Online IT sales are happening...finally!

Online sales of IT products have seen a substantial increase in the past year. This is partly to the contributions of a few online trading and shopping portals like Baazee, Rediff, Indiatimes, CIOL and Fabmart among others, who have played a major role in the growth.

A section of the IT channel has shown enthusiastic participation in this medium with exciting results. According to market sources, 75% of the e-commerce transactions of IT products in recent months, have come from the top three companies, with Baazee having a 35% marketshare, followed by Rediff at 25% and Indiatimes at 15%.

While, most portals follow a 'shopping mall' concept, where only buyers get a chance to login and buy products online, Baazee is the only one, which offers a 'marketplace' model. Here, both, buyers and seller can come and do business. "Baazee's role is that of a facilitator for B2C transactions," says Kashyap Mehta, Category Manager - Computers & IT products,

Baazee.com.

Baazee reports a strong growth coming from the sale of IT products. The number of 'active sellers' on this site, who are involved in IT sales, has increased from 35 in 2002 to 80 in 2003. "We are expecting it to reach 150 in the next one year," informs Kashyap. According to him, there are many importers also doing volume sales through

Baazee.

Products that get sold online are usually the ones, which are new and have not yet reached a particular region or city. Some are also the end-of-life products that generally get sold by the seller at a low value to liquidate stocks. "We do business worth Rs 4.5 lakh per month through online sales. This largely contributes many items, which I am not able to sell through my normal dealer channel," remarks Ketan Patel, Director, Creative Computers. 

Products, which sell the most at Baazee, in unit terms, are computer accessories, followed by printers (mostly inkjets), CD-writers, web-cams, video and multimedia, PDAs, and portable USB devices. In terms of value, laptops, PDAs and printers are the most popular devices.

Baazee added 'IT products' as a category last year. An average 4,000 transactions per quarter was reported in this category in 2002. This figure touched 10,000 transactions per quarter in 2003. Baazee is hoping to cross the 20,000 transactions per quarter mark in 2004.

The fact that the Internet and PC penetration is increasing has helped the growth of online sales to a great extent. "With Internet access reaching B and C-class cities, people are getting to know about products which they never had access to. Also, they are happy that the product is now delivered at their doorstep," explains Kashyap. The importance of this factor can be judged by the fact that Baazee reports more sales coming from B and C-class cities than the metros. 

High-value transactions usually take place within the city where the selling party is based. This is probably because of a customer's tendency to have an easy access to the seller, to get a touch-and-feel of the product, and to avail warranty support within the city.

In terms of sales happening value-wise, products priced up to Rs 3,000 are usually transacted through credit cards. Items between Rs 3,000 and Rs 6,000 are purchased through DD or cheque or credit card, while those above Rs 10,000 are bought through DD or cheque. And most of the transaction for less than Rs 1,000 attracts cash-on-delivery payments.

"It is just one year since we started the option of paying through Paisa Pay (using ICICI's online payment gateway), and already we are seeing 35% to 40% of users opting for this mechanism. In the near future, we will see most of the buyers using this mode of payment," states

Kashyap.

NELSON JOHNY



MUMBAI