One e-commerce company is learning by experience that overseas sites set the trends, but local consumers wear the trousers.

Nasdaq-listed Rediff.com India Ltd., the only Indian Web site so far to raise money in the U.S. stock market, is India's answer to Yahoo! Inc. - a news and search portal with shopping services, catering to Indians at home and abroad. So there was confusion when many shoppers reported they couldn't find what they wanted through the site's search engine. It turned out that the standard e-commerce software Rediff.com was using couldn't handle Indian-English peculiarities, such as substituting "trousers" for "pants." Rediff.com had to build its own search engine.

It's just one way the five-year-old company is learning to balance lessons from India and the West. Rediff.com's 52-year-old founder, Ajit Balakrishnan, an advertising veteran (Rediff.com's names comes from Rediffusion Advertising Pte„ an agency Mr. Balakrishnan founded in the 1970s), makes frequent trips to the U.S. and online visits to U.S. market-research sites, to find out what is and isn't working for U.S. e-commerce sites. A generation older than most of India's 'Net mavens, Mr. Balakrishnan is considered something of a business guru within the country's Internet community. He says investors tend to be strict about not letting sites repeat the mistakes made in the U.S.

"The source of capital goes back to Wall Street," Mr. Balakrishnan says. "That received wisdom is spread throughout."

Though grateful that India has been spared some e-commerce bloodletting, Mr. Balakrishnan thinks it would be wrong to adopt America's latest lessons wholesale. India's e-commerce business in 2000 is like America's in 1997, he says: Consumers are just starting to trust that credit cards can be used safely for Internet purchases, and the overwhelming majority of online-shopping excursions end without a sale.



Cart Unknown

A recent survey done by the company showed that just four of every 100 people entering Rediff.com's site actually put something into their shopping cart, and 93% of those who put something into their cart moved on without buying. This figure, the so-called drop-off rate, is between 60% and 80% in other countries, says Mr. Balakrishnan. It occurred to Rediff.com officials that the cart itself might be the culprit. The shopping cart was an easy metaphor in the U.S., but India's shops are generally too small for shopping carts.

And so, the Rediff.com team is redesigning the shopping site, with one eye on American Web sites, another on local conditions. On a recent visit, a prototype was under construction at designer Zereh Lalji's desk, in Rediff.com's headquarters in a squalid central Bombay neighborhood. Ms. Laiji, 26, has been with Rediff.com since graduating from Bombay University with a master's degree in sociology in 1997 and teaching herself Web design.

She rifles through a printout of the seven Web pages viewed in the course of purchasing a camera on Amazon.com, and says, "It would be disastrous if you had something like this in India," when Internet connections are shaky. (Rediff.com says sales jumped more than 60% when it collapsed its nine shopping steps into three). But she borrows something from a U.S. online grocer, Webvan.com: a shopping list that stays in the same spot while the user shops. Indians will identify more closely with a list that remains on the screen while they shop than a shopping-cart icon they have to click each time they want to consult it, the company believes.

Mr. Balakrishnan says the 24-hour help number should be highlighted for emphasis. Ms. Lalji experiments with a vibrant yellow. "I would love to see no words in the instructions," he says.



Fewer Words

Rediff.com’s bet is that stripping away words – including most product reviews – will help customers proceed undistracted to the electronic checkout. "The first 10 million users were relatively sophisticated," Mr. Balakrishnan says. "The next 10 will never be more sophisticated." Though Rediff.com has yet to earn a profit (net revenue for the quarter ending in December was $1.75 million), analysts expect it to do so this year.

It is at the elite level that the American experience transfers best. For example, Mr. Balakrishnan predicts Indians will protest the same way Americans did at the idea of having their Web clicks tracked for marketing purposes. "The kind of people who react is not the public at large, but the 1% who care, and that 1% is very similar throughout the world," he says. So Rediff.com decided to track only a customer's actual purchases.

When it comes to using the information to suggest future purchases, Rediff.com won't be able to use the U.S. as a template. Not only is the number of shoppers much smaller than in the U.S., but the market is more complex. By the time it divided its Indian-pop and traditional-music selections by region and style, for example, Rediff.com had no fewer than 300 categories.