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Telco biggies line up portals to sell products

Wednesday, 11 June 2014 - 7:35am IST | Place: New Delhi | Agency: dna

Tata Docomo has launched e-shop

As more people prefer shopping online, telecom service providers are rolling out dedicated e-commerce portals to sell their products and services.

This comes in a backdrop of the e-commerce market in the country itself is heading towards consolidation as seen by the $3 billion acquisition of Myntra by home grown Flipkart.

While Tata Docomo has launched an e-commerce portal -- e-shop – where consumers can surf and buy products and services personalised according to their respective circles, Bharti Airtel and Reliance Communications too have similar plans.

Under the "shop" segment on their website where customers can look out for plans best suiting their requirements and place their orders.

"There are large number of consumers who are coming online and researching for a product online. From a business perspective it would be ideal, having chosen the product why not actually give them a platform to buy the product," Praveen Gupta, head -digital business at Tata Docomo told dna.

Asked about why did the company plunge into this space when most of the major players are either consolidating or giving different agencies or companies the task to sell their products online for them, Gupta said that the business model of these companies and Tata Docomo is different.

"They are consolidating primarily because their business model was build on valuation and not on growth. Their strategy to get customers to their site is aggressive marketing which is extremely expensive," he said.

"The difference between them and us is really two-fold. One is that we do not have to invest that marketing dollars. From the existing channels of communication, I have put up an outdoor. If I have to say that you can buy the product online, I just need to make my outdoor work harder. Same thing applies for TV advertising," Gupta said.

"So unlike them who have to invest huge amount of advertising dollars in terms of being able to drive traffic, we don't have to do that entirely," he said.

The company has identified top 50 towns of the country including all the metros.

It sells pre-paid connection, post-paid connection. The plans are different in every circles. The company plans to garner approximately 10% of the sales from e-shop and develop it as a primary high value customer channel.

It offers cash on delivery as well as online payment options. However, since the activation of a connection takes stipulated amount of time they do not offer single day delivery model unlike the sector biggies.

"We verify the customers documents and then hand over the products to them," Gupta said.

According to Internet and Mobile Association of India, the domestic digital market is expected to experience a higher growth this calender year on the back of better internet penetration, increase in trust level and pricing advantage.

They, however, do not have an exact estimate of growth so far and are still in the process of collecting data.

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