Facebook gifts and its impact on Social Gifting Startups in India

Note: This article originally appeared on Lighthouseinsights.in as Facebook Gifts, Will It Impact Indian Social Gifting Startups? 

Last month Facebook made a quiet re-entry into its previously mildly successful segment ‘Gifts’. Back in 2007, Facebook had introduced virtual gifts which could be sent to a friend for any occasion, these gifts cost anywhere between $1-3. In 2008, Jeremy Liew of Lightspeed Venture Partners had quoted, “Since there were 322 gifts available for sale when we completed our last survey (Jan 8th, 2008), that implies that Facebook is selling just over 270k digital gifts per week. At $1 per gift, that implies an annual run rate of just under $15m.”

This time around, in 2012, Facebook has managed to take the gifting business one step further and facilitate offline gifts. How exactly did Facebook manage this? Besides its vast resources, Facebook has managed to scale Facebook Gifts across its platform by building on the expertise it acquired through its acquisition of Lee Linden and Ben Lewis’ Karma app.

To begin with, Facebook has decided to limit the value of Gifts on its platform to below $50. “Fifty Dollar deals sound like a small portion of the eCommerce market”, says Yariv Dror, StoreYa.com (Facebook store platform provider) CEO, “but our numbers show, that 57% of the millions of products that have been imported to Facebook using our platform match this figure of $50 and below.

In September, I did a post on Social Commerce and where it was likely to be heading.

Facebook Gifts and India

By entering the physical good space, Facebook will not only be competing with retail giants such as Flipkart, eBay and the hoards of other ecommerce companies in India but against a multitude of startups like Badhai, 99presents, Giveter and so on. Badhai allows users to send gifts vouchers to their friends; they have recently added group and social gifting. 99presents helps you find products your friends from across different eCommerce sites like Amazon, Flipkart, Etsy, ThinkGeek, etc. While Giveter recommends gifts based on its own secret sauce and the recipients’ Facebook likes.

For those who want to ride the Facebook Gifts wave here in India, as of now there is no news on when the feature might launch in India but Facebook is accepting proposals from Vendors who might want to sign up to offer products as a part of Facebook Gifts. If you want to sign up as a vendor, you can do so here.

India has a substantial number of Facebook users and the model that Facebook Gifts follows might make it relatively easy for them to penetrate the market rather quickly. Facebook does not have the delivery logistics that Flipkart does. Hypothetically, this could be a possible hindrance for Facebook Gifts to grow. How do they overcome it? They ask vendors to sign up, these vendors already use their own logistics providers, and Facebook only brands the gifts for e.g.

Facebook Gifts branding

[Image credit: Techcrunch]

Facebook gifts hasn’t launched in India, yet. And when it does, instead of looking at its impact on companies in social gifting space in India, I believe it could have a significant impact on all ecommerce segments in India.

Further to its commerce ambitions, Facebook has also launched a new feature called Collections which is currently being tested with certain select brands like Pottery Barn, Wayfair, Victoria’s Secret, Michael Kors, Neiman Marcus, Smith Optics, and Fab.com All Facebook reports that Collections enables Facebook users to not only like, but collect, want, or buy products that brands share through images on the social network.

Would love to know your thoughts about the new features Facebook has recently added.

Social Commerce: Where is it heading?

Social commerce has a simple value proposition, i.e. it makes it possible to measure and manage word of mouth.

Multiple studies into this subject have thrown up some interesting findings

  •  62% of online shoppers have read product-related comments from their friends on Facebook
  • 75% of shoppers who read social sharing comments have clicked on the product link in their friends’ Facebook posts, taking them to the product page on a retailer’s website
  • 81% of consumers who purchase products they learn about through social sharing are valuable social sharers themselves, thus creating a cycle of sharing and buying.
  • 32% of visitors are more likely to stay and shop on a site that shows activities of shoppers who have purchased there.

Read Social Impact Study 2012: Social Sharing as Helpful as Google Search in Shopping

What this study shows is that social commerce is that  social media content can generate strong word of mouth which can be manoeuvred to generate sales.

The power social commerce can be understood using referral economics of word of mouth. Let us take an example of Apple Computers to understand this better

Source: Net Promoter Economics: The Impact of Word of Mouth

Facebook and social commerce

Forrester Research’s Gina Sverdlov has done an extensive study on THE FACEBOOK FACTOR – Quantifying The Impact Of A Facebook Fan On Brand Interactions.  According to her, “Using regression techniques, the study provided evidence to support the insight that your Facebook fans are more your most valuable customers.”

(customer value = purchase value + referral value)  

“Specifically, the study found that fans of a range of brands (the study focused on Coca-Cola, Blackberry, Best Buy, Walmart) are significantly more likely than non-fans to

  • Consider buying
  • Purchase (79% vs 41%)
  • Recommend (74% vs 38%)”

What is equally important to understand here is that boosting the number of fans on a Facebook page (Hilariously chronicled here: Arre Sir, We Will Get You 2250 Fans. That’s Our Headache!) isn’t the solution to exploring the commercial aspect of your page.

While dealing with Facebook fans always remember:

  1. The power of the Like button is not that it creates fans, it IDENTIFIES them.
  2. Your Facebook page is like a honey-laden flower that  ATTRACTS your most valuable customer and lets you target them.

Instead, reward your fans. Use your page to drive up engagement.

Flipkart’s newest product: Trust

Logo of Flipkart.com
Flipkart.com (Photo credit: Wikipedia)

India’s most famous E-commerce company Flipkart (they aren’t the biggest, that would be mjunction) has been around since 2007. Over the last 5 years, they have emerged as a clear favourite among customers owing to their almost delightful customer service.

Indiamart introduced Cash-on-delivery back in 2001 and then discontinued it in 2003. Flipkart reintroduced Cash-on-Delivery and this feature has now become one of the most crucial payment methods for Indians shopping online.

The point here is, back in 2007, Flipkart started with selling books online. Five years later it has  steadily scaled its business by foraying into categories like computers & peripherals, CDs & DVDs, games, home and kitchen appliances, mobile & accessories, personal and healthcare equipments ( I am sure there they have added more recently, the latest being baby products).

Indians can be frugal by nature, and getting deep discounts with the added benefit of free home delivery drove Indians to shop online. Along the way, Flipkart managed to delight its customers with fast deliveries.

Now in the 3rd quarter of 2012, things look different. Flipkart now wants its customers to shop for a minimum of Rs 300/- to avail of free delivery (Flipkart websiteHow much are the delivery charges? Flipkart provides free delivery on all items if your total order amount is Rs. 300/- or more. Otherwise Rs. 30/- is charged as delivery charges.)

Flipkart is also no longer the cheapest options available online. Below are some screenshots of randomly selected products from Flipkart’s top selling categories:

Books

Mobiles

Electronics

This brings us to an important junction, if people came to shop on Flipkart for price concessions and delivery convenience, why are they still here. The answer to that could very well be Flipkart’s most important product category yet, “Trust”. Flipkart has managed to build a Reputation (dependable and quick), which has created Brand value (reliable and delightful), which over time has built consumer Trust in the brand.

It is this trust in the brand that is being subliminally reinforced by their newest Advertising campaign “Don’t shop it, Flipkart it” (the complete Flipkart Advertising Campaign, August 2012)

Another perspective by Alok Kejriwal – Flipkart ads on TV – are they building the online category at their own cost?

Do share your thoughts.

The photoshop magic behind McDonald’s advertising campaigns

English: The mdonalds logo from the late 90s
McDonalds (Photo credit: Wikipedia)

Last week a customer from Toronto named Isabel M. got onto a website created by McDonald’s Canada, which allows customers to ask any question they want. Her question was, “Why does your food look different in the advertising than what is in the store?” Looking at this as an opportunity to get some good public opinion going in favour of McDonalds, Director of marketing for McDonald’s Canada, Hope Bagozzi, addressed the question herself.

Bagozzi enters a typical McDonalds and orders a quarter pounder and takes it along with her to the Watt International,the advertising agency, to get it shot. McDonald’s claim is that the only doctoring they do is to make the ingredients visible so the consumer. Towards the end, Bagozzi also adds that the photoshop they use on the final images is only to “enhance the color and any accidents that might happen during preparation, which obviously doesn’t show the product in its best light.”

I am impressed with courage to take the customer behind the scenes. What do you think? Are revealing videos like this a good marketing strategy for McDonald’s? Or is the risk of potentially negative PR too great to consider something like this for your own company?

The technology behind Apple Inc’s own Mapping system

Image representing Apple as depicted in CrunchBase
Apple Inc via CrunchBase

Apple just announced that they will no longer be using Google maps and will instead be using their own Maps on all iOS devices. Back in 2010 when SAAB filed for bankruptcy, an unknown company bought their missile guiding system. This unknown company was later identified to be Apple Inc. This missile guiding technology now forms the backbone of their new Mapping system.

How does this technology work

The video above shows a  corporate version of the process, which, as described by an article in MIT Technology Review, works in the following manner:

“C3’s models are generated with little human intervention. First, a plane equipped with a custom-designed package of professional-grade digital single-lens reflex cameras takes aerial photos. Four cameras look out along the main compass points, at oblique angles to the ground, to image buildings from the side as well as above. Additional cameras (the exact number is secret) capture overlapping images from their own carefully determined angles, producing a final set that contains all the information needed for a full 3-D rendering of a city’s buildings. Machine-vision software developed by C3 compares pairs of overlapping images to gauge depth, just as our brains use stereo vision, to produce a richly detailed 3-D model.”
 

Fascinating technology? Let me know your thoughts.

How to build a community around your Startup

market 1
(Photo credit: tim caynes)

What are the reasons that some startup succeed while some fail? Why do products instantly attract a multitude of users while other still lag at user acquisition, even after considerable marketing expenses?

The answer to this can be a variety of reasons such as user interface, design, customer service, utility value and sometimes even price. But very often one feature that gets left out is the impact and support of the community around.

A vibrant community can be a magical marketing and sales tool for a startup. While it is imperative for a startup to have a great product/service, an enthusiastic community around it can aid the company in garnering more attention, providing insights and gaining critical early feedback

While in India, our ecosystem surrounding Startups is still in the nascent stage, there are communities developing in Bangalore and around the Delhi/NCR region. One of the biggest problems facing tech entrepreneurs in India is the relatively small number of early adopters. In an excellent article about the “two speed” state of Indian market adoption, Mukund Mohan writes, “The Innovators (less than 1 % of the population or 12 Million individuals) in India (entrepreneurs mostly) who conceive and develop products for the Indian market and the early adopters (less than 5% of population or approx 60 Million individuals) together make up the entire “early adopter” category. Unfortunately less than 30% of them have both the interest, and the desire to be early adopters of technology.”

If you are a technology company, how do you build a community around your company?

1.Start early; make the community an integral part of your system: Start a blog before you actually launch and let people know what you are doing. Building a community takes time. Be patient.

2.Value your initial customers: Those first few people who sign up for your product are there out of choice, they have found your product and they are sticking by it because they love it. Treat them well. Value their feedback.

3. Let your customers know they are special: Marketing dollars might get you signups but word of mouth will get you user engagement. Don’t just value customer feedback; let your customers know that you are ‘listening’ and that you value their feedback.

4.Establish a mutual relationship: Once your community starts growing, as difficult as it might be, acknowledge contributions and hold events where your customers can interact with you or your team. This can act as a cohesive force and take people beyond just a bunch of people using your product

In a day and age when online customer loyalty isn’t really high, a community around your product can not only be your loyal user-base but also your very own cheering squad.

Do share your thoughts.

What are the key differences in being a tech entrepreneur in US and India?

I read this question on Quora and thought of adding my perspective to it. I am going to address the point of key differences between these two countries and their eco systems.

1. In India, our ecosystem surrounding Startups is still in the Nascent stage. Most people would say that the ecosystem is absent, but I don’t think as of today (May 2012) that is the case. We have certain IIT’s(Indian Institute of Technology) running incubators, we have Accelerators and Incubators such as http://themorpheus.com( who are in their 7th batch) and we have multiple VC’s investing their money in Indiann startups.

2. Though the First wave of Tech innovations in the US came around 1997-2001, we in India were a little late to catch on and had a good run around 2002-2005. These companies either had decent exits, got acquired or went to IPO’s. Which brings me to the important point, in India we are Now seeing second generation entrepreneurs. These people have seen the ups and the downs and are willing and able to mentor the current crop of entrepreneurs. This segment would include fantastic people like Mahesh Murthy & Alok ‘Rodinhood’ Kejriwal.

3. One of the biggest differentiating factors between being a (Tech) entrepreneur in the US and in India is that, in the US, failure is celebrated. In India, that may not be the case. In India we are very particular about the importance of “Completing one’s Formal Education”. Until the turn of the millennium, if an Indian girl/boy told their parents that they were “dropping out of school” to take up entrepreneurship, life would be very difficult (not impossible, but extremely difficult) for them. This mindset is also changing and most students are already forming small companies and servicing clients well before they are done with college.

Desert Rider
Jugaad: A mix of a motorbike and a tempo (Photo credit: Meanest Indian)
 4. To conclude, Indians, by nature are extremely entrepreneurial. They always find ways to complete a task in a way that would require less time and make optimal use of resources. Hence Local innovations in Agriculture and other such sectors which Indians have been introduced to for decades see a lot of Jugaad (http://en.wikipedia.org/wiki/Jugaad) But technological adoption in India has been slow through the 1980’s to 2000’s. Now that Technology has made inroads into India, I definitely hope to see some path-breaking innovation coming out of India in the near future.

For more on answers on this question, you can go to this link on Quora

You can also Follow me on Quora

Let me know your thoughts.

Want to ‘Social’ise your Startup? Heres How

Image representing Facebook as depicted in Cru...
Image via CrunchBase
  1. Build a company that’s social from the beginning. Create your social media accounts as you grow to develop an early fan base. Whether it’s limited to only a twitter account or you want to indulge various mediums depends on the nature of your product, but the important thing to remember is that you should use your account for more than just marketing. Get the word out, engage your prospective customers, find employees, and you could even solicit potential partners.
  2. Maintain a Blog. Everyone loves a success story. People love to read stories of people who start off from the bottom and work their way up. Tell your story. Connect. Create lasting relationships. All this while keeping your stakeholders informed about the developments within the company and a sneak peek into things to come.
  3. Focus on the platform that’s most important to you. Analyse the strength of your product and choose a platform which complements it. Pinterest might not work for some, as could be the case with Youtube. Keep in mind that content is very important and stretching over too many platforms might dilute your message.
  4. Consistency creates recall. Ensure you product has similar handles across multiple platforms. This breeds recall, which over time can create brand value.
  5. Identify key influencers and treat them like they mean the world to you. Every product has early adaptors, treat them with love, and incorporate their suggestions. Remember, they are not getting paid to do this; they are doing this because they love your product.
  6. Most Important: Drive traffic back to your website. Creating a community on Facebook that never visits your website might not be the best idea. In most of your posts, ensure you link back to your website. Give people a reason to come to your website, find ways to engage them there, and help them get into a habit of coming there. Goes without saying that you should ensure you have social plugins to enable users to bring their friends onto your site.

Homeless people as the new 4G wifi hubs!

An unconventional experiment which involved using homeless people as 4G mobile wi-fi hotspots has gather a lot of crowd at the SXSW happening at Austin, TX. The project is defined as a “Charitable Experiment“.

A lot of homeless men equipped with Verizon MiFi’s wearing specially printed t-shirts which say, for eg., “Hi, my name is Clarence, I am a 4G hotspot, SMS HH Clarence TO 25827 for access” with a URL of the Homeless Hotspots website. It suggested that public pay $2 for 15 minutes Wi-Fi access to the internet. Suddenly, a lots of sparks generated around the world as the news spread, some thought of it as an awesome idea, which may help the homeless people, while other called it downright demeaning.

Launched as a ‘beta test’ by advertising firm BBH Labs said “there’s an insane amount of chatter about this, which although certainly villainises us, in many ways is good for the homeless people we’re trying to help”, on their blog. The advertising firm, apparently says that it is trying to modernise the concept of street newspapers, which are created and sold by homeless people. Instead of selling a newspaper, the homeless person now sells Internet access as well as access to the newspaper’s content.

BBH Labs Director of Innovation Saneel Radia said, “It’s unfortunate how much information being shared is incorrect, this project is not selling a brand and there is no commercial benefit whatsoever to BBH Labs. Each of the Hotspot Managers keep all of the money they earn. The more they sell their own access, the more they as individuals make.”  What do you think?

via: BBC and DNNetworks

Innovation: Holidays packaged differently – in a “box”

Offered under the Mumbai-based SOTC brand of global travel company Kuoni, Box Holidays are tangible, prepackaged travel offerings that can be purchased online or off the shelf in a participating retail store. Rather than having to spend time and effort researching options with a travel agent, purchasers can simply buy a Box Holiday, which features all the key details on the outside of the box, including price, validity period, service inclusions and exclusions, complimentary offers, loyalty benefits, discounts, cancellation rules and hotel images.

Buyers (or recipients) of SOTC Box Holidays need only call to schedule the dates on which they’d like to redeem the package. Pricing begins at INR 7,000 for a three-day, two-night domestic getaway for two, and travel can be done at any time within the package’s validity period. International packages begin at INR 47,410 for four days and three nights, and price protection against exchange rate fluctuations is included. Also packaged into many Box Holidays are holiday vouchers, value add-ons, discount coupons, destination information, tips and other freebies. SOTC Box Holidays are available at Globus stores in Mumbai and select BigBazaar outlets in Delhi, as well as online.

Continue reading “Innovation: Holidays packaged differently – in a “box””

What Every Manager Should Know About Managing Gen Y – AMA

Welcome, Generation Y
Born between 1980 and 1995, Generation Y boasts 70.4 million members, representing 26% of the American population and more than 35% of the workforce. Like any group of people, you will find some difficult or impossible to manage, but with most, you’ll do just fine as long as you’re willing to work with their idiosyncrasies.

Generation Y has different work requirements and expectations than the Baby Boomers and Gen Xers who manage them. Understanding these differences will help managers to be effective and their Gen Yers to flourish.

The goals for managing Generation Y include:
1. Help them integrate into the work setting without scaring them off or turning them off.
2. Provide them with solid primary experiences that lay the groundwork for their careers.
3. Keep them from self-destructing.

Tips for Managing Generation Y
1. Create Opportunities to Bond
One complaint employers have about Generation Y is that they don’t seem to care about their jobs. We agree: Many Gen Yers, especially the younger ones, don’t care about their jobs in the same way many of us didn’t care about jobs when were that young. But like any generation, they need jobs to earn money to pay the bills. Given their close family upbringing, jobs that offer Gen Yers a sense of belonging and a family-like atmosphere will have the most appeal to them.

Gen Yers like to feel bonded to their bosses. This puts you in the role of concerned coach. It’s a step beyond “benevolent boss” but short of “loving parent.” You still must insist they follow the rules, complete their tasks, meet their deadlines, and produce for the organization. If they do, you will applaud them. If they don’t, you will help them, coach them, encourage them, and counsel them—just like their teachers did at school and their moms and dads did at home. If they continue not to meet expectations, however, unlike their parents, you will fire them.

2. Tell It Like It Is
Unlike older Traditionals and Baby Boomers, who had to compete for every award, Generation Y got trophies for just showing up. As a result, there is a perception that they can’t handle bad news because they’ve had it too easy. This may be true for some, but they’ve also witnessed tremendous tragedies from Columbine High School to the Virginia Tech shootings. Generation Y wants to know the truth and sugarcoating bad news doesn’t help them develop, nor does it enhance their trust in you. If the assignment you are giving them will be hard, tell them so, but follow up with why you think they can handle it. If they have done something incorrectly, let them know and tell them how they should change it in the future.

Continue reading “What Every Manager Should Know About Managing Gen Y – AMA”

New Strategy: City dwellers to be enlisted and rewarded for delivering DHL packages

We’ve seen numerous efforts to reduce the energy used and urban congestion created by the small-package delivery industry, including both neighbourhood pickup spots and a ride-sharing program for packages. Combining a little bit of both ideas, bring.BUDDY is a program that will soon be tested out by DHL to recruit city dwellers to deliver packages along urban routes they’d be taking anyway.

Created last year for DHL by a team of students at the HPI School of Design Thinking at Germany’s University of Potsdam, bring.BUDDY taps all the consumers moving through a city each day, whether via bike, public transport or on foot. Interested participants indicate their travel route for the day using a downloadable Smartphone app; a text message then lets them know of any packages needing delivery along the way.

Continue reading “New Strategy: City dwellers to be enlisted and rewarded for delivering DHL packages”