Solving Cart Abandonment, One Click at a Time!
Hey there, fellow e-shoppers and aspiring product managers! We've all been there, right? You're browsing your favorite online store, your cart is all loaded up with goodies, and just when you're about to hit that "Buy Now" button, you suddenly think, "Hmm, maybe I don't need this right now." Next thing you know, your cart is abandoned, collecting digital dust in the depths of cyberspace.
Well, it turns out you're not alone. In fact, a whopping 70-75% of e-commerce shoppers in India do the same dance – they add items to their cart but ghost at the checkout stage! That's a lot of abandoned carts, folks.
Abandoning carts is like inviting guests to a party and then locking the door when they arrive. It's a problem that's been quietly reducing the revenues of e-tailers by around 40-45%. And if you're shopping on a mobile device, that cart abandonment rate skyrockets to 85%. Ouch!
Now, here's the real kicker – billions of dollars are spent on ads, fancy websites, and user experience design to get customers to visit online stores, but almost no one is thinking about how to keep them from bailing at the last moment. It's like cooking a delicious meal and then accidentally dropping it on the floor.
But fear not, because some clever folks are working on a solution. They're like the superheroes of the e-commerce world, tackling the cart abandonment problem head-on.
Meet BOLT and FAST in the US, and Xpresslane, Nimbbl, and Gokwik in India. These cool cats are like the precursors to what PayPal and Adyen do in the West. Even Visa and Mastercard are thinking about joining the one-click checkout party.
So, What's the Problem?
To understand the problem, let's hop into our time machine and go back 25 years. E-commerce was just a baby, and there were no tools to sell stuff online. You had to build everything from scratch. Then along came Amazon, and they made selling online a piece of cake. But there was a catch – selling on Amazon meant fierce competition, no brand loyalty, and no direct customer relationships.
So, online sellers decided they needed their own customer relationships. That's when e-commerce platforms like Shopify emerged, creating add-to-cart functionality. Sounds great, right? But as these platforms evolved and added more features, they became as fragile as your grandma's china. They weren't built to handle the massive complexity of the entire checkout process.
Here's the Real Challenge: Shopping Carts Are Expected to Do Everything
The checkout process is complex. It involves offering payment options, collecting personal info, processing payments, preventing fraud, and connecting to all the systems needed to make the transaction happen. Checkout has to be reliable and easy to use. For merchants, losing a customer at checkout is like dropping your ice cream cone on a hot summer day – it's a big bummer.
And here in India, e-commerce is set to be a massive $120 billion market by 2023, with non-Amazon, non-Flipkart sites making up $40 billion. But guess what? Checkout failures are causing losses worth $12-15 billion every year! That's a goldmine waiting to be tapped.
So, Why Does It Happen?
There are many reasons, but most of them are convenience-related. Have you ever abandoned a cart because a website forced you to create an account? Or because you had to fill in a gazillion fields of personal information? It's like they're asking for your autobiography just to buy a pair of socks.
And trust issues with new websites? We've all been there. You love the product, but you're not sure about giving them your personal and financial info. Or the painfully slow websites, limited payment methods (even with well-known brands), multiple payment failures – the list goes on.
So, What's the Solution?
Picture this – one product to rule them all! A single-click login across multiple e-tailers that stores your info, so you don't need to create an account every time. Your preferred payment option is saved, and it works on every e-tailer. Your identity is like a VIP pass, making your online shopping life smooth as butter.
And when this idea scales up, it creates a positive network effect. More merchants mean more customers, which, in turn, lures even bigger merchants to join the party. It's a win-win!
In India, there are over 120 funded direct-to-consumer (D2C) brands doing business on their websites, and over 800 brands are doing it! There's a massive market ready for this.
Who's Solving This in India?
We've got some Indian heroes working on this issue, like Xpresslane, Nimbbl, and Gokwik. They each have their unique solutions, but they're all on a mission to make your checkout experience as smooth as a Bollywood dance move.
Xpresslane is like your trusty sidekick, solving the one-click problem for users and boosting conversion rates for merchants. They're creating a network effect flywheel that's like a party where everyone's invited.
Gokwik is the OG of the industry. They're reducing Return to Origin (RTO) issues, focusing on UPI payments, and bringing in fraud detection capabilities. Plus, they insure fraud orders! They recently raised $5.5 million, and they're on a roll.
Nimbbl is following the fast lane, closely resembling what Xpresslane is doing. They've got big plans, and they're ready to shake up the game.
The Future Looks Bright!
India is a land of opportunities, and solving the cart abandonment issue is a D2C growth story with a sprinkle of embedded finance. It's the next frontier in the consumer-finance-tech combo, and the excitement is real!
So, stay tuned for this epic saga of the Indian checkout heroes. They're on a quest to make your online shopping experience smoother than butter chicken gravy.
And that's all for this episode. If you're into fintech, have questions, or just want to chat about this exciting space, feel free to reach out to me. Until next time, happy shopping, folks!