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Sambhar Mafia - Cooked To Kill!

Thursday, March 09, 2006

Travel segment dominates e-commerce spend

A recent report about the online spending trends in India indicates that the travel segment is way ahead of the other segments. Although railway and air ticket bookings constitute close to 60% of the total online spend, the hotel industry (a related segment) has not cashed in on the boom. My understanding is that the hotel industry is still following the booking system they used in the pre-internet era. Further, with a huge supply constraint in the hotel sector, there may not be too many last minute deals (in online hotel reservation sites) that might be appealing to the travellers.

K Vaitheeswaran of Fabmall said in a recent interview that he wants Bangalore to get more congested so that more people will order online. It would have been better if he had talked about the benefits of online shopping (like cheaper prices) instead of hoping that the traffic congestion and lack of infrastructure works to his benefit. The boom in multiplex and malls can actually work against players like Fabmall, as people might want to go out and experience the new retail culture that is taking shape.


  • Well written, Kaps..your POV of Vaitheeswaran shooting his mouth off re: Bangalore infrastructure going down!

    By Anonymous Ravi, at 7:23 PM  

  • Hmm, electronic gadgets at 10%. iPod (and the likes) seem to have made it big !

    By Blogger Jayan, at 1:01 AM  

  • I myself remember using ecommerce mostly for train and air tickets. Other than those 2, online gifting was probably the only other thing that I did.
    BTW, Kaps.. I have enabled XML feeds as blogger allows that by default. Will chk on how to enable RSS.

    By Blogger Rubic_Cube, at 8:59 PM  

  • Hi

    One reason is that Railways is a single organisation and airlines too are limited compared to the more fragmented Hotel Industry. And another is Railway booking is meant more for Indians and the considering the queue system etc. The Internal travel Industry as such depends more on home stay (at relatives) and only just picking up on Hotel accommodation. IMHO


    By Blogger SLN, at 2:39 AM  

  • Maybe it's a cultural thing. We need to talk to people. Just like you don't need a map/directions to travel around in India. You can stop and ask a person at any street corner for direction. Similarly we love to haggle and touch and feel a product at a shop.

    And most importantly, I think it is the question of quality and trust.

    Anyone who has bought stuff online can tell you that good delivered by the postal department is tampered. And if it is an international purchase, some moron has already opened you parcel.

    Probably, the only way to increase the use of online services is to improve quality of service. And that will take time and a lot more evolution in the the Indian market place.


    By Anonymous SloganMurugan, at 11:39 AM  

  • @Ravi,
    there are no traffic jams in the US and still e-commerce is booming. these guys should dispel public fears about usage of credit cards and push e-tailing in its own merit rather than hoping that the infrastructure will deteriorate.

    I thought iPODS are still cheaper overseas and people ask their friends and relatives to buy it for them.

    @Rubic Cube,
    thanks for enabling RSS feeds...have subscribed to it.

    i agree that the hotel industry is fragmented.....but we don't have popular sites that are dedicated to hotel industry. Even if they exist, they have not caught on with the public.

    @Slogan Murugan,
    i agree with the point that the postal department tampers with the packages. with most e-tailers using couriers (which means higher costs), one can be a bit more assured that the shipment will reach safely.

    By Blogger Kaps, at 4:15 PM  

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