new and broader markets

Hitendra Chaturvedi, Founder & CEO, GreenDust

E-commerce sites in India are going that extra mile to make customer experience count so as to ensure repeat purchase and word-of-mouth promoon. The money that has gone out of the marketers kiy to lure new customers can only be jused if the customer becomes a repeat buyer and / or gets new customers.

Jabong has a no-quesons-asked 30-day return policy. Flipkart has a 30-day replacement guarantee. Yebhi has gone one step ahead and has a 100-day return policy. Under such a scenario, return and replacement policies be-come pivotal. Its been seen that in a large number of cases the return policies inuence the decision to shop with an e-tailer. Having a sound reverse logiscs plan in place seems no more a luxury but a compelling need for e-commerce businesses in India.

While ecommerce logiscs focus on delivering goods to a customer, reverse ecommerce logiscs deal with geng the goods back from the customer.

Many companies are looking to online sales as a po-tenal cure for the malaise currently facing the high street. However, those rms looking to cut their cloth and aempt-ing to save cash by focusing on their commerce oering may wish to work with a provider that stresses the impor-tance of reverse logiscs. Given that many businesses are aempng to cut costs and avoid wastage this could prove to be especially prescient advice for retail operators.

There are green benets to the process also, which involves taking a customers unwanted or damaged product and nding alternave channels for prot using what could otherwise be considered a wasted or useless item.

Even if youre just starng out in e-commerce youll be considering which systems can maximize your revenue. From ecient order fullment to cost-eecve pick and pack services, the chances are youll be comparing what third party providers can oer in order to make your busi-ness run more smoothly and opmize your prot.

This is a wise move. Whilst weve all heard success sto-ries about online businesses growing from the living room, theres only so much a one-man band can do in terms of meeng their retail fullment obligaons. There are third

party providers out there who are more than happy to work with even the smallest e-commerce business to ensure ef-fecve management of the returns.

Not only can reverse logiscs generate more prot for a business, if handled cleverly it can also help you to break brand into new and broader markets. Luxury brands, for example, oen use the process to promote a dierent oer to online communies without devaluing their main brand.

Presenng surplus stock in the context of clearance of-fers, special seasonal lines and one-o deals are just some of the ways in which you can maximize your e-commerce fulllment income with minimum capital investment. But in order to do it really well youll need the right systems, tech-nology and experse and thats where an expert logiscs provider can add serious value to the operaons.

In recent years, along with the improvement of the logiscs environment and the nance environment, the huge advantage of e-commerce is gradually coming to appear, and developing by astonishing speed in several years. However, in the back of fast development, many problems of the reverse logiscs in e-commerce bring anxiety. At present, the emphases of e-commerce operaon in many enterprises is mostly before sale, considering how to make the merchandise ow to the consumer from the e-commerce enterprise with a much lower price, faster speed and higher eciency, but the return and callback of goods aer sale do not cause their enough aenon. But many well-known enterprises abroad have already regarded reverse logiscs strategy as an important means to decrease cost, increase customer sasfacon and enhance compeve advantage.

Reverse logiscs management is one of the fastest mov-ing elds of supply chain management. Today, the reverse supply chain includes everything from defecve and end-of-life products, to shipment overages and refused goods, to reusable assets like pallets and containers seen oen in automove and electronics. These goods could be refur-bished, resold, recycled, destroyed, exported, or a host of other disposion opons. Companies looking to save costs and improve nancial performance would be wise to take a hard look at their reverse supply chain.

`Aggressive Reverse Logistics Management can Translate into Higher Profits for Your Company


Merchants must focus on security primarily in order to keep eCommerce progressing. Growing consumer confidence can help grow your business by leaps and bounds

Srinivasa Boggaram, SE Team Lead, McAfee India

Growth in eCommerce = Growing Security Threats?

Online commerce has a greater impact on our lives as businesses are increasingly taking advantage of new sales channels. From e-retail to mobile commerce, to creang stand-alone mobile apps, eCommerce is the new mantra today. With this in mind, we have idened four key things impacng the eCommerce industry today. I have discussed the results of each and what it means about the state of online commerce.

TrustmarksWith the rise in identy thes, consumers are concerned about shopping online. Trustmarks play an integral part of improving security and increasing consumer condence. Generally taking the form of a living icon or logo on your website, a trustmark or security seal proves that you are a legimate organizaon, which abides by certain security code or privacy regulaons. This helps in establishing trust with your customer assuring them of a secure transacon. The brand of Trustmarks used also plays a crucial role.

SecurityWith the increasing number of eCommerce related incidents, the number of security breaches in general have also risen. Its clear that consumers are not the only ones who are unsure about keeping personal informaon safe; businesses are also ghng against hackers. Website vulnerability scanning is essenal, but its also important to remember basic security protocols like rewalls and web

applicaon protecon. Businesses should think beyond tradional security approach and should move towards an advanced protecon mechanism like next generaon IPS, next generaon host level protecon and applicaon level protecon. By following good defense pracces, businesses can oer a safer plaorm for eCommerce.

PCI ComplianceAn important part of keeping your online business safe is by following the PCI compliance regulaons for accepng credit card payments. For example, Cloud World on the same topic indicated that while there is a connecon between security and compliance, there is sll a need for more guidance. Help, SMB and consequences were key terms associated with PCI and e in directly to the reality that many merchants are struggling with these regulaons and oen lack proper knowledge about it. Businesses should follow proper tools to measure and enforce PCI compliance in their framework and services.

Mobile CommerceWhile consumers are increasingly shopping online, they are also embracing mobile commerce. Whether its purchasing goods via a mobile website or using a nave app, the pervasiveness of smartphones has had an impact on how consumers shop. The most popular term associated with mobile commerce supports this noon and indicates that connued security worries sll exist. Like for your eCommerce site, protecng any mobile oering is as important, especially as this plaorm connues to expand. Considering the fact, security tools and soluons in the mobile space is lesser compared to tradional desktop/laptop devices. Hence the mobile space requires foremost aenon to secure them.

To give a more holisc approach, merchants must focus on security primarily, in order to keep eCommerce progress-ing. Understanding some of the most pervasive terms in the industry is a great way to see where we are headed. One needs to keep in mind the importance of consumer safety especially in trends like mobile commerce and resulng which, consumer condence in your business will grow by leaps and bounds hence giving a boost to your business.


COVERSTORYWhy Sales Through e-Commerce are LessSome key payment solution providers talk about the challenges faced in ensuring successful digital payments and how this affects both the seller and the buyer

Hiren Mehta

DIGITAL PAYMENTS: WHY IS IT SO DIFFICULT FOR MERCHANTS TO COLLECT MONEY?Satyen V Kothari, Founder, Citrus Pay, talks about why merchants nd payments a pain and payment companies

dicult to deal with.

Collecng online payments is a pain from both the consumer perspecve as well as the backend

Consumers abandon shopping carts at mulple stages, due to several reasons, known and unknown

Consumers seem to lack condence in online payments in terms of security of the data entered (of cards) and also in success rates and recoveries in case of problems

The merchant meanwhile, has to also deal with signi-cant success rate issues at the backend with all his PGs and providers, somemes as high as 40-50%

He also has to deal with the rapid proliferaon of mobile devicesiPads, smartphones, etcthat make his storefrontpayment issues even more dicult to manage

Typically he has to use more than one vendor for his paymentsa dierent PG for cards, another aggregator for netbanking, and his team has to monitor both up-mes as well as the enre selement and reconciliaon process across all his vendors

If he wants to switch a PG provider due to success rate issues or beer economics, it is another round of painful tech integraons and tesng using precious IT resources that would rather take an unpaid leave to go for a root canal sans anesthesia.

There is no way for him to get a full picture of his trans-acons, stascs on preferred payment modes etc, without doing internal analycs around this.

And on top of all of this, just when his users are about to pull out their wallet, they are dumped from his shopping cart to a payments page that looks noth-ing like his well craed site, unless he goes through a painful PCI-DSS cercaon. Yes, those are the behinds of four more staers headed to the doors for voluntary root canals.Many of these problems apply to all geographies that

have adopted digital payments, but they are exacerbated in India and other emerging markets as the volume of busi-ness isnt high enough to jusfy the pains, and the core in-frastructure including Internet pipes and PGs arent robust enough to eliminate all but the exceponal errors.

We all know the data and the projecons: The Indian digital payment market, $20 billion today, is expected to grow to $50 billion by 2015, maybe even more. Consumers are coming online in droves, oine instuons are collecng money digitally, blah blah blah. Repeat the same story for any emerging market in SouthEast Asia, and it would seem that there are Amazons being created around every corner.

Nope.

Payment pains for online merchantsAsk any merchant doing business online as to how he handles his digital payment issues, and you can be sure you are o his Christmas party invitaon list. Steel yourself for the avalanche of complaints to follow, and keep a sharp outlook for signs of rising blood pressure such as abnormal perspiraon on the forehead, quickening of breath, and a barely controlled urge to throw objects against walls. Here is the gist of what you may gather between angered gasps and cuss words:


The coming years will see the emergence of totally new sets of online merchants- educaonal instutes, hospitality ventures, government enes - which have already started making this shi, small retailers including department stores, supermarkets and specialty stores. And the problem increases manifold and the eciencies, user sasfacon levels, and hence rate of adopon keep geng limited.

Merchants should demand more from payment partnersYes, it really should be considered a partnership, where each side understands the needs and movaons of the other and builds trust in the relaonship to grow together.

A payment partner should ideally: Work with the merchant to reduce drops and failures.

Analyze the enre drop funnel and eliminate all points of concern

Ancipate market needs and be ready to support the merchant as he expands on to new plaorms and geog-raphies

Create products, applicaons and services that meet the complete need of the merchant

A merchant, on the other hand, should: Collaborate openly with the payment partner to build a

growth roadmap together Be disciplined in conducng internal ROI analysis to

understand what should be outsourced and at what price. This is a win-win, you save money and resources, and encourage your partner to invest in innovaon.

Be willing to experiment with new concepts and solu-ons so as to movate payment companies to innovate and experiment on how to change the market

Wheres my phone, mommy?Indian Internet mobile users set to double to 165 million by 2015.

The growing popularity of smart phones, tablets, notebooks and the unprecedented number of consum-ers using plaorms like Android, BlackBerry, iOS and Windows have le serious online merchants in a race to opmize their sites, checkout pages, payment pages ac-cording to the various new devices coming in the market, just to remain relevant.

The merchants can choose to have a web site, a mobile app or both. Building responsive sites that change size and layout in response to the users device will become imperave in order to remain visible in the consumers mind-space and remain viable in the market; or he can design an app for his repeat clientele to have a deeper level of engagement and frequency of interacons.

Mobile devices are increasingly becoming the primary medium to access the Internet across age groups. With the momentum really only beginning in this arena, peoples experience with mobile transacons are limited to the use of mobile devices for paying bills, doing online bank transacons and ordering meals using apps, etc. But the day is not far when consumers would want to use mobile phones to do everything else too, from subming online applicaons, paying taxes, paying educaonal fees, booking a hotel, a holiday, paying advances, and everything else. A merchant should idenfy a payments partner that is ready to ride this tsunami of user behavior changes.

Who would work with you?PCI-DSS compliance, good UI, near perfect technical txn rates, those are the metrics of a good payment gateway provider. But R&D, ancipang trends, innovang and experimenng with soluons and managing both sides of a merchant-consumer equaon with rigor, discipline, quality and consistency? That makes for a holisc payment soware innovaon partner.

THE FUNDAMENTAL CHALLENGES IN ONLINE PAYMENT SYSTEMS ARE OVERRavi Jagannathan, Vice Chairman, eMudhra and director, YPayCash talks about issues related to payments made using the mobile phone.

Which are the technology-related challenges in online payment systems?The fundamental challenges, such as transming rich con-tent over low bandwidth are over. However, condence sll remains low. There is inadequate trust placed in the organi-zaons running the e-commerce website. The cart abandon-ment rate is very high. Cash-on-delivery makes it dicult for sellers to survive because there is no customer commitment to the same. As a result, protability is aected.

What changes/improvements are expected in 2013?The landscape will change. 2013 will be a milestone year for online payments.

How do you ensure security of cash in the mobile wallet in case of theft of the device?We use mulple factors for authencaon, including but not limited to: SIM cards unique idencaon Telephone(mobile) number Handsets unique idencaon User-dened PIN.


COVERSTORY`An Optimal E-commerce Payment Gateway would Use Security Measures as Strong as those Used by the Banking SystemsIn a country such as India that has more than 150 million Internet users, why are less than 7 million people buying online actively? Read on to find out

Varun Jha, Head- Marketing & Corporate Affairs, PayU India

For a country like ours which has a populaon of over 1.2 billion, more than 300 million having bank accounts and Internet penetraon which exceeds 150 million; only fewer than 7 million people acvely buying online is a miniscule number. What is even more disappoinng is that with over 30 million SMEs and around 5 million freelancers in India, fewer than 10,000 people sell online today. The truth is that the majority of populaon who is currently not transacng online has a reason to not transact online. In fact, people who can transact online tend to choose cash-on-delivery or payment-on-delivery if given an opon.

The present scenario does not dierenate between the large company and their smaller counterparts. KYC documentaon, payment gateway fees and other back-end integraon work make online payment gateways out of reach to a majority of small-sized merchants which fall into the category of MSMEs. This scenario needs immediate at-tenon and a lot of acon is needed in this direcon.

Also, considering the rate at which soware exports are growing, it is very important to know if you can receive and make payments in foreign currencies, as RBI guidelines make it tricky for some of the payment gateways.

The growing importance of e-commerce has made it really important for website owners to devise a payment service that is secured and quick. Payment gateway solu-ons allow a website to accept real-me payments from customers across the world. It oers the most secure and safest way for website owners to transfer their payments in a manner that is secure and quick. The growth of SMBs is aected by the payment mechanisms on their websites and the professionalism of the merchants.

Payment gateway should use security measures as good as those used by banking systemsIn the emerging online industry, consumer preferences drive sales and in this, the payment procedure plays a pivotal role. Consumer preference comes from the trust, convenience, security and promptness in making transacons. An opmal payment gateway would use

security measures as strong as those used by the banking systems to ensure data security and none of the informaon can fall in wrong hands. Even in the case of data breaching, the system is so strong that it destroys itself instead of shedding out the personal informaon of the users. In order to make the transacon quick and convenient, one-click checkout mechanism is used. It involves signing up with the payment gateway using idencaon and password and it saves users from entering the card number, billing address and other details every me they shop. Its important for businesses to choose an opmal online payment soluon which assists the website to deliver the best in terms of security compliance, convenience and ulmately increases the conversion rates.

Payment gateways deliver a complete line of soluons designed from the ground up to help SMBs automate and manage their payment acceptance and disbursement needs. They assist small business site owners and online merchants to tackle PCI DSS compliance. This is done by oering hosted templates that ensure that sensive cardholder data is stored, transmied, and processed by the payment gateway and not by the merchant. As a result, merchants can stay fo-cused on future business growth instead of website security.

In most cases merchants want to provide customers with the level of PCI security, but also dont want to let customers know that another player has entered the transacon proc-ess. This problem is solved with the link embedded in the checkout template so your customers do not have to leave the site during the checkout process to buy securely. This creates an ecient and secure transacon that meets key expectaons of the shopping experience.

The soware technology used by gateway providers al-lows businesses to keep close track of the sales and increase the conversion rates. Somemes, in case of a transacon failure, the website is not able to provide a reason for the failure. And its seen that more than 50% of consumers do not come back to retry the transacon in such cases. What a premium payment gateway does in this case is that it tells us-ers the reasons for the failure of the previous transacon. This results in a greater conversion rate for online retailers and also enhances the shopping experience of the consumers.


Want to get a taste of how an e-commerce portal functions without having to pay any license fees? Then check out these E-Commerce tools. Theyre also available on this months PCQ DVD for you to try out.

Compiled by Anil Chopra and Jayanta Ghosh

9 Hot Open Source Tools for Building E-Commerce Sites

Symphero: This one runs on Linux and other Unix-like OSs, supports mulple databases (MySQL and PostgreSQL), distributed object storage (in beta), markeng and aliate tracking capabilies.Zen Cart E-Commerce Shopping Cart: This is a PHP

based e-commerce shopping cart built on OScommerces GPL code. Its easy to setup, highly customizable, and can be run from your own webserver, thereby giving you full in control over its features and capabilies.

XOS-Shop E-Commerce Shopping Cart: This is an open source shopping cart soware, wrien in PHP/MySQL, and originally based on osCommerce.

PrestaShop: A robust, professional-grade e-Commerce soluon with a full-featured back-oce applicaon to man-age your online business, which includes inventory, orders, shipping, and customers--all in real-me.

VirtueMart: An Open Source E-Commerce soluon to be used along with the famous CMS Joomla.

Axis 0.8.7.2: A popular e-commerce tool based on PHP, MySQL, ExtJS, jQuery and the Zend PHP framework. It has features like a product catalog manager, products organ-izer, order management, customer mgmt, discounts mgmt, store stascs, and much more.

CF Shopkart 5.5 build 006: Heres a shopping cart ulity for the ColdFusion development stack, which is currently inacve, but mature enough to be used for online stores today. A few key features of the soware include mgmt. modules for products, categories, customers, orders, wishlists, support ckets, taxes, and payment gateways. Plus, there are modules for blogging, stascs, comment moderaon, product reviews, and much more.

Magento Community Edion 1.7.0.2 / 1.8.0.0 Alpha 1: Create advanced stores in just a few clicks. Spend more me entering product informaon instead of customizing HTML code. Theres an easy to use Permissions Editor so that you can create users for all your employees and then assign them to groups like Full Admin, Customer Serv-ice, Warehouse, etc.

VamCart 0.9: This soware allows users to easily install and run an online shop, without any technical knowledge. Built on CakePHP framework, the soware provides SEO, unlimited categories and products, Mullingual and Mul currency support, automac image resizing, coupons, product reviews, and much more.

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