Why India will never see anything like Kozmo …

I am sure everyone is aware of Kozmo, the first ever e-tailer of sorts that was actually somewhat successful before closing shop in 2001, three years after its inception. Google Answers has a great thread giving background information about this company. Kozmo.com was started by Joseph Park, a Time Magazine nominated Innovator in 1997. There is a movie called e-Dreams that chronicles the growth and demise of this innovative Internet based retailer that actually delivered everything from ice cream to video tapes. The idea was to have inventory for common frequently ordered items, and to forge deals with other vendors for the remaining items.

It was ultimately the pricing and the incorrect and somewhat unclear target customer focus that killed Kozmo. The new CEO had lost focus, and was trying to compete with mail order companies citing quick delivery as the only USP for using Kozmo’s services. I would also say that the idea was pre-mature and ahead of its times. There were still no stringent rules and regulations about Internet privacy, and online advertising was still controversial and somewhat monopolised in the hands of 1-2 key players. All in all, a good time to make short-term money but not to write a sustainable business plan. Only a few companies survived the dot-com crash, and hence, I would not blame Kozmo entirely for its own debacle.

Now, when I say that an enterprise like Kozmo.com is never going to be sustainable in a country like India, I base my analysis on the relatively lower importance of the Internet in an average Indian’s daily life. I will stand up against all refutations who claim that it is only a matter of time when the Internet gains as much importance in India.

India differs culturally and socially from the US in more than a thousand ways. Inspite of the Internet and all that buzz, people prefer to carry on their lives using more personal communication means. The Internet is not personal enough to make any difference in an Indian’s life. Sure, it has already replaced newspapers when it comes to classifieds, and postal letters when it comes to time insensitive communication. People still love to go out with their families to shop, and students know better than to order pizza on the Internet. Very busy professionals can often afford manpower to do their chores for them.

Even then, all it takes is a phone call to your neighborhood super-store to get anything you want delivered free to your doorsteps without any minimums or delivery charges. And this has been in place before the rise of the Internet in India. There are companies like P&G India that have actually started telemarketing operations with free delivery. The prices are actually lower than super-stores or discount stores like Big Bazaar. The delivery times are minutes not hours, and you can order anything from the P&G catalog of products.

With all this aready happening, do you still think that there is a market for services like Kozmo.com in India? I certainly don’t, and I might be proved wrong in the coming years. All I know is that it would take a lot to have an average Indian consumer pay more to get what he wants in lesser time and without physical effort.

Addendum: I just came across a similar new service in the NYC area, called MaxDelivery.com

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