Indian ecommerce needs FDI in B2C segment, study indicates

According to a report released by India Opportunity Advisors (strategy consulting and communication company), the ecommerce market in India is set for growth at a compound annual rate of growth (CAGR) of 80 percent in the coming six years. Prerequisite for this is government permission to extend FDI in the Business-to-Consumer segment.

This is based on the already witnessed hundred percent growth every year in the sector in the past few years. Considering the convenience, variety and low prices, it’s no wonder that it has clicked with the price-conscious Indian market.

There is no question that ecommerce needs to spread its wings for further growth. It cannot sustain just on the Business-to-Business (B2B) marketplace model of operations. It needs to allow inventory led B2C model of operations so that there is balanced growth in the sector.

Challenges remain

Increase in internet and smartphone penetration has no doubt led to even more explosive growth of ecommerce. With anytime anywhere access, consumers can browse and purchase their options even when they are on the go.

However, this is not to say challenges have been eliminated:

• There is no clear policy or regulatory framework about ecommerce and its operations.

• Ecommerce, especially online retail, clicked to such an extent due to cash-on-delivery and its acceptance by customers.

• Pricing needs to be stabilized and cut-throat discounts need to be done away with.

How can ecommerce help the country?

• Many Indian brands can be developed, including promoting the Make in India concept.

• Artisans and tradesmen from even the remotest areas can expand their business due to the absence of geographical boundaries with respect to customer base.

• It can be one of the largest sources of FDI in the country, thus adding to the growth of the economy.