Lane Leskela is research director and principal analyst for Gartner's E-business intelligence services Asia/Pacific programmes. He is responsible for the qualitative and quantitative analysis of B2B and B2C e-commerce services deployment and business models. In an interview with the eFE's Priya Srinivasan, Leskela outlines his insightful views on the onslaught of international B2C portals and the long term effects of the competition that this spate of entrants is likely to spur in India. Excerpts:
What reasons would you assign to the slew of international sites that have been making their entry into India currently? Basically why have they all chosen this point in time for their entry?
The reasons start with what they are having to face at this point in their home markets like the US. This is a timely escape from their home markets where B2C is a reviled term and so is B2B. We are in the middle of the trough as far as capital markets, media and investor disillusionment in the US, UK and some European markets is concerned. Besides this, these sites need tremendous growth which comes from traffic, they will need everyone on earth logging onto their sites to fuel the kind of growth they are looking for. Most of them have already exhausted the user base in their home markets and will now have to start pursuing micro strategies to retain their customer base. The immediate opportunity that India presents is in the people demographics. There is a large English speaking population which already views their sites so they will have a natural migration there which ensures certain numbers.These sites have struck several content alliances in which they may wind up taking equity positions, do you see a cause for concern here?
I call this the dark phase. The G-D (global to domestic) phase where multinational companies begin to enter the market is typically viewed as a threat and this is exactly what is happening in the context of the Indian scenario. However, the Internet has a distinct Anglo-American influence at this point which reflects the customer of the US, UK and maybe Germany in Europe. This homogenisation is not going to work. For countries like India partnerships will always be key. There is already resistance to this homogenisation in several countries, local partnerships are key in this dynamic. You cannot think of the Internet or technology as generic.
What do you foresee as the next stage for India which is witnessing a slew of international players in the B2C space?
I think it will be quite a while before B2C e-commerce actually takes off in India, what is more important and immediate in the Indian context is the way in which companies are going to react to the competition. A lot of participants at this summit have expressed their fears about global competition and more importantly are exploring ways of taking their own businesses global. I think this competition will spur new ways of thinking which is going to penetrate traditional industries as well. In areas ranging from business process outsourcing to precious gems and any sector which calls for the creation of efficient supplier networks can be leveraged by India. The trigger will come from the knowledge-based sector
How do you see India positioned in the new economy as opposed to the rest of the region particularly China?
China remains more of a physical goods and services base whereas India is in a position to participate with Tier One companies in the IT space and the knowledge sector is the one which leads today, so the trigger for India is likely to come from the knowledge sector but will finally extend to traditional sectors as well.
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