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Random Musings

Why eCommerce is eventually going to eat up all brick and mortar businesses in India

I recently bought a mattress for our guest bedroom. My first offline purchase in many months. A mattress is something that you need to touch, feel bounce on before making a purchase. And hence, we went to a nearby mattress place and after checking out a number of options, settled on one.
We could have easily walked out and purchased it online – but my conscience wouldn’t let me. So we made an order.
The guy asked me to pay half the amount as advance — in cash. I did.
What followed was a series of back and forth – calling the guy, checking with the delivery schedules. Canceling plans to wait at home and the delivery not showing up.
What was promised to be delivered on Monday, was delivered after a lot of following up 4 days later.
Worse was that the guy refused to give me a legitimate bill. He made excuses. He finally told me that his CA was away and when we will be back, he will issue me a tax invoice. I paid the entire amount in cash. After having such a tough time just getting the goods delivered, it would be foolish to follow up on a bill.
That’s where I think eCommerce really shines for me.

Not having to deal with another human for purchasing something

You look up things online. The marketplace makes prices competitive – removing the entire point of haggling. You click a button and the goods are delivered in a timely manner with all legalities in place. Without ever speaking to anyone.
Hell, you can even start your own store, use Shopify to setup your shop – and start selling your own goods. All without speaking to anyone.
Technology keeps people honest. It keeps the contract binding.
I think that is the most important aspect for me and many people like me. And that is why I think eCommerce and every single experienced eCommerce development company will eat up all the brick and mortar businesses in India. It is not simply because eCommerce is painless (which it is) – but brick and mortar businesses are, as a friend put it, hitting their foot on the axe!
This blog was originally posted on my LinkedIn Account.

Why owning a second car doesn’t really make much sense …

The title of my post says it all… Before we start, there are some assumptions to this statement.

The assumptions are as follows:

  1. Your are living in a Tier 1 / Tier 2 city in India which has decent Uber / Radio Cab connectivity (Have heard good things about Meru as well See Update 2 below).
  2. You use your car as much as an average person does – say about an hour or so a day.

Let’s pull out our calculators for this one…

Step 1: Determining the cost of ownership of a car in India

  1. Some used or new car (average make): Rs. 5,30,000.00 (A). This, again, depends on what kind of car you are looking for.
  2. Lifetime of a car: 7 years (pretty decent estimate)
  3. Fuel expenses (considering diesel without inflation): Rs. 2,000 per month (on the lower side)

    Cost over 7 years: Rs. 1,68,000.00 (B)
  4. Car Auto Coverage Insurance (considering Rs. 10k avg per year): Rs. 70,000.00 (C)
  5. Car Maintenance / Servicing: (Rs. 10k avg per year): Rs. 70,000.00 (D)
  6. Change of tyres (twice in 7 years @ Rs. 3,500 per tyre): Rs. 28,000.00 (E)

Let’s add all this up: Rs. 8,66,000.00 (T = A+B+C+D+E)

Cost of owning this car / day over 7 years: T / (365 x 7) = Rs. 338.94 per day.

Please note that these are fairly conservative estimates. The cost here will be somewhat higher due to:

  1. Rise in the cost of fuel over the years.
  2. Not considering the amount you may need to pay for parking in your society (going rate in Pune is 1.5L – 2.5L per spot)
  3. Not considering the loan that you probably need to take to buy a car @ 15% pa. (you will end up paying an additional 2L interest over a 7 year loan period).
  4. You may not want to get an average car but a more expensive one. (Add the difference in costs accordingly.)

(Adding these expenses will take up the cost of your car to about: 8.66L + 1.5L parking + 42K fuel inflation @ Rs. 500 extra pm + 2L for loan = Rs. 12.58L or Rs. 492 per day over 7 years)

What this means is that everyday your car is sitting in your garage, you are wasting Rs. 340.00 – Rs. 492.00 per day.

I am going to consider the case in which you need a second car for your spouse to go to work.

(My office is around 8 km from home and hence my fuel costs are Rs. 2k per month approximately. If it were further, fuel costs would go up accordingly)

Also, most folks I know – use their second car even more sparingly than this particular use case.

Step 2: Let us consider the alternative: Uber / Ola Cabs / Meru / Other Radio Cab Services (See Update 2)



This is what I would pay one way to travel from my house to work.

Uber - Pune 2014-10-08 00-02-17


So: Rs. 120 one way. Rs. 240 both ways per day.

Assuming that I don’t need to use my car to travel on the weekends (Sat, Sun) my expense turns out to be:

  1. Per week: Rs. 240 x 5 = Rs. 1,200.00 (W)
  2. Over 7 years: W x 52 weeks x 7 = Rs. 4,36,800.00
  3. Cost of travel per day (over these 7 years): Rs. 170 per day

    i.e. I will be saving 340 – 170 = Rs. 170 per day just by not buying a car and using Uber instead.

In addition to this, the benefits of Uber / Similar services (over driving your own car are):

  1. You don’t have to drive a car.
  2. You get a nice, air conditioned, chauffeur driven mini-sedan (UberX has Sedans).
  3. No worries of filling up fuel, getting your car insured every year, PUC, serviced and maintenance.
  4. No more driving around for hours – looking for parking.
  5. No worries about someone hitting / denting / scratching your car while driving / parking.
  6. You can use your travel time to catch up on that extra level of Candy Crush instead of cursing those taxi and rickshaw drivers.
  7. With a little pre-planning, you can use your other single car between yourself and your spouse in most occasions. Saving on money and the environment by carpooling.
  8. The extremely satisfying feeling that you get when you press a virtual button on your phone and a car magically appears in front of your door cannot be beat. The magic of technology!
  9. Let someone else worry about getting you through that rush hour traffic – while you sit comfortably behind playing Candy Crush.
  10. Did I mention you don’t have to drive a car anymore?

Isn’t this all worth it? Not only do you save 170 bucks a day (Rs. 62,000.00 per year), you pay only when you travel. So if your travel needs are more infrequent – say for example, you need a second car only 2 – 3 days a week, your costs will come down even further – to about 80 – 100 bucks a day (or 60-70% cheaper than owning a car).

Step 3: So what is the hold up?

Sigh… There always is a catch isn’t it?

In this case, there are a couple of them:

  1. Uber isn’t as widely available as I would like it to be – and this will still be in only Tier 1 / 2 cities for sometime.

    Most of the times, it takes me between 10-15 mins on an average to get a cab (after pressing a button on my phone).

    Depending on your address in Pune, it could take you longer (20-25m). So a little pre-planning is required. However for the popular areas (camp / Viman Nagar / Kalyani Nagar / Koregaon Park / Aundh / Station / Airport / etc. – cabs arrive in between 5 – 8 mins which is not bad at all).
  2. You would be dependent on public transport / rickshaws – incase Uber cars are not available tomorrow.

    So you cannot depend on them a 100% yet – but with a little pre-planning, you can get around it.

In the end, I believe it is a lifestyle choice – something that we are very interested in trying. The economies make sense and the convenience makes so much more sense. If only the service grows and has enough drivers – then we’ll be talking.

Step 4: Get your first ride free – on me – worth upto Rs. 300.00

Just because you have read this post so far, your first Uber ride is on me. The coupon for the Rs. 300 off is: ubersaurabhj

Download the App on your phone (search Uber on the App Store, Google Play Store or Windows Phone Store), sign up (most debit cards and all credit cards work), hit Menu > Promotion and enter this coupon.

Update 01 – 08-Oct-2014

Gaurav pointed me to two interesting resources related to my blog post:

  1. An interesting discussion on hacker news.
  2. A blog written by Sam Altman (in SF) with an excel sheet having the same thoughts as me.

Update 02 – 08-Oct-2014

I have added Meru as a viable option in my posts assuming their rates are at par with Uber. But I was quite surprised to see them substantially expensive. In Pune for example, their minimum base fare is 200 bucks compared to UberX’s 90 bucks. Also their price per km is 20 vs UberX’s 12. That won’t hold up to my earlier calculations.

Disclaimer:

This post may seem that it has been sponsored by Uber – but that isn’t the case. The level of service and convenience that these guys offer is giving us the first glimpses of “Transport as a service” – which we haven’t seen so far. A service which allows you to summon a ride at the push of a button gives you the ability to dream about getting rid of that vehicle you rarely use anyways and use your hard earned money smarter.


We are actually very serious about selling our second car and converting to Uber – so if you see any flaw in my plans / calculations, please leave me a comment so that I can rethink! Thanks 🙂

What happens if Flipkart Fails?

(Image courtesy Samrat Mazumdar)
Pritika and I were sitting at Marz O Rin today evening – biting into the delicious vegetable sandwiches and cheese burgers and discussing how a package that I ordered Monday morning from Flipkart, was sitting inside my car by Tuesday afternoon. Even though we have had a weird relationship, I am impressed – even today by the speed at which they deliver stuff – and the ease with which you can shop with them.(Our latest purchase needed to be returned due to a missing accessory. More on that experience in a later post)
The discussion moved onto how Flipkart was doing financially – and it is no surprise that they are literally burning through money.
They have raised a total of $540M till date and have about 5,000 employees. They are still to post a profit (breaking even will happen after a long time).
Online retail is such a business and even Amazon took 6-7 years before they posted a profit.
We started wondering what would happen if Flipkart shuts down…
Can it even happen? Will their investors let it?
I mean, things like this don’t happen immediately. Things slowly stop – categories start disappearing and eventually the news is announced.
Flipkart shutting down will actually be a huge blow to e-commerce in India. In Tier 1 and 2 cities at least, Flipkart is synonymous with online shopping.
They have actually brought online commerce to the masses in India and made people feel safer while typing in their credit card numbers in a website.
When Flipkart was raising its earlier rounds, every Tom, Dick, Harry (and their uncles) were starting e-commerce sites right, left and center.
Most of them have gone under.
It is really heartening to see every other e-commerce site – even the unknown seller on eBay – to come up to Flipkart’s level.
I have bought stuff from a dozen, different e-commerce websites – even sites with bad designs and broken code – but they always delivered.
I, for one, hope that Flipkart hasn’t bitten more than it can chew – which can happen with a company growing this fast.
It would be really sad to see them go as they are probably the closest we have to seeing a major win in the Indian Startup space.
What I think
If Flipkart shuts down, it will be a slight inconvenience to many people – but I feel that Flipkart has already done all the hard work in making us cynical Indians – open to online shopping. With Flipkart gone, people will just turn to other folks in the market – the eBays and Amazons and Infibeams for their online shopping fixes.
I feel, it will be a bigger loss to the Indian startup scene than the Indian eCommerce scene.
What do you think will happen if Flipkart shuts down?
Will it affect future e-commerce in India? Have they done all the hard work (in converting customers) for Amazon to swoop in and pitch their flag?
External Links:

  1. An interesting Forbes India article from a year ago.
  2. Sachin Bansal’s interesting reply to the article.
  3. Flipkart Staff Exodus
  4. The Amazon of India is — Amazon (added on 25-Oct-2014)

Hey Flipkart! I thought we were friends …

Hey Flipkart,

I have loved and liked you since a very long time.

When you were only so little – and just opening your eyes to the world in Sep 2008, I trusted you and bought my first book from  you – all of Rs. 750 and was so pleasantly surprised when it arrived all neatly packed in a couple of days.

I was so happy that I wrote about my experience at so many places, gave you 5 stars and told everyone I met – what an awesome service I had found.

Since then, you have grown by leaps and bounds and I have been so happy and proud that I was one of your early adopters.

My order list has grown and looks something like this – since we first met:



 

I have purchased 45+ items and spent an approximate of Rs. 36,000 on your site since – so I naturally thought that we were friends.

I wrote you an email yesterday:

Order ID: OD20606100278

1.) The Complete Calvin and Hobbes (3 Volume Set) – Bill Watterson ( 9780740748479 )

Hello,

I know this is late – but could you send me some extra Flipkart bookmarks along with this order? I know 1 bookmark is generally sent with a book – but I have many books without bookmarks and the Flipkart ones are awesome.

So, if you could send me around 20 bookmarks with this order, I would be very grateful. (If you send more, I have many reader friends with whom I’d love to share them – plus my company has a large library without bookmarks)

Thanks!

Regards,

Saurabh Jain

And received this reply:

Dear Saurabh,

Greetings from Flipkart!

Order ID: OD20606100278

1.) The Complete Calvin and Hobbes (3 Volume Set) – Bill Watterson ( 9780740748479 )

We regret to inform you that we do not accept special request for orders placed in our website.

 

I understand that sometimes these things might be difficult and might not be possible.

But can’t you do better than a short, curt reply?

I am really sad – not because you didn’t send me the bookmarks – but that you didn’t take any effort to reply back.

Did you even read my email or did you use one of your auto-reply bots to just send a cookie cutter response?

Maybe you have grown so big that you don’t have time for me – or maybe I am not giving you enough business?

I was thinking that you were the Zappos from India – but you turned out to be another yebhi / fashionandyou /.

I thought we were friends – but I guess we aren’t…

My Art of Living

Recently, I have had a decent amount of time to think about life, universe and everything else. Over the past couple of years, plenty of stuff has happened around me which has finally brought me down to this realisation. Please note that this applies to me and me only (though it may also apply to you – but YMMV)
The two principles on which I plan to live my life are:
1. Believe in Karma
I am not religious at all (by any stretch of imagination) – so this has nothing to do with religion or superstition – but simply along the lines of “do unto others what you want others to do to you“. Recently some jerk at my society started harassing me because he felt that I hit his car while parking mine (which I didn’t – I am an excellent driver).
Next day, I saw some unnatural, ‘key-made’ scratches on my car door and the power to my house was mysteriously turned off from the main switches in the meter room.
I was naturally pissed and while I was planning on how-to-get-back-to-him-nicely, a friend, narrated an incident in which a neighbour who similarly harassed his family – going the lengths of shoving nails in their locks so keys couldn’t go in, conked off soon after (due to natural causes of course).
While I, in no way want this guy to conk off (I swear), I am sure his karma will catch up with him soon and thus didn’t do anything to get back to him.
He eventually stopped troubling me (or so I think).
So in short, if you can let something go (little scratches on your car, bearing the heat without fans, etc) — you should.
No point in increasing tension, negativity around your life and wasting time on assholes. Life is too short anyways.
2. Optimize all decisions that you take to gain maximum ‘happiness’ points.
This one is a little more complex and includes some grey areas – hence I have worded it carefully – happiness points.
Different people get happy by different things in life. It can be as small as getting that firmware upgrade for your phone – to buying that Jaguar XK you have always had your eye on. So how will I decide on what to do?
Example 1:
Will owning a Jaguar make me happy? You bet!
Will paying the 1L+ per month on the loan at this point in time affect my happiness points?
Yes. Actually, in my current state, it will reduce my overall happiness by a LOT.
So, I will let the car pass… (for now)
Example 2:
Will taking that awesome vacation that costs 50K make me happy? You bet!
Will the fact that ‘by taking the vacation, I may not be able to make the advance payment on my home loan – that I was planning on’ affect my happiness?
Hardly.
So, I might take that vacation because it improves my overall happiness points.
(And a good vacation / experience, only gets better with time – so that is a definite yes on the vacation)
Example 3:
Would not having to work, just do my thing (watch movies, read books, etc) make me happy? You bet!
Will the fact that I would have to borrow cash from BOD and not be able to buy cool stuff and DVDs affect my happiness?
Definitely … I will be less happy in fact.
So I will pass this as well… (for now)
I think you might be seeing a pattern here.
And it is simple really …
So there!
If you agree with this post and feel that I should & could start a cult / ashram/ religious group / KKK or the like, put in a comment and if I have enough support, I just might!
Alternatively, I also accept donations in  the form of stuff listed above in the blog towards increasing my happiness points without any downturn to me.

And everything is right with the world …

So where were you when India won the world cup?
This is one of those defining moments in history that all of us — who were present and witnessed it — will probably remember for the rest of our lives (unless India makes a habit of winning world cups)
Looking back at the last couple of matches, it was very poetic – wasn’t it?
Beating Australia in the quarters.
Beating Pakistan later in the semis – in one helluva match and then later winning the finals against Sri Lanka — played in excellent spirit.
With both Afridi and Sangakara being extremely graceful in defeat.
With Dhoni being the one to score the winning runs. With him ending the match with an awesome six. With Yuvraj being there for company while he hit the runs. With both of them winning man of the match and man of the tournament awards.
With the team winning the world cup for Tendulkar!
In a way, it was just meant to be I guess.
And I have developed great respect for both Afridi (never thought I’d be saying this) and Sangakara for being extremely gracious in defeat and especially for Dhoni for being probably the best captain India has had in a long, long time.
Overall, its been a brilliant tournament and I was glad to be present here to witness it.
All the effort into setting up the giant screen on the terrace and getting a projector paying off…
We have finally won the world cup .. and everything is right with the world!

Entrepreneurship?

I was invited today to give a talk at SITM (which stands for Symbiosis Institute of Telecom Management). The college is situated at the Symbiosis International University campus at Lavale, Pune which is a very picturesque location (set on the top of a hill) on the way to Lavasa. Though approach roads and some other things are under construction, the place was beautiful and I am sure it will look terrific in the rains.
I always have a conflict of interest while speaking at such events because I do not completely believe in the “entrepreneurship” mumbo-jumbo and pushing students to take up entrepreneurship for the college’s sake. Many faculty members express their disappointment with students who do not take up entrepreneurship after getting their MBA degree. The sad truth (if the faculty members would realise) is that most MBA students take up MBA studies for one primary thing – and that is to get a high paying job. Thus pushing them to give this up is going to be very hard and better grounds to cultivate the entrepreneurial spirit would be in undergraduate courses like engineering.
I heard of a reputed MBA college which allowed students to try entrepreneurship for a year and if they could not make it, they could come back and sit for campus placements the next year. Stats? Out of the people who tried to be entrepreneurs, 96% sat for campus placements the next year — and only 4% of the students continued their startup.
Moral of the story? People who want to do a startup / be an entrepreneur will do it regardless of getting any push and people who don’t want to, won’t.
Like the famous quote from the Jesse Eisenberg character (Zuckerberg) in the movie “The Social Network”:

You know, you really don’t need a forensics team to get to the bottom of this. If you guys were the inventors of Facebook, you’d have invented Facebook.

Then there are of course core “entrepreneurship” courses which teach you how to become an entrepreneur.
I totally (and this is my own personal opinion) – think these course have no value whatsoever and are hooking onto a fad. (It is suddenly cool to be an entrepreneur, no?) I believe that running a business is like swimming – you cannot learn it from a book. You just have to get out there and do it!
Anyways, I had prepared a deck on my learnings from trying to run a software startup(s) for the past four years. I spoke for about 30 minutes and it wasn’t scripted – so I do not have the notes to share – but I  think the deck has some decent bullet points which should be self explanatory.
Sharing the deck here for my own personal (chronological) reference so that I can come down a couple of years later and see how stupid (or clever) I was:
 

The Value of Life …

After a lot of thought and deliberation and musings, I have concluded that:

“The value of a life is directly proportional to the number of people it touches in a good way and inversely proportional to the number of people it touches in a negative way.”

When you are gone, the summation of the loss which a number of people feel is equivalent to the value of your life.
Any thoughts on this?
[Update 1]
Modified the definition to take care of all the bad guys 🙂
See comment 2 below.

Parking hassles

I have off late started judging businesses depending on their parking policies.
No seriously! If you see some of the extreme arm-twisting techniques and prices some of these malls use, it’s unbelievable.
Firstly, charging for parking is illegal (I think) and yet everyone does it!
But if you think about it, we Indians being the free-loaders that we are – would just abuse free parking and I know tonnes of people who regularly do it.
C’mon – haven’t you gone and parked at a mall – just to go somewhere else nearby.
So, after a lot of thought and consideration, I kinda agree being charged a nominal fee for parking my vehicle.
But at the same time, the price should be justified.
The places and policies that top my list are:
1. Crosswords (at Sohrab Hall)
They have reserved FREE parking for people visiting crosswords. All you need to do is – on your way back, get the ticket stamped which says that you were in the store.
This seems completely justified – considering the amounts they spend on reserving parking slots for their customers – the least people can do is visit the store and see what they have on offer.
2. Inox (Free parking for 30 minutes)
Inox charges 10 bucks for bikes and 20 bucks for cars – completely justified in Pune – and this also seems like the norm.
However, what I really like about them is that they have 30 minutes of free parking. (This was an hour earlier but I could live with 30 minutes)
What this does is – gives you enough time to hop into the theatre and buy some tickets or grab some lunch at McDonalds without paying the equivalent of your Mc Donalds’ meal. If I am watching a movie for a couple of hours, fine – I agree with being charged – but theatres shouldn’t charge people for coming and buying tickets!
3. Pune Central (Parking charges redeemable during purchase)
Pune Central charges you for parking – but you could exchange the ticket inside when you purchase something.
This seems kinda harsh – considering that you may not like something and still be paying just to browse around the store. (Hey! Wait a minute! Shouldn’t stores be making it more conducive for you to browse around?)
Anyways, so yeah! What Pune Central does seems pretty just to me.
Actually Dorabjees in camp does the same thing – but you need to purchase a minimum amount of things (I think 100 bucks) before they will re-imburse you for the parking. Not entirely fair – but still okay sometimes.
Now for the worst offenders!
1. E-Square
Nothing – and I mean nothing beats paying 40 bucks for parking your car. I have noo idea what these guys do to your car. 40 frikkin bucks for parking! I could put a litre of fuel in my car for that amount and drive half way around Pune.
Totally sadistic, arm twisting tactics (and there is no public parking available near E-Square for miles!!!)
This is one of the reasons I really hate E-Square and avoid going there.
(The other being the weird seat arrangements and the crowds – but thats for another post)
2. Ishanya, Nucleas, Gold Adlabs, Lifestyle, etc. etc.
(And every other place which does not re-imburse you even on purchasing)
Ishanya and I however have a special history …
When Ishanya opened sometime ago near my house – I thought it was fabulous!
The mall was gigantic – you could get anything there, spend a good couple of hours just browsing around and even the parking was free. (and they have ample parking believe you me)
However, I was in for a rude shock one day when I drive in and am charged for parking which is not even redeemable.
The worst thing is that Ishanya is literally in the middle of no where and you have no option but to park your vehicle inside. Its like paying 20 bucks for an entry ticket to the museum!!!
Anyways, I came back and shot an email to them complaining about it.
To my surprise, the next day, I received a call from their head of operations (signing the email as President, ThinkingSpace Technologies has an effect sometimes) who assured me that they would start the redeemable policy soon and that they were charging parking because people would park their bikes there and go off someplace else.
(Yeah right! If you’re in the middle of nowhere, where do you think I’ll go?)
Anyways, its been a year and more since, and still nothing has been done.
However, I have stopped visiting Ishanya.
Result? I try and buy whatever I need from local places around my house. Ishanya being the last option.
(I dunno – I just somehow feel cheated going there)
To cut a long story short, I do empathize with businesses and their problem with free-loaders parking in places reserved for customers – but these businesses need to come up with more amicable solutions to this problem.
Charging monstorous amounts for parking is just going to hurt your business.
I love what Crosswords is doing – but I also understand its difficult to implement.
But I’m completely cool with the Pune Central approach too. (Redeem parking when you buy)
I actually have a better idea!
Redeem double the amount of parking when you buy something! (Applicable over a certain limit. For below the limit, just redeem the amount what you paid for).
Here is wishing some sense manages to creep into the heads of people making such idiotic decisions (especially the ones from E-Square) and hoping that ’09 is a brilliant and fun-filled year for everyone!

The thing about life getting back to normal …

This happened the last time – and I bet it will happen again once the dust and smoke settles down.
Last time, people commended – how life went back to normal and the resilient nature of the people of Mumbai India.
It is actually sad that people approve of how life gets back to normal.
It should not! Lessons need to be learnt and things need to be changed …
We Indians are probably one of the most tolerant and laid back group of people in the world.
It’s time to get a little bit angry and a little paranoid …
It’s not too late to have a plan. Terrorism is upon all of us now – not only in J&K.
Time to stop covering our eyes and prepare to deal with these guys as and when the situation arises …