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Article by Mohan Babu


Aftermath of the e-commerce revolution

Indians who came to the US as ‘producers’ of e-commerce technologies realised that they could also be sophisticated users of these technologies. Many ended up becoming voracious consumers of these slick e-commerce applications that made life simpler, says Mohan Babu

Tech sector is known to spew buzzwords that fade into oblivion faster than one can say Data Warehouse. There are, however, a few technical innovations that catch the fancy of a whole generation. E-commerce, as a buzzword and a serious area of Information Technology, burst into the mainstream during the latter half of the nineties and is as already stale as yesterday’s pizza. However, in the wake of its revolution and growth and as some might say, its premature death, it left behind technologies, applications and ideas that are going to stay with us for a long time.

There have been innumerable books and articles written about the dotcom burst and how it helped propel the economic slowdown that we are seeing now. I am not going to go over those “horror stories” or even talk about the boom-burst cycle. However, there is little doubt that a lot of good came out of the e-commerce revolution that we experienced. Many Indians, especially tech-savvy youngsters got a once-in-a-lifetime opportunity to launch a career and set sail to distant shores of Boston, Liverpool and Santa Clara. They got an opportunity to partake in, what some call, the largest creation of wealth in human history. Sabeer Bhatia, who was shrewd (and lucky) enough to walk away at the right time after selling to the software giant Microsoft, became an Icon of Indian entrepreneurship and success. Indians who came to the US as ‘producers’ of e-commerce technologies realised that they could also be sophisticated users of these technologies. Many ended up becoming voracious consumers of these slick e-commerce applications that made life simpler.

Way back in 1997, on discovering the joys of Internet surfing, I bumped into (then) little-known online bookseller who was willing to take credit card details over the Web and ship the orders I placed ‘online’. Before coming to the US, I hadn’t even done any shopping through catalogue retailers and here I was, giving my credit card details to an online retailer. It was a leap of faith for me. Doing this, I knew I wasn’t alone. Of course, it helped that I knew a couple of Indian friends who worked for that bookseller who would wax eloquent over the dream that their company was out to capture the world of book retailing. If only my leap of faith had been strong enough to motivate me to put my money where my mind was...I would have bought a few hundred shares of Well, we’ll not even venture down that path...

Of course, my friends, colleagues and I gradually started trusting most of the large online retailers and took to buying goods and services over the Web. When my bank offered me the chance to pay all my bills online, I jumped at the opportunity. Eventually I got sucked in, doing every conceivable thing over the Web trading stocks, managing my portfolio, planning a vacation...the whole nine yards. Needless to say, the dotcom burst has done little to dampen the enthusiasm of my fellow Indians, especially as consumers of e-commerce technologies that have become a way of life.

Indians in the US are perhaps among the top ten percentile when it comes to using online tools and technologies. Case in point, Net meetings, which started off as a means for geeks to exchange instant messages over the Internet has become as ubiquitous as telephone, services and e-mail. No wonder Microsoft and AOL are fighting a bitter war to capture our eyeballs. Instant message sessions are a convenient and cheap (actually free) means of communicating with parents, relatives and friends in India. Voice chat is really giving a run for the money to all the long distance telecommunication giants.

Realising the potential of Indians in the US, a number of entrepreneurs jumped in to build “portals” targeting this community. Even a year ago, there were over a dozen portals offering services ranging from directory listings to chat and bulletin board services along with news and information. The dotcom burst didn’t spare them. Giants like and that were started with a lot of fanfare and pizzazz are nowhere to be seen. Of course a handful of them are still surviving, and had the good fortune of cashing in on their IPO and are not too concerned about burning through their cash. A few small directories like have survived, probably because they were not overly ambitious and didn’t expend too much on buying hype. Of course, as the Indian community in the US continues to grow, we are going to see a lot of consolidation in this sector too.

A number of online grocers have also jumped in to capture the Indian audience., flush with venture capital funding seems to be going strong, so is The business model of these retailers is simple Indians in the US still love to eat ‘dal chawaal’ or ‘sabzi roti’ and they aim to cater to our tastes. There are Indian grocery shops all over the country, which manage to charge exorbitant prices for the most mundane items. The online bazaars are trying to bypass these retailers and sell directly to us, the consumers.

The flip side of all the services being offered online is the blind faith that it instils in us. A few months ago, there was a glowing review of an online retailer,, in the revered business journal - Wall Street Journal. After reading the article, I was enthused and went ahead and order a few knick-knacks from them, which were priced at three times the normal price. In theory, they were supposed to send me a rebate check for the items that I bought. In the physical retailing world in the US, coupons and rebates are the norm and people try to grab a bargain when they can, hence this offer didn’t sound that ludicrous. A few weeks before I was supposed to receive my rebate-check, the company declared a chapter 11 bankruptcy. Just goes to prove that if it is too good to be true, it probably is.

E-commerce as a revolutionary way to do business may be dead but the mundane applications and business models that the e-commerce technologies are trying to support are here to stay. Even after the so-called ‘meltdown’, we are seeing a growth in the use of technology as a means to connect the ever-growing Indian populace in the US with life and things back home.





About the Author

  • A Bio and profile of the author, Mohan Babu, can be found at his homepage
  • Mohan has authored a book on Offshoring and Outsourcing (Publisher McGraw Hill, India), a link to which can be found here
  • Mohan has also authored an Online book on "Life in the US," available for free download.
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    ©Mohan Babu: All Rights Reserved 2005

    Mohan Babu is an international consultant trying to find the ‘sweet spot’ where IT meets business. E-mail: mohan He is also the author of a recent book on "Offshoring IT Services"

    All rights are reserved. Mohan Babu ("Author") hereby grants permission to use, copy and distribute this document for any NON-PROFIT purpose, provided that the article is used in its complete, UNMODIFIED form including both the above Copyright notice and this permission notice. Reproducing this article by any means, including (but not limited to) printing, copying existing prints, or publishing by electronic or other means, implies full agreement to the above non-profit-use clause. Exceptions to the above, such as including the article in a compendium to be sold for profit, are permitted only by EXPLICIT PRIOR WRITTEN CONSENT of Mohan Babu. 

    Disclaimer: This document represents the personal opinions of the Author, and does not necessarily represent the opinion of the Author's employer, nor anyone other than the Author. This Article was originally published in Express Computers


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