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A Look at E-Commerce in India: How MartJack Helped Offline Retailers Go Online

December 30, 2012

When Indian software company eReasoning built MartJack in 2007, “most offline retailers in India were not tech-savvy,” says founder Abhay Deshpande.

“We thought we should create a platform that would allow small and medium-sized retailers to enter into e-commerce and sell anything they wanted, without knowing a lot,” he explains. At the time, India’s e-commerce market was worth an estimated $1.75 billion, and users didn’t understand the concept of “software as a service” (think Google Apps). “They wanted software, and a service,” he laughs.

Today, the e-commerce market in India has grown to an estimated $10 billion, and MartJack is a leading player in the space. The critical step that helped them scale was building a fully integrated solution in 2009, Deshpande describes.

“The four pillars of e-commerce are technology, logistics, payment, and marketing. For logistics, we integrated with Aramex, and for payment, we initially partnered with HDFC Bank (one of India’s largest). On the marketing side, we partnered with Google, who provided analytics to retailers, and demonstrated that they could use AdWords to drive traffic.”

As for the technology, they built a completely custom platform, that, unlike others, did not use well-known open source e-commerce software Magento, potentially making customers more dependent on MartJack for technical support.

Once the platform launched, MartJack did what any services startup hopes to do- they signed a couple of major retailers, and then used their stories as case studies to demonstrate the platform’s abilities to other offline retailers. Today, over 2,000 brands in India are using the platform, “from leading retailer Future group to small retailers in Hyderabad.”

In India, these are still early days, as the e-commerce industry is set to boom further, perhaps reaching $260 billion, by 2025, according to a report by First Data Corporation and ICICI Merchant Services. Credit card penetration in the country is increasing, says Deshpande, but 40-50% of Martjack’s transactions are still done using cash on delivery, through Aramex. Return rates in the Indian market can generally reach up to 40%, unless retailers follow up extensively with customers, he estimates.

Although the platform has integrated with 79 payment options throughout India, payment has remained the biggest challenge to date. “Infrastructure needs to improve,” says Deshpande.

This makes India sound a bit like the Middle East, where MartJack hopes to expand, and where it will come into competition with integrated Magento-based platform (and Wamda Capital portfolio company) ShopGo (whose founder has written about e-commerce SEO, gaining referrals, and customer segmentation on Wamda). Thus far, Martjack has brought over a dozen customers on board in Dubai, and is looking to leverage its emerging market experience. “The Middle East market now is similar to where the Indian market was in 2007. People are talking about e-commerce, but many are still on the fence.”

In another one or two years, he says, “we should see a tipping point in the Middle East.”

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UAE missing out on a billion dollar e-commerce trading

Source: www.thenational.ae

The UAE is missing out on the US$680 billion (Dh2.49bn) global e-commerce industry, with just 5 per cent of businesses transacting online.

The majority of businesses in the Emirates do not sell products on the internet, and only 11 per cent make purchases via the Web, according to a survey by the Telecommunications Regulatory Authority (TRA).

That comes despite 44 per cent of UAE employees routinely using a computer at work, according to the survey.

"What is very low is take-up of e-commerce - online trading, buying and selling," said Fintan Healy, the executive director of regulatory affairs at the TRA. "A high degree of employees use computers at work," he added. "There seems to be a bit of a disconnect there."

The TRA's survey, conducted earlier this year, found that 95 per cent of businesses did not use the web to sell products or services. Low uptake of internet commerce means that UAE businesses are losing out on a multibillion global industry. According to JP Morgan, global e-commerce revenues are forecast to grow to $680 billion this year, up 18.9 per cent from 2010.

The retail ecommerce industry is valued at more than $150bn a year in the US alone, according to the digital-data provider comScore. Sites belonging to the retailer Amazon received visits from more than 282 million visitors in June - or 20.4 per cent of the world's internet population, comScore said.

Mr Healy said the low uptake of e-commerce among UAE businesses was out of line with both the Government's 2021 development plan, and Abu Dhabi's Economic Vision 2030. "Both focus very heavily on a knowledge-based economy with these services," he said. "That's something we have to consider very carefully: What is the role of the TRA going forward as a facilitator and enabler."

Despite UAE businesses having failed to embrace e-commerce, more and more consumers are making purchases online. According to the media agency Omnicom Media Group (OMG), 49 per cent of UAE internet users have already made purchases online. That compares to 41 per cent in Saudi Arabia and 35 per cent in Qatar. In the GCC, the most popular purchases on the web are airline tickets, electronic devices and computer software.

Dimitri Metaxas, the regional executive director for digital at OMG for the Middle East and North Africa, said he forecast greater uptake of e-commerce in the future. "Roughly half of the UAE internet users are saying that they have purchased online, which is a big jump from two or three years ago, when it was 20 to 25 per cent," said Mr Metaxas. "I'd say that in the next coming two to three years, we could see that jumping up to 70 per cent." While UAE consumers may be using e-commerce sites more, these are mainly global sites such as Amazon.com, rather than local players. Mr Metaxas expects "a dramatic increase" in local ecommercestart-ups, such as the Middle East and North Africa travel site Joob.com, and the online store Nahel.com. Historical barriers to greater uptake of e-commerce in the GCC has been the reluctance to use credit cards and an unclear postal-address system, Mr Metaxas said.

YousefTuqanTuqan, the chief executive of the digital agency Flip Media, based in Dubai, said that online marketplaces such as Souq.com work well because they were tailored to the local market. "The creation of relevant, vocal e-commerce businesses is a big part of it. If you look at something like Souq it's not an Arabic eBay - it's a very uniquely Arabic company, in terms of how they offer their products."

The growth of "daily deals" sites such as Groupon, GoNabit and Cobone in the Arab world had also acted to boost acceptance of e-commerce, MrTuqan said. "They are actually helping make Middle Eastern consumers more sensitive to e-commerce, and less fearful of it."

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MartJack enables the first ever virtual store in the UAE

Source: Khaleej Times

MartJack with its’ years of experience in the field of e-commerce has tied up with TechLink to initiate UAE’s first ever virtual store.

The future of retail is here. “UAE’s First Virtual Store has opened in Dubai,” said Mohammed Shameer, MD Techlink Systems.

The store will be located at The Mall of the Emirates metro station and will be rolled out to across all major metro stations in Dubai.

Major brands like Acer, Apple, Dell, HP, Kaspersky, Lenovo, Norton, Prestigio, Samsung, Toshiba, and many more are available. A unique QR code which shoppers can download onto their smartphones, has been assigned to every single item which enables consumers to purchase their selected product.

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Virtual Store concept already a huge success in other parts of the globe

Source: Adverblog
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About TechLink

Techlink System LLC was founded as a trade entity in Year 2000 in Dubai, UAE. From its modest beginning as a shop-in-shop outlet.

Techlink System gained its growth momentum steadily in the initial phase. This phase set the pace for Techlink’s ambition and vision to grow into a retailer in the supply of IT products. The market was nascent and the scope was immense to grab the opportunity in the emerging economy. Techlink utilized this phase to study and explore the region for growth possibilities and focused on expanding its retail operation across UAE, Oman, Qatar, Kuwait and India.

From one small format retail outlet, Techlink systems, now has 19 retail outlets housing more than 5000 sq ft retail space, employed 200 strong work force, retailing more than 50 brands across 7 markets. The company now has 3 warehouses spanning 5000 square feet, 3 service centers in support services make Techlink a strong IT retailer entity across its geographical territory.

In line with Techlink’s customer-centric business acumen, from a stepping stone in the retail landscape, Techlink System has grown rapidly to the distribution sector, project supplies and corporate sales. A significant share of the Techlink revenues comes from the volume business from the secondary operation.

About MartJack

Reasoning is a digital commerce centric company that develops platforms & solutions to enable businesses to leverage the immense capabilities of the Internet and mobile platforms as powerful customer acquisition, customer connection and marketing channels.

Reasoning was started in May 2007 by a group focused on the retailing industry and is currently head-quartered in Hyderabad. With a highly motivated team of 120+ people with expertise on digital commerce, online marketing, e-commerce, online customer acquisition, software development, cloud based services, web technology etc., Reasoning has established itself as a thought leader when it comes to provide solutions for creating & managing online stores & other digital commerce businesses.

Martjack, a comprehensive multi-channel retailing solution, from Reasoning,enables retailers, manufacturers and other businesses to easily establish & manage their online stores. MartJack enables businesses to -

  • Establish online store‐fronts or websites quickly & at a low cost.
  • Update and promote their online stores without having to maintain an expensive IT infrastructure.
  • Drive consumer demand via the Internet and mobile phones
  • Enable complete e-commerce experience on their websites
  • Accept payments from end-customers in an efficient & secure way
  • Ship products cost effectively and reliably

The Concept

Techlink’s unwavering focus has been on business transformation with matchless innovation in providing unmatched retail experience. Techlink has leadership position in IT retail convenient format that provides transformational IT solutions because of its core capabilities, great human resources, commitment to quality and infrastructure to deliver a wide range of technology. We have robust supply chain infrastructure that supports our ability to get the right products to customers. We implement the right types of software, process and supporting technologies to simplify the processes involved in creating our retail mix a blend of flexibility and consistency. Because price remains king in the battle for customer, cost control is essential to maintaining profitability. We live up to the customer’s expectation for the wide variety of the latest styles and brands, requiring precise management of lead times that eliminate wasted time and excess inventory. Techlink retail store is the best place to test –drive and explore products. Our specialists answer questions and help to get know the products. Personal Setup gets running on the new product before the customer leave the store.

TechLink’s network of shops, have become one of the most trusted brands the region. Now, they reasoned, is to expand their online sales rather than spending a lot of money opening new shops.

  • There were 5,859,118internet users in the UAE (representing 70.9% of the population) in mid-year 2012 (June 30, 2012), according to Internet World Stats.
  • This was up from 3,555,100 at year-end 2011.

As Dubai has a strong concentration of the smartphone user base, it made sense to look at mobile shopping as much as websites for desktops.

  • 70.9% of the entire population in the UAE are online

Just like everybody else, people are busy at home and tired after a long day at work; so offering the opportunity to shop while doing something else has a lot of value. TechLink settled on commuters waiting for their train: they have time on their hands and the must have jobs, so they’re likely to have money but little time.

Rather than expect them to search through menus labelled with tiny text that says such unattractive things as ‘fish’ or ‘homeware’, they plan to plaster the glass walls of subway stations with pictures of their products, laid out just as they’d be in a traditional shop. The ‘shelves’ featured QR codes - squares filled with a black and white pattern, unique to the product in question, they’re a more versatile successor to the bar code - which could be scanned by the traveller’s mobile phone, building up a shopping basket in the few minutes before the train arrives. If your train comes before your basket is complete, you can carry on shopping without the pictures and codes if you wish.

Deliveries are arranged to arrive in minutes or hours, rather than days, so the groceries will be in the shopper’s kitchen that night and there is no need to wait in to collect them.

The e-portal will be developed by MartJack, an online commerce technology group.

Execution and Future Plans

The TechLink Smartphone App powered by MartJack, which customers need in order to shop at the virtual store, is estimated to be the number 1 shopping App in Dubai, within a year of its’ launch. As per reports from other parts of the globe on similar shopping models, it is observed that the majority of orders are placed between 10am and 4pm, while people are on their way to and from work.

TechLink believes, the growing trend in Smartphones in Dubai means that virtual grocery shopping is even more accessible and convenient than ever before. The first virtual store in The Mall of Emirates should be a great success with customers and will pave the way for the opening of these new stores at bus stops. As per study, it is found that it most popular amongst 20 to 30 year olds, so the new stores will be strategically located closer to a local university and other pedestrian areas.

MartJack News

GCC Retail Industry Overview

Retail industry in the GCC has gone through a complete evolution in less than 4 decades. The transformation has made the retail industry recognizable across the globe and has highly impacted international retail chains’ businesses to the extent that major GCC corporations are today buying out well established global brands. The evolution was achievable through the hard work and visions of the founders of the GCC countries who have built business empires that laid the foundation of what the GCC has become in modern day.

Having witnessed exponential growth over the past few decades is a true affirmation to the adapting of the GCC countries to think globally, act locally. The retail industry in the GCC started in reality from the days of the “baqalas” and transformed into the mega malls of today. Local businesses that were built in the 70’s/ 80’s have today become recognized brands on a global level. The local laws of limiting foreign ownership to maximum 49% meant that international companies could only enter the lucrative GCC market through local partnerships, thus, the concept of franchising exploded through the 90’s and well into the millennium. Global franchises have even launched new concepts globally in the GCC before any other region.

GCC retailers have reached geographical presence to reach as far as the European, Far East and North American shores, building retail empires that have only become possible with the accomplishments and learnings of the past decades. To outsiders, the GCC retail industry is still in its infancy stage due to the late adaptation of the digital technology within the spheres of multi-channel retailing. However, the late blooming is not a testament of what the population represents in technological exposure, as research and data points to the GCC as having staggering internet penetration that is only comparable to the most developed nations, with mobile penetration at almost 150% (smartphones as high as 70%), new sign ups on social media at the highest global levels per capita.

GCC retailers do not lack the hunger for going digital, as their evolution in the past decades have proved that they have become global players and adapted to the local market requirements, but what they lack is guidance and education by offering them technological solutions that do not require rocket science, technology that does not require exuberant investments, because these are all part of the past. In today’s technological advances, we are able to pay with our mobile phones at points of sale through NFC technology, or by scanning QR codes to collect and redeem points on the spot.