E-store: ga-ga about business
(By Pragati Verma, The Economic Times, Section: Networked, New Delhi, 20th January,2000)

Manpreet Singh, managing director, Multiple Zones India (MZI) has learnt a hard lesson in the nine months since setting up the e-store http://www.pczoneindia.com/.This Web site has been the pioneer of mail order purchases for IT products in India.

When MZI launched its e-store nine months back, they "went gaga" about selling to consumers. But soon they realised that there was no repeat buying. "We were getting nowhere. There can simply be no e-selling to the consumer segment without a mature retail channel," explains Singh.

Now the direct-to-customer IT company is aiming to provide a business-to-business IT portal for the corporate and small and medium business in the country. With the new focus come discounts, point-based incentive on every order logged in and free holiday sweepstakes. Next on agenda are PC-based Web-ready call centres for b telemarketing and customer service and an ombudsman to whom the customers can turn to, if they have any problems. A little over 30 months old, MZI was perhaps the first company in India to take the direct marketing route through catalogues. Beginning with a modest investment of Rs 70 lakh, the subsidiary of the US-based $700 million Multiple Zones International recorded a turnover of Rs 30 crore and expects to grow to Rs 55 crore by 2001, of which the e-store would contribute about 40 per cent. Claimed to be the largest direct-to-customer IT enterprise in India today, the bi-monthly catalogue with a print run of 50,000 features 2000 products, compared to 10,000 products on the e-store. But the USP of the e-store is no different - it is a one-stop shop for global brands offering competitive prices. It will assist IT heads in corporates and SMEs to make a convenient and informed purchase decision and dynamically reduce the total cost of ownership of an IT asset. The e-store will also bring down the lead time in executing a transaction both from the customer's as well as the vendor end," says Kanwaljit Singh, general manager (marketing), Intel Asia Electronics Inc, which has a marketing and technical tie-up with MZI. Is the e-store and catalogue approach different from normal retail channel? "The Web is an excellent tool to reach out to customers; it's a 24-hour shop. But it can't replace the touch and feel factor of physical selling and we will soon set up physical stores,'' says Singh. A typical IT buyer, according to him, checks out six things: corporate assurance, technical strength, scope for discounts and negotiations, logistics like information on order processing, after sales service, and overall relationship with the vendor.

MZI, therefore, concentrates on close relationships with principals and offers variable pricing, offers online negotiations and interface with principals for best prices on large bids. To build excitement around its e-store, MZI has come up with special discounts during happy hours and physical carnivals replicating carnival zone on the Web. MZI plans to start its Singapore operations by March. To begin with, it will concentrate on giving lower prices to export oriented units in India. Next in line are Dubai, UAE and Indonesia.

At the moment, MZI is busy tying up its supply and delivery chains and translate low inventories into huge discounts on the marked price of products. Only then will virtual selling take off.