E-commerce in India

E-commerce (Electronic commerce) has become the most exciting sector in India today. With a growing number of aspiring rural and urban internet-connected customers, there is tremendous scope for online selling. There is a huge one-time customer base in India. The process of e-commerce enables sellers to come closer to customers leading to increased productivity and perfect competition. The customer can also choose between different sellers and buy the most relevant products as per requirements, preferences, and budget. Moreover, customers now have access to virtual stores 24/7. The e-commerce boom in India has not only changed the face of customer businesses but also opened many doors in terms of career and job opportunities. E-commerce in India originated in the late 1990s with the rise of the Internet, but it truly took off in the early 2000s when companies like eBay, Flipkart, and Amazon entered the market. Today, it is a major industry in India, with a rapidly growing number of consumers shopping online for various goods and services. The COVID-19 pandemic has accelerated the growth of e-commerce in India, as more people have turned to online shopping due to lockdowns and social distancing measures.

IMPORTANCE OF E-COMMERCE IN INDIA

E-commerce businesses can personalize everything from onsite searches to dynamic pricing and curated product recommendations. With an AI-powered e-commerce platform, you can upsell, cross-sell, and present products that customers are most likely to be interested in, thereby increasing revenue per customer. E-Commerce technology has tie-up social media networking applications to provide the best source of content-sharing technology and e-marketing systems. You can share content or data easily with just one click.

Information density means the total amount and quality of information available over the internet to all market buyers and sellers. Internet vastly increases information density. Information density offers better quality information to consumers and merchants. E-Commerce technologies increase the accuracy and timeliness of information. For example, the Flipkart.com store has a variety of products with prices. It provides a wider reach and reception across the global market, with minimum investments. It enables sellers to sell global audience and also customers to make a global choice. Geographical boundaries and challenges are eradicated/drastically reduced. 

One of the benefits of having an online store is that industries don’t have to build physical stores at all the locations where they want to sell products/services. A single e-store would serve the purpose. this will keep your business operational cost on the lower side. Customers can spend less time shopping for what they want. They can easily browse through many items at a time and buy what they like. When online, customers can find items that are available in physical stores away from them or not found in their locality.

DISADVANTAGES OF E-COMMERCE IN INDIA

E-commerce businesses do not ensure a guarantee or warranty of online products. Therefore, some customers may receive faulty products and yet cannot claim for warranty or guarantee of the product, and hence may feel cheated by the company. 

One of the most significant disadvantages of using E-commerce is the compromised privacy and security of your data. Consumers have to provide their personal data such as an address, name, phone number, credit card details, etc. The most common cybersecurity threats to your credential are data theft, phishing malware attacks, hacking, and misuse. To make matters worse, the E-commerce industry is the most vulnerable as it experiences 32.4% of cyber-attacks in various forms. India’s internet infrastructure is still developing, and the speed and connectivity can be inconsistent in some areas. This can cause issues when customers are trying to browse and purchase products online. 

Logistics is the main challenge for e-commerce companies in India. There is a lack of proper infrastructure including adequate transportation and warehousing facilities, which can lead to delays in deliveries and a poor customer experience. It is to merge electronic business with a traditional business. Technological infrastructure may be expensive and huge cost has to be incurred to keep pace with ever-changing technology. It is necessary to allocate more funds for technological advancement to remain competitive in the electronic world. 

Even now, a huge portion of India’s population enjoys going to an offline store and talking to staff while shopping. They used to consider shopping as an experience and make a whole day of it while e-commerce allows for a simple and easy browsing experience, it also does not allow customers to have complete assurance on the brand/product. They do not get a chance to speak with a brand representative while shopping. However, with the help of AI, online shopping is on its way to becoming more fun, interactive experience that Indians would crave on the weekends with family.

MARKET GROWTH OF E-COMMERCE IN INDIA

E-commerce is witnessing a global resurgence, and E-commerce in India is booming based, in part, on increased access to the Internet in India and other emerging economies. In the e-commerce market, the number of users is expected to amount to 1,090 million users by 2027. User penetration will be 57.6% in 2023 and is expected to hit 73.7% by 2023. The average revenue per user (ARPU) is expected to amount to US$ 86.61. 

The growing internet user base in India due to affordable data prices offered by telecom companies represents one of the key factors driving the market. Moreover, there is a rise in the advancement of technologies, such as digital payments, hyper-local logistics, analytics-driven customer engagement, and digital advertisements across the country. This, along with the rapid digitalization in the country, is propelling the growth of the market. In addition, several initiatives undertaken by the Government of India, such as Digital India, skill India, startup India and Make in India are contributing to the growth of the market. 

Besides this, the introduction of the Paytm payment bank in India with Zero charges on online transactions, no minimum balance requirement, and free virtual debit card positively influence the market. Players are extensively investing in research and development (R&D) activities to introduce offline real stores for promoting private labels in fashion and electronics, which is bolstering the growth of the market in the country. 

The scope of e-commerce also encompasses a variety of business models, such as online marketplaces, dropshipping, subscription services, and direct-to-consumer brands. Additionally, e-commerce businesses can operate at local, national, or international levels, reaching customers around the world. The growth of e-commerce in India has been exponential in recent years, and this trend is expected to continue in the future. 

As e-commerce companies collect more data on their customers and transactions, they will need experts to analyze and interpret that data. This will create jobs in areas such as data analysis, business intelligence, and data science. As e-commerce in India continues to grow, there is an increasing need for technology solutions that can help retailers manage their operations and offer a seamless shopping experience to consumers. Businesses that offer retail technology solutions could find significant export opportunities in the Indian market. As Indian e-commerce companies expand their operation globally, there is a growing demand for cross-border e-commerce solutions. This presents opportunities for businesses offering logistics, payment, and technology solutions that can facilitate cross-border trade. The report has taken a host of steps to onboard products of self-help groups(SHGs), tribal communities, artisans, weavers, and MSMEs. Initiatives taken by the Government for the promotion of e-commerce, including the Digital India program, Unified payment interface (UPI), GEM, etc., have been major contributory factors to the growth of E-commerce in recent years,

CONCLUSION

The future of e-commerce in India holds immersing significance for the country’s economy as businesses adopt new technologies and omnichannel strategies. The e-commerce business in India will become even more competitive and diverse. Therefore, the future of e-commerce in India is full of opportunities, and businesses must be prepared to embrace them to succeed in this ever-evolving market. The E-commerce segment will be imperative in pumping up the Indian economy and boosting the employment rate.