Major Challenges Ahead For Ecommerce in India

Editor | Mar 22, 2021

Major Challenges Ahead For Ecommerce in India

Without a doubt, India has been a profitable ecommerce region in the last 7 years. Thus many venture capitalists, angel investors, private companies and high net-worth individuals are pouring money in ecommerce, no matter how small or big the company. Only condition being the start-up needs to have potential to lure in the target market.

That’s the glorious side of the ecommerce industry – the stupendous growth and over-flowing money, open market for entrepreneurs and such highlights. But there are challenges ahead waiting to crawl out. Challenges that will test sustainability of this growth.

Logistics, the big one

With a population of more than 1.28 billion, Indian is a goldmine waiting to be explored. But logistics has been and still is a major issue because of which ecommerce companies haven’t been able to reach all pockets.

Experts believe that in the next decade organized retail will grow from 0.1% to 5.3%. Tier 1 cities are nearly exhausted. The next decade would belong to infiltrating Tier 2 & 3 cities and reaching out further down. This would require strengthening the logistics & delivery arm, which would also include building ample warehouses, good tracking systems and hiring trained & trustworthy workers.

Reasonable investments

The future demands market leaders in ecommerce to raise funds in order to sustain the growth. An ETRetail news report stated ‘Indian online retailers such as Flipkart and Snapdeal must collectively raise $20 billion (Rs 1.27 lakh crore) in the next five years to be able to sustain growth, investment bank Goldman Sachs has estimated.’ Is this why Flipkart is looking to raise debt for the first time with Rs 3,000-crore rupee bonds and Snapdeal revived talks with Alibaba?

Building customer loyalty

As far as top etailers are concerned, none of them are competing on any product/service differentiating factor. All are fighting on discounts. This won’t help in building customer loyalty as buyers would go where the discounts take them. And delivery blunders and moves such as going ‘app-only’ don’t help either. So maybe it’s time to work on building a distinct identity if etailers wish to survive well.

Reformed policies

The threat of restrictive FDI policy is hanging as the government contemplates whether or not to allow foreign investments in the e-commerce sector. And it will take at least a couple of months to get a clearer picture. Tax and regulation issues crop up too every now and then. If favourable ecommerce policies with regards to FDI don’t become a reality, then it is going to be a huge challange



About Author

Editor

Editor

Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business. 




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