Good news for online sellers. According to a joint study conducted by Associated Chamber of Commerce and Industry of India (ASSOCHAM) and Deloitte, the digital commerce industry in India is poised to hit $128 billion by 2017. In an ambitious estimate, the study attributes the potential growth to increased mobile penetration, m-commerce, online payments, and good discounts.
Steady growth over the years supports finds
The ecommerce industry in India has grown at a confident pace over the years. In 2010, it stood at $4.4 billion, and rose to $13.6 billion by 2014. The study, titled, ‘Future of e-Commerce: Uncovering Innovation’, raises a valid concern. With profits still a distant dream, will the predictions made by the study materialise? The study notes that international names like Amazon and Alibaba have their mother companies to fall back on for their resources, but indigenous and upcoming players will find it difficult to sustain their growth without a strong financial backing.
What are the problems?
D S Rawat, Secretary General of ASSOCHAM said, “The supply chain and logistics in e-commerce business are highly complex to manage in a vast country like India where infrastructure is not well-developed to reach every remote and rural area. The taxation policies for the e-businesses are not well-defined depending on different business models and transaction types. The complexity has further amplified with transactions happening across borders for online selling of goods and services. Moreover, e-businesses do not take sufficient steps to deploy a security solution, which is hindering the consumer from transacting online.”
Most companies are focusing their energies on mobile. Top players are of the opinion that mobile commerce could contribute 70% of their total revenue. The number of Indian online shoppers is set to go up to 40 million by 2016.
The number of Indians to get on the internet is set to hit 200 million in the next three years, with a majority of this number coming from mobile. Support from the government will come in the form of its Digital India initiative.
Ecommerce companies have to focus on the financial, infrastructural and logistic related issues. They also have to work on retaining customers and building a solid customer base. Careful thought and planning will help online sellers take advantage of the growing sector.