The Dizziness of Indian E-commerce Industry

I have been an avid online shopper since over seven years ago – and I think I started late. But then, of course, the choice of what you could buy and from where you could buy were also limited. However, last week was remarkable for me, in that, I received deliveries of orders made online of distinctly different products from different e-marketplace providers on the same day (in fact, within a few hours). I was promptly delivered a mobile phone, kitchenware items, home furnishings, medicines, and my dinner all within a span of about 4 hours.

This got me thinking. Ten years ago, I didn’t really understand what e-commerce was. Today, I think it’s the best thing that could have happened to any Indian who owns a smartphone and 4G connection (about 250 million Indians). So, what has changed?

The obvious factors come to the mind…continuous lowering of mobile tariffs, penetration of smartphones in the country, mushrooming of service providers, online transaction security, magnificent discounts to name a few. No longer is it really unsafe to punch in your credit or debit card number on a website and be taken for a ride, what you pay for is what you get and if you don’t like it you can return it (without, of course using it). There’s a peace of mind that comes along with these benefits.

Marketers have done an excellent job of using every occasion in the book to give hefty discounts to online shoppers. No longer is it restricted to just Holi, Diwali, Valentine’s and other majors….now there is a payday sale, mother’s day sale, no reason sale and so on. The total e-commerce retail sale in India is somewhere between US$ 80-100 billion (conservative figures). Between 2013 and 2017, Indian e-commerce market grew by a whopping 53% against China (33%), Indonesia (31%), Malaysia (30%) and South Korea (12%).

While electronics and accessories have shown the most promising rise, apparel and cosmetics aren’t far behind. Surprisingly, some verticals have shown a promising entry – cab hailing, food delivery and household goods in general. Fortunately, since 2014, the Government has announced various initiatives namely, Digital India, Make in India, Start-up India, Skill India, and Innovation Fund. The timely and effective implementation of such programs is bound to support the e-commerce growth in the country. 100% FDI is possible now in B2B models and as I understand a draft e-commerce policy is being worked upon.

From a seller standpoint, all this is great news. Not only domestically produced products but even global products can now be purchased by a few clicks. This service is right now limited to a few e-commerce players only but I’m certain this will expand. International sellers, particularly the small ones, who don’t have the wherewithal to formally enter the Indian market and set up shop and distribution chain may still find customers in India through these e-marketplaces. Sure – the volumes could be lower and there may be the odd return but a lot better and cheaper than to set up a company in India and invest in distribution, marketing, advertising et al

So, that day is not far in distant future when you could be sitting on your lounge chair that arrived from Italy, sipping on your Japanese tea, reading the book that you ordered from Australia under a lamp that was made in Vietnam.



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