E-Commerce is one of the most exciting spaces for today’s global online users, and India’s fresh startup economy is along for the ride. In just one year, Indian government have already invested over 50 million dollars in several e-commerce companies and e-marketplaces which helped Indian economy to rise up.
However, e-commerce in India has a long road ahead, and e-commerce infrastructure and best practices are just expanding since 2008. India’s Internet penetration lags far behind China and Brazil one, nonetheless India’s estimated 150 million Internet users still comprise the third largest online population.
Within these big challenges lie great opportunities, and the maturation of India’s e-commerce ecosystem is no different. A recent internet report reveals that India’a e-commerce market is growing at an average rate of 80 % annually, and has grown fastly in the past three years. Here are four reasons that e-commerce is set to boom in India, after years of false start
1. Enormous increase of Internet users: with more than 150 million Internet users, the country is beginning to achieve a critical mass of users who are familiar with web services. It is important to say that over the past few years, relatively sophisticated online travel agents (which started turning these initial web users into consumers) have dominated Indian e-commerce: one of the most popular is for example Make My Trip. Although industry giants such as eBay, Alibaba, Amazon are the kings of the conversion of online users into consumers, statistics affirm that India would estimate 70 % of growth in the e-commerce field in 2016.
2. Rising middle class with good starting income: throughout India’s short history, the country has been a land of haves and have-nots (we must not forget that the majority of Indians are poor and starving people). However, with the rise of small and medium enterprises, foreign direct investment, and India’s own powerful multinational corporations creating a lot of new jobs, a new generation of clever and smart Indian consumers has been created: these consumers are spread across the country but in particular are concentrated in Mumbai and Dehli. This growing middle class is increasingly turning to e-commerce as the primary outlet for sophisticated consumer products and services: this is one of the most important solutions to export and make business inside and outside the nation.
3. Fast payments and logistics: one of the largest challenges to e-commerce in India is the lack of infrastructure to support new businesses. Like in China, logistics companies have been notoriously unreliable and complex regulations mean that logistics and paperwork are more like international customs. A big problem is that Indians have an aversion to credit cards because few people own Visas or mastercards. However, the new breed of domestic logistics companies recognize the importance of reliable delivery and technology investment, and a number of new payment gateway companies have sprung up to service the growing e-commerce ecosystem. Alternative payment methods such as netbanking and cash on delivery are becoming a Must for leading e-commerce platforms and can drive as much as big percentages of transactions, and qualified technical integrations make the experience seamless.
4. User experience: Indians consider the the user experience as the primary driver for e-commerce. In general customers prefer a reliable relationship with an e-commerce and convenience. Because there have been a relatively small number of successful consumer Internet companies in India, there has been less competitive pressure to force implementation of global best practices. However, as the number of e-commerce companies has grown, companies have started to place more emphasis on investing in the user experience. Best practices that have driven e-commerce globally are now a key focus of successful Internet companies, including merchandising, customer service, user interface design, and guaranteed delivery and return policy.
In this competitive sector thanks to a good user experience, an increasing number of users, efficient logistics and cost-effective solutions the ultimate winner is the Indian online e-commerce.