Future of eCommerce in India and its significance to a Common Indian Customer
Having noticed a tremendous innovation and growth
in the Digital Transformation space, I wonder what it would mean to be a normal
Indian consumer, who is now experiencing these changes. In this blog, I attempt
to understand and bring forth the perspective of their experience on these
wonderful E-commerce sites.
E-commerce
in India is experiencing an exponential growth which shall continue for years
to come owing to the penetration of Internet / Mobile in the untapped rural
population and increasing user base in the Tier 2 and Tier 3 cities. This is
coupled with the ever increasing coverage of diverse products in the E-commerce platform.
I can hardly
remember the time when I have bought a book from a Brick and Mortar shop in the
last 6-7 years, thanks to Flipkart and Amazon, but I can bet I never bought
anything online before that period. It's a drastic change which many of us
would have experienced.
The most important driving factor for the success of E-commerce in India is increase in the level of
trust for both the buyer and the seller. Since in the virtual world we don't
have the privilege of touch and feel, which are basis for gaining trust, it
becomes all the more challenging to persuade someone to buy.
Some other Entry barriers to E-commerce in India:
1. Perception of product is missing in the Online Purchase - Indian buyers still prefer brick and mortar
where we can try the product before purchasing
2. India lacks aggressive consumer protection law - People are still skeptical about the
quality of product purchased online. Most are still unaware as to where they
can file their grievances in case bad quality products are delivered.
3. Penetration of Credit card is low especially in rural areas
Success Stories:
But despite these challenges we have the success stories of
Flipkart, Snapdeal etc. They have successfully penetrated the entry barriers
and are now perceived as trustworthy medium to perform Online shopping having
won confidence both of the customers and the vendors.
Positive Indicators for E-commerce in India:
1. Internet banking / Phone Banking. High speed broadband internet penetration is
increasing at a fast pace. People are getting accustomed to using Internet /
Mobile banking to pay their bills, buy tickets and perform various financial
transactions.
2. Penetration of Mobile devices, smart Phones. There has been a tremendous growth in the number
of people using smartphones, tablets, and mobile devices. According to a recent
survey, The Mobile phone will be used by over 90% of the Indian population by
2015. M-commerce has picked up in the Digital Market place.
3. Increase in the credit card users. According to Credit Information Company CIBIL
there is increase in the usage of credit cards in the last few quarters. There
is around 30% increase in average balances per borrower in the last one year.
4. Encouragement of the vendors - Vendors are encouraged to sell their products
through Digital Commerce channel. The offers that they provide to the
aggregators are passed on the end buyers as attractive discounts.
5. COD - The Cash - On - Delivery being offered by some E-commerce providers intend to break the Entry
barrier which existed due to skeptical nature of costumers on Online payment.
6. Availability of large variety of product range which is generally not available in a single
brick and mortal shop.
Therefore, E-commerce in India has a bright future
especially in the B2C scenario thanks to the huge Indian population base, which
provided a vast domestic consumer base and is now being exposed to latest
technologies. According to a survey conducted by ASSOCHAM (Associated Chambers
of Commerce and Industry of India), online retail industry is likely to cross
70 billion by the year 2015. In future we expect to see much more innovation in
this space with the introduction of Mobile money, virtual trial platform and
many others. Happy Shopping Online to all.
