Over the years, e-commerce has become a significant part of our lives in one way or the other. For some, it means online bill settlement. For some, it means job search. For some, it means life partner search. And for a lot of us, it has become our bread and butter – online selling.
But the online retail industry did not just come about, it took 15 years and more to get its foothold in India. Why did it take so long? An Assocham survey indicates 88% growth in 2013 as compared to the previous year, ie. the industry grew from $8.5 billion to $16 billion. This growth happened after overcoming a number of barriers, including a five-year long dip.
Economic Times traced some of the major milestones and the way forward in their report (major points indicated below):
1995- The internet Wave
With the entry of internet in India, B2B portals, matrimonial sites, job search directories and online stores through rediff.com and indiatimes.com were set up. But they did not thrive due to factors like:
- low internet penetration
- slow internet speed
- small user base for online shopping
- inadequate logistics
- low consumer acceptance
- lack of tangible revenue model
2005- Low cost carriers and e-ticketing
With the entry of low cast carriers in the aviation sector, the online travel industry took off leading to e-ticketing sites. Indian Railways implemented the change too with online ticketing facilities and digital payment facilities. Thus, people started becoming less skeptical about online purchases.
Gradually etailing set in due to:
- change in consumer lifestyle
- rise in disposable incomes
- need for convenience
2007 onwards- The new age e-commerce
Start-ups like Flipkart, Infibeam, Myntra and Snapdeal entered and revolutionised the online retailing scene in India with their rigorous marketing and services like group buying and daily discounts/deals. While strengthening the operational aspects, focus was on getting customer loyalty to widen user base with heavy and unbeatable discounts.
From a $2.5 billion industry in 2009, e-commerce in India grew to $6.3 billion in 2011 and further to $16 billion in 2013. Predictions and reports indicate explosive growth to $56 billion by the year 2023.
What contributed to the explosive growth of online selling? With the introduction of COD and free return policies, online sellers were able to convert skepticism of customers into loyalty. With price wars and product comparison sites, customers could check out their desired options (as in a physical store) and review before deciding on their final choices.
Joining the social media bandwagon, online retailers started making their presence on facebook, twitter etc. to connect with customers not only to engage in understanding their requirements but also to advertise and get feedback on products.
The Next Steps?
- Mobile apps– Online retailers have already started developing mobile friendly websites and apps to leverage on the growing usage of smartphones.
- Technological innovations– It is crucial to keep pace with the growing e-commerce market.
- Smaller towns– Big brands and stores are not physically present in tier 2 and 3 cities. With online retail, customers from these areas can access anything and everything without the limitations of geographical boundaries.
- Innovative logistics– Everyone realises the need and importance of this crucial aspect. Irrespective of difficult physical terrains or potholed roads or inefficient railway systems and such, online retailers and marketplaces are looking at alternate options, including building their own delivery network where possible, to ensure speedy and time deliveries to customers.
- Brand consolidation– With some consolidations that have already happened, more could be on the way to keep up with the pace of growth of the industry.
- Personalised catalogue– To ensure maximum customer satisfaction, online stores record the browsing behaviour of customers to understand their preferences and then offer products and discounts accordingly.
The roller coaster journey of e-commerce in India continues and by the looks of it, e-commerce has already proved that it is here to stay. The initial failures need not be repeated, but newer heights are sure to be achieved.
Don’t you think so?