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Tips on building an e-commerce site

Rediff On The Net Chairman Ajit Balakrishnan presented the fourth session's fourth track on electronic commerce.

Balakrishnan shared his experiences of setting up India's first e-commerce site, The Rediff Shop. He dealt mainly with the 'business-consumer' aspects of e-commerce.

Strategic decisions are required to be made for selection of shopping software technology, he said. Rediff chose a solution from IBM. Balakrishnan warned that here it would be best to buy a good proven package rather than attempt to develop one at home.

The product market decisions needs to be carefully considered. Whether to host the site oneself, use a third-party host or be embedded in a portal is a decision to be made, he said.

The delivery logistics too deserve arrangement and planning. Store design tools like style templates, creation of data files, support for unlimited product categories, and product search are crucial.

For instance, the Rediff bookstore has 100,000 titles and about 5,000 to 6,000 titles are added every month. Any delay in search would affect business very badly.

Proper customisation for navigational controls is necessary. There must be provisions for support to individual products.

Order-processing, customer-tracking, supplier-chain management email confirmation capability and an advanced reporting model for sales reports, site reports etc are aspects to be considered while looking for an effective shopping software.

For security support, Rediff chose the 'SSL' technology as it requires only the merchant or seller to provide the digital ID of the server.

Financial and legal risks exist but it is futile to expect government to legislate and secure the system, felt Balakrishnan. The business model itself should be such that it minimises commercial risk to the maximum level possible.

Domain name issues could be a serious problem and an e-commerce site builder must be wary of this.

Information security is another crime to be considered. For a successful commercial site, technology is not the main issue but the capability of capturing the attention of the consumer and generating traffic to the site and thereafter ensuring smooth logistics. Getting repeat customers is the key objective, he said.

Electronic Shopping would probably be most amenable for convenience goods where customers do not feel the need for 'touch and feel' of the product. These include travel, PC hardware, software of established brands and gifts, flowers and greetings.

Rediff works with several partners and with individuals who have interesting application ideas. Here co-branding is a preferred mode and heavy investment is made for growth.

It takes at least three years for a business in India to break even and promoters of e-commerce sites should be prepared for it, Balakrishnan concluded.

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