In India since 2005, phone commerce is disrupting brick-and-mortar commerce in similar ways as e-commerce did in the US since 1995. While all attempts at phone commerce at scale have been driven by getting a piece of the high-volume-low-margin 80% (Home Shop, Indiatimes Readers’ Offers, Naaptol, etc.), what has worked for them are actually the 20% products that are exclusively available by phone or the 20% markets where customers do not have convenient access to the product category. In other words, market access is the primary driver for the phone commerce business at this time rather than cost or convenience. Discounts and offers can drive trials and turnover, but market access is essential to drive repeats, word-of-mouth, brand, profits and therefore true value creation. The more the industry understands this essence, the more we are likely to succeed in the coming years.

In the process of helping brands and retailers create an alternate direct-to-consumer sales channel using the phone (via phone pe deal), we are exposed us to a diverse set of product categories, geographical markets and customer segments that help us learn the market. Brands and retailers that seem to be addressing the Heads business at the outset are only successful doing phone commerce as a Tails business. Those who understand the power of the Tails business are able to quickly scale it to monthly sales of 1Cr+, while those who are trying to force the Heads business are banging their heads against the wall while bleeding through the nose.

Admittedly, it is getting hard to not scratch the itch to build our own consumer brand, to practice what we preach, to snatch the whole pie of a large market. However, it requires us to focus on a specific consumer, specific need, specific product and all of that good stuff. As the wise man said: “focus is not about what you decide to do, it is about what you decide to not do”. We have been exploring a few options on the table to build a compelling brand, and with each attractive choice we want to make, there is a lesser attractive but attractive enough choice we do not want to let go. Something says, there is a way to create an institution that can do it all. Phone commerce at the core and many owned brands addressing many Tails.

In the recent past, consumer businesses worldwide have discovered the phenomenon of group buying. One deeply discounted deal on a product or service is made available to local consumers; if enough people buy within a set deadline, everyone gets the deal, else the deal is off. Just like one-click shopping and the social web, we believe that group buying is a great feature that many digital commerce businesses should incorporate in their platforms over the next few years. Chaupaati has taken a step in that direction by partnering with Brown Paper Bag to launch ThePotluck.in starting with Mumbai. To start, we will announce one cool deal in the lifestyle category every weekend targeted towards the hip & trendy Mumbai socialites. The launch deal on Friday, May 21 was FREE couple entry at Prive Colaba, one of the hardest clubs to get into in Mumbai. The deal closed at midnight on Sunday, May 23 with 43 coupons sold!

We would love to get your thoughts, opinions and feedback about this business; and products or services that can be offered at 50-80% off in return for an advance payment towards a minimum commitment. The current reach of ThePotluck.in is tens of thousands of elite professionals and business families in Mumbai, and growing virally every day. The idea is to catch the attention and grab the loyalty of these consumers with imaginative deals rather than use discounting to reach a different consumer set. If you would like to partner with us, get featured, advice us or participate in any other way, we would immensely value your patronage.

Enjoy ThePotluck.in - The weekend’s here, big deal!

Chaupaati team

In any case, this June Chaupaati will complete two years of our product going live. Like any startup, we made several iterations, added features, deleted features, adapted new technologies, changed business model, went through our lows, went through our highs, and everything else that would keep us alive. In essence, when the sun came up, we were running. (Note to self: Ask Kashyap to post a comprehensive note on our two year journey trying to crack the phone commerce scene.)

The reason I came out of my hibernation to post on this blog is this: the Chaupaati team is pretty excited with our new service offering - phone pe deal. (Well, it isn’t exactly new. But it really is newly packaged. Also, it should answer all questions on “how we do what we do” at one place). So …

phone pe deal is a service offering for exclusive brands who wish to create a direct sales channel across India over the phone and web. While brand reach through media and word-of-mouth is widespread, market reach is limited because of limitations of brick-and-mortar retail and distribution channels. phone pe deal is a way to fill that gap and acquire new customers in a risk-free and profitable way. Leading brands offering children’s products, magazine subscriptions and appliances are using phone pe deal to provide customers across India with a more convenient and accessible way to purchase their products from the comfort of their home.

Please visit the website and let us know what you think. Also check out case-studies on how brands like Amar Chitra Katha and Infomedia 18 are using phone pe deal. As always, we value your feedback a lot and are happy to hear from our users.

Hello people! We are happy to announce that all Infomedia 18 magazines now have a simple phone subscription mode. Now you can subscribe to all your favorite magazines like Better Photography, Entrepreneur, Overdrive etc. by simply calling 098-3333-1947 and completing your order on phone. The hotline number is also advertised on the eshop of Infomedia’s website and is powered by Chaupaati’s phone pe deal service.

Infomedia 18 magazines reach over a million readers per month through 40,000+ news-stands and outlets across 400+ cities. All issues carry the hotline number that helps their readers to subscribe on phone. Infomedia is India’s first magazine house to adopt and promote a simple phone based subscription system. So spread the word and subscribe through phone. And stay tuned for more such awesome announcements! Here are some of the many ads that flash our number …

First I learnt the value of customer feedback. In a business like ours where we do this 24*7*365, customer feedback is one of the foundation stones. If the customer is not happy your business can’t be doing the best it can. As a part of an exercise I called up some of our Amar Chitra Katha customers. And I was surprised to hear the feedback. Here’s an example:

Yashad (Y): Hello am I speaking to Mr. X?

X: Yes, who is this?

Y: Hello Sir, this is Yashad calling from Chaupaati Bazaar, do you have a few minutes?

X: Yes, go on.

Y: Sir, you ordered a few products from our website from ACK; I just wanted to know your user feedback.

X: I could navigate through your website easily; I found what I wanted and would like to tell you that your call centre guys are very good. They are very resourceful. They gave me every bit of information that I wanted.

Y: Anything else, sir?

X: No, I will keep shopping from Chaupaati. I like it.

Y: Thank you sir, have a nice day!

An interesting case was when I called up a lady and she said that she and her son both love ACK products. They own many of the titles that we have uploaded on our site, and so they visited our site to see if they could find the titles that they didn’t have. Interestingly the lady told me that she isn’t technologically savvy so she had her son sit on the computer and tell her what books he wanted to order! “It’s very nice that you have ACK in your catalogue, I liked shopping with you, will definitely tell all my friends that I have found a good place to buy ACK from.”

A third and perhaps most interesting of all the cases was from one of our abroad customers in Dubai.

“Wow

I got my order already today…..So quick and so efficient….SO EXCITED…..going to start reading them ASAP.

Thank you”

That’s the mail he sent, after our delivery reached him in 3 days instead of 15.

Phone commerce isn’t a simple to pull off. That’s the second of my learnings here. Imagine that you are ordering for a product via the phone and want it delivered to your doorstep. So we have to do everything from answering your call to getting you the delivery in good condition within the specified time. Try to mentally map the steps you may take while you do this. Once you have that in place multiply that several times and now you know the intricacies of the business. Well, try sending your next door neighbor a package via post. Once you have visited a DTDC or a Vichare you will know how tough it can get.

Putting together the machinery that does this seems to me like a hard nut to crack. Imagine that you have to get a catalogue from every brand, host a website, get permissions, upload your catalogue online, acquire a phone line, and set up a call centre to handle calls and you are done with only step one. Order processing and fulfillment are the other side of this coin. But the job has only begun here. You constantly have to get customer feedback and better yourself. Have I mentioned Sales yet? Okay, sales is the third part of this process, since we constantly get real time data from our call centre, we have to put it into an understandable medium so we can comprehend it and generate more sales.

Here we as designers, catalogue managers and sales executives have to think of each new idea in two ways. One from our point of view and secondly how the end user will think about it. This effectively doubles up our work load. We learnt about web designing in XIC but I never knew that what we do here in about a 100 times tougher than that. It’s not always about hyperlinking photos to static pages. We conveniently take that for granted as well. So in conclusion:

• Phone commerce is a very demanding business

• It is heavily based on customer feedback

• Getting your operations right is only part of the process.

So do visit our website www.chaupaati.in and give us your feedback.

Have I mentioned that I like what I do here? Well, for the record, I do. More on that later. Its time to get cracking!

]]> http://blog.chaupaati.in/2010/04/30/week-in-week-out/feed/ http://blog.chaupaati.in/2010/04/20/first-day-at-work/ http://blog.chaupaati.in/2010/04/20/first-day-at-work/#comments Tue, 20 Apr 2010 06:51:41 +0000 Yashad Kirtane http://blog.chaupaati.in/?p=142 Well, it’s good to say that I am finally employed now. Feels very nice, and even though I joined Chaupaati Bazaar only yesterday, the atmosphere here is very enriching. From day one itself I am already in the loop of all things. Being given updates on everything really makes me wonder how tightly knit start ups are. The calls have been flooding in and my new Chaupaati Id is beginning to complain about the HUGE stack of mails that have been flowing in from the second it was created. On one hand, seeing that almost bursting mailbox gives me hope that there is a bright future for me in digital advertising industry, but on the other hand it scares me seeing the volume of work that will eventually come to me.

As a part of our Digital Advertising module at XIC, we had done a campaign on Google Ad Words, but it was only yesterday that I realized that our seemingly pointless campaign helped Chaupaati convert our click through to actual sales figures. From yesterday I have begun to look at each and every suggestion that I make to the team very very carefully. Because now I know that every suggestion has the potential to be a successful idea and every idea can be converted into money. In addition to learning a new bunch of things that I did not know before, I have also been made aware of the fact that from this point onwards I am collectively responsible for running a part of Chaupaati. That is a good feeling. Plus Saturday and Sunday are my weekly offs!

It is good to work here, I have been able to make the most of it till now and I am given an opportunity to better myself every day. I guess I attribute my comfort at work to the entire team. Especially to Kashyap, Zishaan and Amit, all of whom made me feel welcome.

It was an awesome first day and I look forward to many more such days at Chaupaati!

This weekend, I took the time to watch Home Shop 18 for an entire hour on a Saturday evening and took a sneak peak at their 6 hours of original studio programming per day. The first 30-minute segment was fake gold and stone jewelery appealing to the sensibilities of housewives organizing kitty parties positioned as Satyanarayan pooja. The next 30-minute segment was a fake iPhone appealing to the sensibilities of the small town businessmen who travel extensively, use 4 SIM cards at a time and care about the status projected by a multi-touch phone with a fluorescent fish as the background. In both cases, it was not too hard to believe that they fulfill 6,000 transactions a day across 1,000+ towns of India. Mobile phones and jewelery also seem to be a departure from the purely niche and otherwise inaccessible categories.

Similar to the US, television reaches majority Indian households and the mobile phone reaches majority spending consumers. However, the Internet reaches less than 20% of spending consumers in India, compared to over 80% in the US. At the same time, consumer spending in India has increased widely and the penetration of retail malls and distribution network is lagging behind the aspiration to spend in smaller towns. Television creates a desire to buy certain products, yet the distribution network makes those products inaccessible. Along comes Home Shop 18 and fills this gap. Although a moving target, it is a large market considering the consumer base of 350MM+ representing 110M+ households. The phone is obviously an integral part of the eco-system since it gives consumers a way to connect with the business and makes the transaction possible, while the distribution network is integral because it completes the loop where brands and retailers have failed.

Home Shop 18 has now learned that they have unlocked a market for products that fall in the delta of media reach minus distribution reach, and even genuine brands are eligible within their model, if not more so. They are aggressively extending their catalog to include originals instead of fakes. Of course, the challenge is to reach targeted consumers for high value products, instead of mass consumers for high volume products. It is unlikely that a buyer of genuine products would watch the same channel, since she has been cognitively trained to switch the channel as fast as a mother stumbling upon a porn channel in the presence of children. However, it is possible to reach targeted consumers via the large network of private channels that are looking for a revenue stream beyond pay-per-second advertising. There is no dearth of genuine brands looking for reach through the barrage of private channels, if only their ROI risk was better managed. If Home Shop 18 can successfully bridge these two made-for-each-other needs in search for a business model, rest is clockwork and a short runway to the bank.

While entrepreneurs in small towns have figured out Home Shop 18 as a an alternative distribution channel that gives them opportunity to mark up and locally sell products to those who do not watch television, it re-iterates the value Home Shop 18 is creating as a distribution channel.

India spends Rs.10,000Cr a year on television, another Rs.10,000Cr a year is spent on print, and Rs.5,000Cr a year on other media (outdoor, BTL, online, mobile, etc.). The phone is penetrated across all consumers of this media and all consumers who are spending. Are there more “new retail” companies in the making who can address the same delta of media reach minus distribution reach? I would like to believe so.

One of the books recommended by a friend two years ago was Cosmicomics by Italo Calvino. Since then, I have been trying to get my hands on the book in Mumbai. Small bookstores like Granth and Danai in my area did not have it and couldn’t get it for me all this while. Large bookstores like Landmark and Crosswords did not have it and could not find it in stock at any of their outlets across Mumbai. Online stores like Indiaplaza and Indiatimes had no clue who Italo Calvino is. I finally found my copy on Flipkart.com. Found it the first time I looked, ordered it for Rs.561 and am halfway through the book in the following week.

Books are the killer category (arguably) that brought e-commerce to the world. After a decade of failed attempts in India to create an online business for books, along comes Flipkart.com and makes it happen. At the time of writing this, I estimate that they do 40,000 transactions a month at an average selling price of Rs.500. Why did this work now and not in the last 10 years? More Internet penetration - No. More book enthusiasts - No. Past entrepreneurs were stupid - No. Better recommendations & reviews - No.

When you Google a book, you will find it on Flipkart.com. When you land up on Flipkart.com, you will get a certain comfort about the site, about the offer price and about the delivery time-frame. Once you give it a shot and have a good experience, you will go back to it once again when looking for a book. After successive positive experiences, you will tell your fellow readers about it. Millions of such chains are being fanned out. Flipkart.com simply created a comprehensive catalog, made it easily accessible online, gave you all information you needed about the book and nothing you didn’t, did enough to win your trial at the risk of losing a few hundred rupees, then delighted you with the experience to create a habit of coming back.

Indiaplaza, Rediff, Indiatimes and all other past online book stores tried to replicate the in-store format of taking the highest moving books, giving it prime real estate, deeply discounting them, and then grabbing a small part of the funnel for temporarily high moving titles. As a regular reader, you could not find what you were looking for. As an impulse reader, you would decide to read what the store wanted you to read every once in a while. The limitations that made book retailers unprofitable, became precisely the reasons why online retailers did not scale.

It’s heartening to see that simple things done right still result in scaled businesses, even in India. Flipkart addresses an interesting niche. As it expands, it will hopefully not get carried away, be mindful of its customer base and try to sell more things that that customer segment needs. It should also be deliberate about maintaining the same levels of service in other categories it enters where timely deliveries are easier said than done. At Chaupaati, many of us are fans of Flipkart as customers as well as entrepreneurs. We look forward to learning more from this cool company and these phenomenal entrepreneurs.

Phone is not Internet

A phone is meant to access people. The Internet is meant to access information. One may be used as a proxy to the other, but it is important to understand the difference in consumer expectation to enable that proxy. While the phone can be a medium to interact with a digital platform that is always accessible wherever you are, it is different from the Internet. Using the Awareness-Intent-Desire-Action model of consumer behavior leading to a purchase decision, let us contrast how the two media compare. Both phone and Internet are interactive media and best used for Awareness creation on pull rather than by push. The Internet is great for high-involvement information browsing and okay at visualizing, making it a good medium to convert Awareness to Intent to Desire. The phone is pathetic for this purpose. The phone is great at providing comfort from human interaction and clarifying nagging doubts at the moment of truth, making it a good medium to convert Desire to Action. The Internet falls short here.

There is a Unique Reason

Popular myths: (a) If it sells in the store, it will sell on the phone. (b) If it sells on the Internet, it will sell on the phone. These are both dangerously wrong inferences. Wrong because there are several counter examples. Dangerous because they are half-true. A new medium must offer a unique benefit for people to break away from current habit. This benefit must be compelling enough to drive the change in behavior. Multiple successful behavior changes will eventually drive a habit change. Every order by phone is triggered by one or more of these benefits: not near Internet, special order requests, need clarification, not available at my stores, don’t know where to buy, it’s a secret, want to negotiate, want convenience, have deadline, want home delivery, getting a great deal, etc. It will become a habit only after multiple orders. Before that happens, transactions will not happen just because people want to buy.

Medium - Product - Consumer

Popular myths: (1) Television and print are the best ways to advertise products meant for ordering by phone. (2) Gifts and durables are the killer categories for phone commerce. (3) Businessmen in tier 2 urban areas are most likely to buy over the phone. In each case, the incorrect conclusion is that a medium, or a product, or a consumer is best suited for phone commerce. In reality, it is correct to draw conclusions only on the combination of media, product and consumer. Media bias: Housewives will purchase jewelery as seen on TV, but not as seen in a newspaper. Product bias: Parents will purchase children’s comics they browsed online, but not textbooks. Consumer bias: Nagpur shopkeepers will purchase dual-sim mobiles advertised on hoardings, but Mumbai shopkeepers would not. It is the combination that works or does not work.

It’s a Platform, not a Call Center

Just as an Internet business is not just a website, a phone business is not just a call center. Anyone can set up a call center, just as anyone can set up a website. But outsourcing a call center or website design capability is a different business from offering a platform that enables a new consumer service. What defines an Internet or phone business is the product or service it offers, the experience it provides its customers, and the way it fulfills its promise to the customer. Websites and call centers with a strong catalog, good usability and impeccable fulfillment are more than just websites and call centers. Business success relies on understanding the customer need and building an entire organization, product platform and fulfillment network to fulfill that need.

Chaupaati’s mission is to aggregate the commerce between consumers, unorganized businesses and brands in India, and make it easily accessible. We are doing this by working with leading Indian consumer brands and retailers to build out a direct-to-consumer channel in books & magazines, home appliances, computers, mobiles, education, gifts, automobiles, retail, FMCG, consumer services and other verticals we have not discovered yet. If you know of someone who shares our vision, please let me know at kashyap@chaupaati.in. In the meanwhile, enjoy phone pe deal at 922-222-1947.

Videocon Group is a $2.5 billion global conglomerate, and is one of India’s largest manufacturers and suppliers of consumer electronics, home appliances and power products. Videocon’s extensive network of distribution and logistics ensures delivery in all major Indian cities with direct warranty from the manufacturer. Since the product is directly sourced from the company, customers get great discounts for the products of their choice. The customer support and after sales service of Videocon is offered for all products purchased through Chaupaati.

The products on offer through Chaupaati include entertainment products like LCD TV’s, Color TV’s, DVD players, audio systems & home theater systems; home appliances like air conditioners, refrigerators, washing machines, inverters and geysers; and kitchen appliances like microwave ovens, mixer grinders, multi processors, rice cookers, toasters, irons.

Chaupaati’s mission is to aggregate commerce between consumers and businesses in India and make it easily accessible. Chaupaati is a phone commerce company that helps Indian businesses and consumers buy and sell products by phone. Chaupaati helps leading consumer brands build a pan-India direct-to-consumer phone commerce channel using its flagship service Response Process Outsourcing.

With this partnership, Chaupaati and Videocon hope to make a range of durables easily accessible to consumers all over India, through the convenience of the phone. Call 922-222-1947 anywhere in India to find the products and deals that are right for you.