Virtual is the New Reality
What’s in? Online shopping. What’s out? Conventional shopping. Well, almost. With the rise of e-commerce platforms you can now buy virtually everything on the Net. Yes, including motorcycles
‘CLICK TO BUY’ IS THE LATEST PHRASE IN THE world of shopping. From expensive items such as watches and jewellery to regular grocery and even veggies, there is virtually nothing that is not caught in this worldwide web of shopping on the Internet. The latest item to figure on the ever expanding list of the online shopper is — believe it or not — motorcycles. Truly, the universe of the virtual shopping mall has taken the merchandising world by storm. But what is the lure of the online shopping experience and why is it being able to match the conventional form of shopping head to head? Convenience is probably the obvious answer, but rarely are we satisfied with obvious answers. So we decided to speak to three key parties involved in this relatively new phenomenon of online bike buying to understand what it is that is driving the growth of online merchandising in the automotive world.
Although a relative newcomer to the two-wheeler world, Mahindra Two Wheelers Limited made the radical move of becoming one of the first manufacturers to start selling their two-wheelers on online platforms. Similarly, Flipkart, the homegrown e-commerce platform that took the fight to global giants like eBay and Amazon and won, also became one of the first such platforms where you could buy your next two-wheeler with the click of a button. Last but not the least are the authorised dealers of the Indian twowheeler industry who provide support to this growing phenomenon. We spoke to all three to understand the business of buying a bike online.
As mentioned earlier, the convenience (of not having to step out and physically visit a point of sale/purchase) of online shopping obviously contributes hugely to its growing popularity, but Adarsh K Menon, Vice President, Electronics and Auto, Flipkart, feels that buying a vehicle online is a logical step in the chain of actions that eventually lead to a purchase. “E-commerce solves fundamental issues such as availability, distribution and service, apart from democratising information. Automobile purchase in urban India is now undergoing digital transformation. Customers have already started buying big-ticket items such as television sets, smartphones and laptops online. Consumers are increasingly tapping into technology and accessing real-time information available on the Internet to research and purchase vehicles. More than 60 per cent of the customers do research online, and the logical next step is to complete the transaction online. Hence e-commerce witnesses a great opportunity to complete the transaction online,” he explains.
Incidentally, Flipkart has witnessed an astounding 600 per cent year-on-year growth in the category since starting the Auto category in January 2015.
Some part of the popularity of e-commerce also comes from the push that it gets from the manufacturer who sees such platforms as a new and innovative way to reach out to a wider audience. “At Mahindra Two Wheelers, we are always looking at new ways to innovate, whether it is in our products or through the services offered to our customers. We were already leveraging digital opportunities while building social connect, procuring leads as well as establishing our advanced range of two-wheelers. In fact, many of the earlier product enquiries that we received till a few years back were through digital media. For us online sales are a logical extension,” says Naveen Malhotra, Senior General Manager, Marketing and Product Planning, Mahindra Two Wheelers Limited.
‘E-commerce solves fundamental issues such as availability, distribution and service, apart from democratising information’ ---- Adarsh K Menon, Vice President, Electronics and Auto, Flipkart
In essence, therefore, e-commerce is merely the next logical step in the larger scheme of things when it comes to buying and selling an article; in this case, two-wheelers.
But what happens to the age-old way of doing things, of visiting a showroom, leafing through the brochures, and speaking to a salesman, etc? How does the young phenomenon that is e-commerce have an impact on the venerable institution of the authorised dealership? As it turns out, rather than viewing the phenomenon as a threat, dealers seem to regard e-commerce as a complementary tool that will help them reach out to a wider and newer audience. “The benefit of this complementary sales channel is that it lets us reach out to the newer consumer segment within our geographical span. It gives a convenient option to customers. It certainly has tremendous potential to grow manifold,” says Manesh Khandelwal, proprietor of Khandelwal Automobiles in Delhi. “We look at e-commerce as a complementary platform to assist us in reaching out to consumers who would not have visited a Mahindra Two Wheelers dealership before,” he adds.
Although everything appears hunky dory, e-commerce with regard to two-wheelers also has its challenges. For instance, how do you offer customers a test-ride? Or who helps with the registration and insurance process? Or, equally critically, will he get the warranty and after-sales service that a conventional two-wheeler customer would? Although nearly all of the research is done by customers online, courtesy widely available rich and credible content (reviews, comparisons, technical data, etc, on websites such as www.bikeindia.in), it is not possible to offer customers the actual experience of a product. At this stage, the young e-commerce phenomenon falls back on the age-old conventional methods of buying and selling.
“We, at the dealership, are happy to be a partner in this initiative via assisting in delivery, registration, etc, depending on the kind of purchase and, more importantly, post-sales support. There is no channel conflict as the synergy between online and brickand-mortar establishments only helps increase the size of the pie,” explains Khandelwal. He goes on to describe one of the fundamental challenges of e-commerce. “We, as dealers, add a value proposition that is limited in its scope to be enabled on online platforms. For instance, a customer would still prefer to check out a two-wheeler physically. Touch and feel in a high-involvement category will still be a key element for customers in the future as well. For after-sales service they would still have to contact us. Since each stakeholder contributes in creating a seamless business model, the dealership will always be an integral part of online sales.”
According to Flipkart’s Menon, there is a tremendous amount of information available online, which is where the majority of buyers conduct their research. Eventually, however, he concedes that the physical experience of the product is critical and for this, the e-commerce platform is happy to connect customers with dealers in order to facilitate test-rides. For issues such as warranty, registration and after-sales, too, the onus is on conventional methods for now. “We are closing the fulfilment on delivery. Post-purchase warranty and service are directly co-ordinated by the dealers. All standard terms of purchase remain the same for all orders through Flipkart,” says Menon.
The key insight behind such apparently ironic co-operation, however, comes from Mahindra Two Wheelers’ Naveen Malhotra. “Our online sales option is a tripartite relation among Mahindra Two Wheelers, our dealer network and our online e-commerce partner. It is an integrated effort to service the customer. At this juncture, while the transaction happens online, all the other formalities, including servicing, etc, happen at our dealerships. Thus the customer has full support from us on every aspect of the purchase.”
The other big challenge for e-commerce to combat is the issue of credibility — after all, a two-wheeler purchase is a high-involvement act by a customer. Manufacturers feel that the way to combat this is to associate with reputed platforms only. “Two-wheelers remain a high-involvement purchase and thus customers also go to the right avenues to buy one after due consideration. The buying behaviour of a two-wheeler customer online is a very informed, researched behaviour — which plays a big role in avoiding this pitfall. Also we have associated only with reputed e-commerce players, which helps us in circumventing the problem,” explains Malhotra. The e-commerce platform, on the other hand, cites transparency in operations as the weapon with which to beat customers’ doubts. “Automobile is a highly organised industry. OEMs and authorised dealers ensure standardisation of product and service offering. This being a high-involvement purchase, customers are anxious to know what’s happening. All through the purchase journey Flipkart will ensure transparency to customers,” says Menon.
So all is well then with the e-commerce phenomenon when it comes to two-wheelers. Indeed, it appears to be so, for now. The optimism is best summed up by Khandelwal. “The initial feedback is very encouraging and witnessing this we are sure this [the phenomenon] will grow much, much more. This is a channel which will increasingly become a major medium for generating business for us going forward as it keeps the consumers’ interests in mind both by providing convenience and choices. The future looks promising in terms of automotive online merchandising reaching newer segments of consumers plus opening avenues for generating more revenue for us at the dealership,” he says. But it is Menon who adds in the larger-picture-perspective. “Automobile buyers in India are looking for a seamless buying experience that includes the decision to purchase, finance, insurance, after-sales service and access to spares and accessories. This shift in customer attitude will lead to a convergence of multiple ecosystem players towards e-commerce, creating a seamless, integrated experience that accommodates all customers’ needs. One of the segments that will have a huge uptake is e-bikes. It will be a big segment in the future and Flipkart will plug distribution gaps in the most economical way,” he says.
‘We, at the dealership, are happy to be a partner in this initiative via assisting in delivery, registration, etc, depending on the kind of purchase and, more importantly, post-sales support’ ---- Manesh Khandelwal, proprietor, Khandelwal Automobiles, Delhi