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Indian e-commerce Betting Big on Big Data
Nine years ago when Flipkart was started as an online platform for selling books, Sachin Bansal used to go across the roads of Bangalore to procure the orders from small distributors. They used to stand outside Gangaram Book Stores on Church Street and hand over Flipkart bookmarks to the people coming out of the shop. In order to make sure that their targeting was right, they would give bookmarks to only those who were coming out with books in hands; the people who have made purchases (yourstory.com).
Today in 2016, the buying habit of Indians has changed along with the buying power with the flourishment of e-commerce companies. It’s not confined to travel, cameras, books, garments or mobile accessories. Now, there are e-commerce sites for jewellery and spectacles too. Over the years, marketing has also evolved and e-commerce companies like Amazon, Flipkart, Snapdeal has taken a more sophisticated approach. Now that the competition has grown, mobility, big data and analytics are the hottest trends that will now help them not only sustain but also grow.
However, the question is: Big Data was available years back, why the hype now? It's because the industry has just figured out that a term can be coined around it. It’s more about the fact that data is being created in more areas. Earlier, everything used to happen through applications, now data proliferation has happened with channels of social media. It’s also happening in device data as mobile phones are generating more and more data today.
An e-commerce business analyst has numerous data sources to consider when making decisions on how to set a price and compete in the advertisement space. The data sources vary in type, and until recently, they were difficult to integrate. Relevant data are competitor offers, products’ costs and prices, stock levels and stocking costs, sales, advertising campaigns and prices, customers’ sentiment and sales data.
Today e-commerce companies use Big Data in two ways. One is to analyse past behaviour of customers to find patterns, and the other is real-time analysis, that is, reacting when the customer is shopping online. Take for example, HomeShop18. Narasimha Jayakumar, CEO, HomeShop18.com, a digital commerce platform, was quoted as saying that his company tracks the entire customer journey, which includes customer behaviour—how customers look at the site and what products they usually choose, action taken by a customer on the website and how customers navigate the website.
“We use it (Hadoop) primarily for insights and analytics on how to show right recommendations to our customers,” Jayakumar was quoted as saying. With this the conversion rate for the company has gone up by 30-40% and the average time a customer spends on the website is up from 2-3 minutes to 5-6 minutes.
For Snapdeal.com too real-time analytics has become a key focus area for companies. The company has been one of the early movers in Big Data analytics for personalisation and recommendation so as to make product searches easier. So Big Data is the need of the hour.
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