Electronic Commerce or E-Commerce is the business of buying and selling goods and services via the internet. India, with an internet user population of about 462 million (as of 2018) out of a total population of 1.3 billion, provides an opportunity for unprecedented growth to big e-retail players like Amazon and Walmart. Moreover, factors such as ease of doing business, greater internet penetration, increase in the number of mobile users and availability of multiple options in e-payments are changing the way firms transact.
India is the second largest online market place after China. Rather obvious considering that platforms such as Amazon face stiff competition from their Chinese counterparts such as Alibaba and JD.com.
India generated $16bn in revenue in 2016 from e-retail sales alone, and the figure is projected to reach $45bn by 2021 with the Indian e-commerce market predicted to increase by about 1200% by 2026.
With changing times, the way e-retail firms connect and offer value to their prospective customers is also changing. For instance, Amazon had started as an online bookstore, but later diversified into CDs, DVDs, video downloading and streaming and now sells everything across the spectrum.
Moreover, platforms such as Amazon, Flipkart and Paytm Mall attract massive crowds by launching limited period offers during festive seasons. Reports state that e-retailers like Amazon earned roughly INR15,000cr in just five days of sales during Diwali season.
Multiple payment options and an increase in the use of digital payment methods is also providing the sector with a much needed fillip. Marketplaces such as Amazon, Flipkart and others now accept payments through e-wallets, debit/credit card, BHIM-UPI app, net banking, cash on delivery etc.
Advancement in technology has also greatly helped the cause. Companies now use analytical platforms to study consumer preferences to build and market products that attract customer attention. It shouldn't come as a surprise if a product you viewed on Amazon later pops up on Instagram or Facebook.
Apple's Siri, Google Assistant and Amazon's Alexa enjoy first-mover advantages of voice recognition and intelligent searching technology. Amazon's Alexa also aids other e-businesses by providing them with some rather helpful intel about their competitors.
With factors such as these at play, the e-commerce sector in India is set to flourish.
The Way Forward
An up and coming industry, there is much the e-commerce sector in India can still emulate from successful counterparts.
Businesses are now shifting from being producer-centric to customer-centric. Many websites now offer customization options, which enable customers to build a product that caters specifically to their requirement. Companies like Etsy, Timbuk2, Inkess, Mymuesli, etc. provide customized shoes, handbags, i-phone covers, and even morning cereal. This helps companies build a loyal customer base and ensure greater customer satisfaction.
Marketplaces are now going the extra mile to deliver the best user experience possible. The traditional brick and mortar stores are getting replaced by smart stores. For instance, Amazon has opened three Amazon Go stores in its home market, Seattle. Here, the customers don’t have to stand in long queues to pay to the cashier. The stores have cameras and sensors at every point to record what you are picking up from the shelf, you can leave when you are done. The purchased items will directly be charged to your Amazon account.
Soon enough, products will be delivered at our doorstep via drones, reducing the order processing time from days to hours. Newer technologies bring greater efficiency. Artificial Intelligence, in particular, which has already started playing a vital role in our daily lives, is going to be used extensively in the years to come.
In conclusion, the future of e-commerce in India is rather bright with growth of the internet, burgeoning middle class and an unprecedented growth in technology providing the greatest impetus.
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