Executive Briefings

Can You Hear Me Now? Faulty Logistics Services Hamper Growth of Ecommerce in India

You think you've had bad customer service buying products online - how about the guy in India who ordered his wife a Samsung smartphone, and the package arrived with only a brick and a bar of soap in it!

Can You Hear Me Now? Faulty Logistics Services Hamper Growth of Ecommerce in India

Online sales in India are booming, but unhappy customers like that husband are more the rule than the exception. Inadequate warehouses, lack of skilled and reliable workers, and too few planes mean online shopping in India is inferior to the shopping experience in the U.S. and China.

The man's rant was shared thousands of times as consumers complain of theft and damaged, lost or delayed goods from Snapdeal, Bengaluru-based Flipkart.com, and Amazon.com, India’s biggest Web stores.

The shoddy service is undermining efforts by Web merchants to build customer loyalty in a market in which sales could jump 70 percent, to $6bn, next year. “The customer can forgive you one time, but if it’s a repeated thing they won’t,” says Pragya Singh, associate vice president for retail at consultant Technopak Advisors.

The three weeks leading up to the Diwali festival in October, the start of the Hindu new year, were among the busiest periods in Indian e-commerce history. The demand exceeded the e-retailers’ expectations, resulting in servers crashing and goods selling out in seconds. “It’s like organizing a party for 100 people. You’re prepared for about 120 or 130. But if 300 people show up, then it’s a serious problem,” says Vijay Ghadge, chief operating officer of delivery company Gojavas, which ships packages for the three major retailers.

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Online sales in India are booming, but unhappy customers like that husband are more the rule than the exception. Inadequate warehouses, lack of skilled and reliable workers, and too few planes mean online shopping in India is inferior to the shopping experience in the U.S. and China.

The man's rant was shared thousands of times as consumers complain of theft and damaged, lost or delayed goods from Snapdeal, Bengaluru-based Flipkart.com, and Amazon.com, India’s biggest Web stores.

The shoddy service is undermining efforts by Web merchants to build customer loyalty in a market in which sales could jump 70 percent, to $6bn, next year. “The customer can forgive you one time, but if it’s a repeated thing they won’t,” says Pragya Singh, associate vice president for retail at consultant Technopak Advisors.

The three weeks leading up to the Diwali festival in October, the start of the Hindu new year, were among the busiest periods in Indian e-commerce history. The demand exceeded the e-retailers’ expectations, resulting in servers crashing and goods selling out in seconds. “It’s like organizing a party for 100 people. You’re prepared for about 120 or 130. But if 300 people show up, then it’s a serious problem,” says Vijay Ghadge, chief operating officer of delivery company Gojavas, which ships packages for the three major retailers.

Read Full Article

Can You Hear Me Now? Faulty Logistics Services Hamper Growth of Ecommerce in India