Alibaba has an ambitious goal: becoming the first company to exceed $1 trillion in gross merchandise value in the next five years. To accomplish this, Alibaba is looking to expand in emerging markets, as developed markets like North America and Europe are mature and have high barriers to entry. Emerging markets with rapidly growing smartphone penetration, relatively poor offline retail experiences, challenging logistics environments, and limited online payment infrastructures are ideal targets for Alibaba’s expansion.
The mobile marketplace is a huge opportunity. Forrester expects mCommerce in India to top $19 billion by 2019— an attractive opportunity for players like Paytm, which currently counts more than 25 million users. Forrester expects that the number of online buyers in India will rise from 36 million in 2014 to 125 million by 2019.
While most Indian organizations focus on driving customer experience (CX) excellence, the chief customer officer (CCO) role is still nascent. For my recently published report chronicling the rise of the CCO in India, I studied 79 public profiles of CX leaders across organizations doing business in India to better understand their job title, their tenure as a CCO, and their background and experience. My research revealed that the CCO is a role newly added to most of these professionals’ résumés: Almost all are first-time CCOs and majority have been in the CCO role for less than two years (see figure below). I also found that nearly all (99%) organizations have only recently added this business role to their cluster of C-level executives; the CCO role has existed, on average, for 2.7 years.
Even though the CCO’s job is held by experienced individuals with an average of 16 years of work experience and extensive leadership background across varied business disciplines, their past experience has limited relevance to their current CX position. New CCOs are bound to face challenges that are common to weakly established business functions; abilities acquired and lessons learned in prior roles will have limited relevance to the CCO role. This will be amplified by the lack of structured processes at their organization and the inertia they will face in trying to break down existing process and operational silos across the CX ecosystem. However, it’s not all bad. By looking beyond the obstacles, there is upside for both CCOs and their organizations in this seemingly challenging situation. They will gain:
On November 20, Google released a report on the findings from a survey it conducted in collaboration with Forrester on online shopping trends in India. The report highlights what’s driving the growth of eCommerce in India, including mobile commerce, female shoppers, and the growing number of people in tier two and tier three cities making purchases online. However, the report also noted some barriers to online retail in India, such as its poor showing regarding customer satisfaction and trust; to make further progress, eCommerce firms must work hard to improve in these areas. The report’s key findings involved:
Mobile shoppers. Mobile is driving the market, especially in tier two and tier three cities in India. Half of the online shoppers in tier three cities are already on mobile, compared with just one-third in tier one cities. The percentage of online buyers making shopping queries from a mobile device has grown from 24% in 2012 to 57% in 2014. Forrester forecasts that mCommerce in India will reach $19 billion by 2019.
Women. Women are far more active buyers than men in tier one cities. They outspend men online by two to one, and one-quarter of women in tier one cities make mobile purchases.
New buyers. More than 70% of people in tier one and tier two cities who do not currently make purchases online are expected to do so in the next 12 months.
New growth areas. Home furnishings, cosmetics, and baby care are the next areas of growth for online retail after the success of online retail in the consumer electronics segment.
Indian consumers are more likely to own a mobile phone and use it to access the Internet than own a PC or laptop and use a wired Internet connection. The stats speak for themselves: As of September 2014, India has more than 930 million wireless subscribers against just 27 million wireline subscribers. And while just 8% of these 957 million subscribers have a broadband connection (with download speeds of 512 kbps or better), fully 80% of them are mobile users.
This is leading to the mobile mind shift: the expectation that consumers can get what they want in their immediate context and moments of need. This trend is particularly evident in retail; today’s consumers are increasingly using their mobile devices to accomplish a variety of shopping-related tasks online – from researching a product to buying it.
Forrester has developed a global retail segmentation framework to identify, assess, and compare the behaviors of shoppers in various countries. Five segments identify the most prevalent and regular shopper behaviors (see figure below). According to this framework, 6% of metro Indian online users fall into the Mobile Shoppers segment. In comparison, only 4% of online users in the US are Mobile Shoppers! Even the percentage of Super-Shoppers in India is more than twice that in the US.
Digital transformation will drive technology spending growth of 4.9%.Always-connected, technology-empowered customers are redefining sources of competitive advantage for AP organizations. In fact, 79% of business and technology decision-makers that Forrester surveyed indicated that improving the experience of technology-empowered customers will be a high or critical priority for their business in 2015. Similarly, 57% said that meeting consumers’ rising expectations was one of the reasons that they would spend more money on technology next year — the top reported reason for increased technology spending
India’s online retail market is on the radar of global investors and eCommerce players, which have announced investments topping $3.6 billion in the past three months, including $2 billion in Amazon, $1 billion in Flipkart, and potentially $650 million in Snapdeal. Growth in India’s online retail market is powered by its fast-growing smartphone penetration, as customers are increasingly using their mobile phones to buy products online. More than half of Snapdeal’s and Flipkart’s sales and nearly 35% of
2014 was a year of massive eCommerce investment in India. Flipkart raised $1 billion; Amazon announced it would invest $2 billion in its Indian subsidiary; and Snapdeal raised $234 million from private equity firms and an undisclosed additional sum from private investors. These three players are spending approximately 2 billion rupees ($33 million) this season on marketing — and a lot more on improving last-mile delivery and adding fulfillment centers to get a bigger piece of the sales pie.
While analyzing the survey results for my recent report on the state of customer experience management in India, I noticed a fundamental flaw in the way that Indian organizations approach reporting structures for their customer experience (CX) teams. About a fifth of the organizations we surveyed rely on their customer service department to lead the charge for CX initiatives.
This is detrimental to the growth of CX, as there are basic differences between the scope of work and the skill sets of the two teams. Specifically, customer service teams have limited capabilities and exposure across:
People. While both CX and customer service teams work toward enhancing the experience across the customer life cycle, the customer service team has a somewhat myopic view of customer engagement, focusing predominantly on handling client complaints and resolving queries.
Processes. Forrester defines customer experience as how customers perceive their interactions with a company. The contribution of customer service teams to this process is limited to supporting customer tasks in a few phases of the journey.
Tools. Customer service professionals are responsible for the experience delivered via multiple touchpoints, such as IVR systems, contact centers, and social media. However, other equally important customer interfaces, such as mobile applications, digital kiosks, and eCommerce platforms, fall outside their purview.
Forrester’s survey data shows that the vast majority of Indian CIOs (87%) consider addressing rising customer expectations and improving customer satisfaction to be their top business priorities. Soaring customer demand is putting pressure on businesses to invest in customer experience (CX) initiatives. For my recently published report, The State Of Customer Experience Management In India, 2014, we surveyed 89 CX professionals in Indian organizations and asked them about their spending plans for 2014. Here's what we found: 60% of them expect to spend more on CX programs this year.
While this increased spending on CX by Indian organizations is encouraging, their initiatives too often lack alignment with business goals. We asked the same set of CX professionals about their key CX practices and found that 44% don’t regularly model the influence of CX metrics on business outcomes, while 49% don’t consistently consider alignment with CX strategy as a criterion for project funding and prioritization decisions.
These findings highlight the disconnect between organizations’ commitment to boosting CX and the impact of these initiatives on business outcomes. In the long run, this disconnect has two implications for organizations and their CX teams:
Lack of business alignment with soaring customer demands will result in dissatisfaction and churn. While business investment in CX is growing in India, initiatives that don't align with desired business goals will fail to result in desired business outcomes, thus creating a gap between market demand and the business offering.
Companies understand the urgency of ramping up their business technology (BT) capabilities to help the business innovate and grow. Increasingly, they realize that they cannot do this alone and firms will require partners that can help deliver agile services that bring fast and predictable outcomes to the business. For instance, Bharat Light and Power (BLP), one of the largest clean energy generation companies in India, signed in late 2013, a 10-year engagement with IBM to build a new business capability that aims at nothing short of transforming the utility sector in India. In a few words (more details are available in this report), BLP and IBM are creating an open energy service platform that will help BLP understand how to optimize the utilization of its wind turbines. The really interesting part for me lies in the way the company intends to leverage the information generated by this platform as the basis of its competitive advantage. The energy service platform will indeed act as an expertise repository that BLP can leverage to:
Increase the value of its own assets. As the company operates, grows, and optimizes its own asset efficiency, it learns how the climate, power grid, and wind turbines influence a vital business metric for a utility company: the plant load factor (PLF). This will allow the company to generate more revenues from its existing assets.