Comparison shopping in India: Current state and what’s in future

Written by: Madhur

On Mar 8th, 2007

Background
With the increasing Internet penetration, ecommerce is steadily growing in India. In the travel sector, it has reached a tipping point where buying tickets online has become quite commonplace. I believe it hasn’t reached that stage yet in the other sectors, but it is surely inching there. The number of sites selling stuff online is increasing at a good rate too – there are at least 150+ decent sites doing retail over the Internet. Surely, a lot of these have started off with focus on NRI customers, but it is not difficult for them to switch gears and start focusing on the customers in India, when there is demand.

Start of the concept
As the number of sites increase, how do you know where to go and buy stuff. Surely ebay is the current leader, but as other sites start becoming more and more competitive, it becomes a pain to find out the site offering the best deal. In comes the concept of comparison shopping sites. These guys build an index from the product inventories of as many online shopping sites as they can get the data from and provide search on this index. As a result, users can come to the site, search for products and see what each online merchant has to offer and eventually click out and go to the merchant site to do the transaction. The way these guys make money is by charging the online merchant for driving traffic to their site (mostly cost per click). As with the standard CPC concept, this marketing channel is very effective and accountable for the online merchants as they pay only when they actually get the user on their site. With more than 150+ shopping sites out there, you’d think someone would have seen an opportunity and started a comparison shopping engine. You didn’t think wrong. Surely, we are starting to see some traction in this area with the early players being bechna.com and ultop.com. Check them out, these sites do not have a lot of stores in their index, but its a good start. We will definitely see more players entering this field and will try to offer more and more value in terms of better user experience, having more items/stores in the index etc. Obviously, the more items and stores that a player has, the better job it can do by helping users find the best products and best prices.
How to scale?
Now the next question then is – how do these players get the data? Couple of options here: they can get data feeds directly from online merchants or they can scrape/crawl the shopping sites and extract data from there. The first method is an easier technological problem, because of the fact that data feeds that they get are much more structured compared to unstructured HTML from the websites (which ofcourse does not mean that no one takes this approach. Sometimes this is pretty much the only way to go. more on this approach in a later post). But the problem is that as more and more comparison shopping players come up, it is not scalable for the online merchants to provide data feeds to each of these players. Providing data feeds is not the only problem, the online merchants need to track how much traffic a comparison shopping site is generating so that they can pay appropriately and measure their ROI. As the industry matures and comparison shopping becomes popular, we will see “middle-men” in the form of data feed aggregators coming in, who will collect data from the online merchants and supply it to anyone looking to create a comparison shopping site. This is also a very attractive business as each these middle-men get a cut from the revenue that comparison shopping sites generate. Have not seen any player doing the data feed aggregation in India yet. To give examples from the US market, a few examples of comparison shopping sites are shopping.com, shopping.yahoo.com, pricegrabber.com, shopzilla.com etc. A few data feed aggregators are linkshare, commission junction, etc. In europe there is kelkoo, pricerunner to name a few.
Offline
Ofcourse the concept of comparison shopping is not limited to online shopping sites only. There are sites like Rediff Product Search and CompareIndia.com that actually build their index from data feeds from the local retailers, so users can find out who is offering the best deal and go and buy the products from the physical store.
Whats in the future?
I think bechna and ultop have an early foot in the door, but it will be interesting to see how they evolve and which other players come in by the time the concept really hits mainstream. Ofcourse aggregation and distribution of data feeds still looks like an open opportunity today (from my research).

Sphere: Related Content

Entry Filed under: bechna,compareindia,comparison shopping,ecommerce,online retail,rediff product search,ultop

6 Responses

  1. 1. Merchant Accounts » Comparison shopping in India: Current state and what’s in future said on March 8th, 2007 at 7:07 pm

    […] Original post by Madhur and a wordpress plugin by Elliott […]

  2. 2. vivek garg said on March 9th, 2007 at 6:18 am

    This is the ecosystem that is still evolving in India and we have talked about deal aggregators in the past.

    http://ileher.com/2007/01/19/hungry-for-online-deals/

    I would like to summarise the big picture. Draw a big circle for search engine. Draw a smaller circle within that for comparision search engine. Draw another circle within shopping comparision for deal aggregators. These are interesting views on same set of product data on the web. And to enable these views, we will have enablers (middle man as you called them in the post). Revenue will flow from sellers to the enablers to the view providers.

  3. 3. Seshadri said on March 14th, 2007 at 12:05 pm

    Hi,
    Would like to point another site, that is a out there in Indian comparison shopping space. Singdeals.com seems to have decent amount of listing.

    Regards

  4. 4. vijay kurhade said on March 15th, 2007 at 10:41 am

    Online shopping in developed countries is a way to shop at leisure and at economical price.

    In India we still have making maximum profits typical mentality where even online sites fail to offer lower prices and also in few cases goods seen on website & ones delivered are like poles apart. I have very bad experience with rediff.com & bazee(now ebay.co.in) where products were of inferior quality & seller refused to honur agrrement and take them back.

    In terms of books any local shop gives 20% discount on most of educational to other books where as in online sites u get almost none + u have shipping charges.

    Potential is there but there are many lacking things in eShopping system in india which still forces people to crowd as nearby stores.

  5. 5. Sameer said on April 3rd, 2007 at 11:47 pm

    Is the traffic to these comparison shopping sites increasing? I know most of them are less than a year old…but what is the trend?

  6. 6. Seshadri M said on April 23rd, 2007 at 4:03 pm

    The trend does look to be increasing for the price comparison shopping segment. I researched 3 of them: singdeals, ultop/tolmol and bechna.

    Bechna is a great name for a comparison shopping site in my opinion. Where do people come up with names like singdeals and ultop?? Weird. Well Google was weird too. So its always better to look at the facts and numbers.

    Here is the latest look at the 1 week Alexa Rank for 3 of the top sites I found in this segment: ultop/tolmol, http://www.singdeals.com, http://www.bechna.com

    (Leader) Bechna: 1 week Alexa Rank: 223,325 http://www.alexa.com/data/details/traffic_details?q=&url=www.bechna.com

    (2nd place) Singdeals: 1 week Alexa Rank: 449,634 http://www.alexa.com/data/details/traffic_details?q=&url=www.singdeals.com

    (Last place) tolmol: 969,722 http://www.alexa.com/data/details/traffic_details?url=www.tolmol.com

    Couple of points to note. Alexa is not precise but is a good indicator of traffic. If anything these numbers underestimate the traffic to the sites in India as the Alexa toolbar is not widely used over here. But for comparison purposes it is very useful.

    From the above numbers its quite clear that Bechna is the early leader, followed by singdeals and ultop/tolmol. Once again, this does not mean that Bechna is the best..but it does look like its the most used.

Comments are closed.