Rediff lines up e-comm thrust
Business Standard, (Arijit De), July 3, 2000

Rediff.com, the premier general interest portal aimed at the global Indian community, is planning a major thrust in its e-commerce initiatives to increase earnings from transactions rather than advertisement.

Its earnings from e-commerce initiatives at $441,000, or Rs. 1.92 crore in the 1999-00 fiscal was only 23 per cent of its total earnings, but saw a six-fold jump as compared with the previous year. The balance income at $1.46 million was from advertisement and services.

As part of the plan to grow the volume of e-commerce transactions on its site, it says in the American depositary receipt (ADR) issue prospectus, that include: the company plans to expand the roster of business participating in MarketPlace and expanding categories of products offered, enriching e-commerce capabilities including strengthening the site and logistics network to support greater transaction volumes.

Finally, Rediff.com will also make investments in enhancing consumer awareness of online shopping through extensive marketing campaigns.

The company has said that its increase in the e-commerce earnings in the last fiscal was primarily due to rise in the number of vendors supplying more products in the GiftShop and MarketPlace categories, which attracted more customers.

Its existing e-commerce services include MarketPlace, the shopping section designed to offer users direct access to specific branded prodcut lines from various manufacturers and vendors. Rediff.com also offers online reservations and ticketing facility.

Rediff.com is amongst the first in India to offer online book shop, music shop, and gift shop. It also provides users with the ability to use gift certificates for making purchases in several of the online stores on the portal. It also has credit card payment facilities, and has entered into agreements with HSBC, Citibank and American Express for online payment processing.

A major thrust in e-commerce has become essential as the internet industry has been clamouring that online advertisement has yet to pick up in India, and long terms survival will depend critically on the level of e-commerce transactions.

Unlike a business-to-business portal, which could make money from the start of operations through commission fees, a horizontal portal like Rediff.com has to depend on business-to-consumer transactions. Revenue flow from B2Cs essentially depend on the volume of traffic the site.

AT the same time, a reduction in traffic on the site may cause advertisers to renew their contractual agreement and thereby reducing advertisement revenues.