One of the biggest problems in India is that we think that we know everything :). As a result, we don’t want to listen to others. The 2nd problem is that under any circumstances we don’t want to listen to NO. The 3rd problem is each and every person has an opinion on each and every topic even if it is totally unrelated (don’t know ABC). Because of these 3 reasons, online business is not so successful in India. These observations are based on my interaction with clients :).
Many of my clients keep asking me for online business ideas. Some of them come up with their own online business ideas and seek my opinion. Remember they don’t want to listen to NO. Therefore, the objective of this post is to indirectly say NO to some of the online business ideas that i strongly feel that will not work in India.
In some instances, entrepreneurs argue what is wrong with the business opportunity? Let me be honest that there is nothing wrong in few business opportunities but maybe we are not ready for it. There is an another misconception that if you are from IIT and IIM then only you can become a successful entrepreneur. In other words, A degree from IIT or IIM is a must for a success of a startup. It is not correct. I shared 5 Critical Factors for a successful startup. Therefore, it is not necessary to be an engineer or MBA from IIT or IIM to be a successful entrepreneur. There are hundred of examples to share. It is important to get business plan right.
5Ws To Evaluate Business Plan
Now you must be wondering how to find out whether online business idea shortlisted by me is worth or not. As a layman, you only need to evaluate your business idea on following 5 parameters.
1. What: It means “what” are you planning to offer to target audience. It can be a service or product. In certain online business ideas, it is not clear what the online portal is offering or will offer. For example, one of the online grocery portals is selling clothes, utensils, home furnishing, gifts etc. Logically, a customer who visited the portal for grocery shopping is normally not interested in clothes, gifts etc and vice versa. It leaves the potential customer high and dry.
Therefore, the product offerings should be correlated and mention complete description. Whereas, in the case of services, you should share the clear scope of service. Don’t forget to mention the Inclusions and Exclusions. The list of do’s and don’t is long and i only shared the crux of the subject.
2. Why: You need to answer Why the customer will BUY from you? It can be because of low price or convenience factor or you are an expert consultant in a particular field. I am sorry to say but if you don’t offer a couple of convincing reasons to the potential customer then, unfortunately, it points to potential startup failure.
3. Where: Basically “Where” decides your reach or geography. Even though you have online business ideas but if it requires physical interaction then depending on the cost, which all geographies you can cover. The success lies to have wider audience across geographies though not feasible every time. If you are providing any services then you may explore as many online options as you can for wider reach.
4. When: Here “when” means your business road map. I plan to provide thousands of products or launch in 50 cities but it is not feasible to launch all categories or across geographies in one shot. The reason being, i might not have enough capital or resources or storage facility. Therefore, pluck low hanging fruits first. Trust me 20% of your products will generate 80% sales. Therefore, it is important to identify these 20% products and launch balance 80% in phases over a period of time.
5. Who: Last but not the least, Who is your target audience i.e. Who will buy your product or service. It is very important to define. It will help to gauge the demand for your product or services. I may operate in mass market or in a niche. The risk is high in case of niche target audience whereas competition is high in case of mass market product / service.
Based on the above mentioned 5W analysis, i concluded that there are certain online business ideas that will not work in India. Let’s check out
5 Online Business Ideas That Will Not Work In India
Here i would like to clarify that i am not referring to imitation jewelry. Though the angel investors and venture capitalist are quite gung-ho about online jewelry business. In my opinion, jewelry is a high-value and more personalized purchase. The biggest advantage of the online model is the availability of wide range of designs. At the same time, the biggest disadvantage is that you cannot deliver through courier. The product requires physical delivery.
Also due to wide geography the taste of customer in terms of design change every 200 Kms. In my opinion, the marketplace model can work better wherein a startup can tie up with jewelers across geographies. The value addition by online marketplace provider is assurance on quality and to ensure jeweler is not cheating the customers.
Online pharmacy is another exciting idea in the list of promising online business ideas. I myself ordered multiple times. My views are that medicine is something you need in case of emergency or immediately. For example, if i have seen the doctor and doctor prescribed certain medicines then i need it immediately. There is no reason for me to order online and wait for few days. There are enough and more chemist shops near my house. Moreover, online pharmacy discount is not a key consideration for the customer until unless you don’t need any medicine immediately.
In my opinion, online pharmacy works well in case a patient is on a regular dose of medicines or medication i.e. medicines for BP or Sugar. In another scenario, if you don’t find a particular medicine in chemist shops near you then you can order online.
These are low-value items and normally people don’t buy in bulk. Secondly, in most of the cases, stationery items are required immediately or on a priority basis. Lastly, the delivery cost eats into the profit margin until unless the order is bulk order. The damage during transit is very common for stationery items. Because of these reasons, the online business of stationery will not work in India.
4. Doctor Consultation:
When i bought my health insurance plan, the policy comes with a free add-on i.e. i can consult the doctor through online mode i.e. Doctor Anytime. In last 2 years, i never availed this service though it is free. Besides online mode, similar service is available over the phone. The online consultation concept is very popular in western countries. Whereas in India, the trust factor plays a more crucial role. Maybe the patients have a psychology that only trusted doctor can treat them professionally. On the contrary, in western countries, it is believed that doctor is a professional and who can be trusted upon. Lastly, a patient does not get mental satisfaction till he/she discuss the case with the doctor face to face.
To share an example of one of my relatives. They belong to a town A that is 70 Kms from Delhi. They stayed in this town for more than 40 years. Now whenever they want to see a doctor they travel to town A as their trusted or family doctor is in town A. In this case, can you expect people to pay for online or phone consultation with a doctor. I really doubt.
5. Wedding Stores:
In my post, High-Profit Margin Business Ideas for Premium Pricing i shared that wedding theme is a high premium business. Unfortunately, wedding theme and online business are not made for each other. Wedding shopping is more personalized experience and shopping anxiety is at its peak. The bride and groom would like to touch, feel and see before the purchase. Each and every item is handpicked. In fact, in last few years, i observed dedicated wedding retail stores. In these stores, you will find A to Z products related to the wedding. Therefore, it is very difficult to tap wedding theme for an online business.
Words of Wisdom:
The online business is easy to start but very difficult to succeed in this space. There is a common misconception that by simply launching an online business you will start getting orders is not correct. There are over 1 billion websites. Assuming only 0.001% websites are competing with your online business then in absolute terms you are competing with 10,000 sites. On top of it, if your online business ideas do not find too many takers then you can imagine what will be the fate of the online business.
I am not scaring the readers but just trying to caution that on paper a business idea might look great but you need to check the practical feasibility. I shared simple 5W analysis that will help to evaluate the online business ideas. It is always advisable to ride with the tide and create / find a niche for yourself rather carving altogether a different path.
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