The digital commerce market in India has been growing steadily and consistently since 2014. Many analysts predict that the value of eCommerce market in India will cross $50 billion by the end of 2018. A few eCommerce companies dominate the Indian eCommerce market. Also, a large percentage of Indian shoppers access eCommerce websites and apps on their mobile devices. Likewise, they prefer cash-on-delivery to other digital payment options provided by various eCommerce websites. Hence, the state of eCommerce in India will be impacted by both emerging trends and changes in customer preference.
Current State of eCommerce in India
Shoppers Access eCommerce Websites on Mobile Devices
A steady increase is being noted in the number of shoppers who prefer web stores to brick-and-mortar stores. But most shoppers in India access eCommerce websites on their smartphones and tablets. With more and more shoppers switching from mobile phones to smartphones and tablets, the e-tailers have to focus extensively on their web store’s mobile user experience. Many online retailers upgrade their eCommerce websites frequently to make it deliver faster shopping experience and richer customer experience across varied mobile devices and platforms. Interested readers can read more on impact of mobile apps on eCommerce industry.
Shoppers still Prefer Cash-on-Delivery to Digital Payments
As highlighted by a number of studies, a large percentage of shoppers prefer cash-on-delivery model to other digital payment options. However, the Indian government has been taking new initiatives to promote cashless and digital payment options. Many online retailers are using secure payment gateways to persuade customers to opt for digital payment options. The number of shoppers using debit/credit card and mobile wallets has been increasing rapidly. Hence, the online retailers have to enable shoppers to choose from cash-on-delivery and digital payment options to prevent shopping cart abandonment.
Large Online Retailers Keep Infusing Fresh Capital
At present, an India shopper has option to choose from several eCommerce websites. But the eCommerce market in India is still dominated by two major players – Amazon and Flipkart. Both Amazon and Flipkart have been infusing fresh capital regularly to gain market share and beat competition. Recently, Amazon founder Jeff Bezos announced his plan to strengthen Amazon Seller Services by infusing fresh capital to the tune of Rs 1950 crores. The fresh investment will help the Indian unit of Amazon to expand its infrastructure and boost customer experience. At the same time, the investment will persuade other e-tailers to infuse additional capital.
Major eCommerce Companies Keep Acquiring Start-ups
In addition to infusing fresh capital, major eCommerce companies has been increasing market share through merger and acquisition. In 2017, Filpkart transformed the eCommerce market in India by acquiring eBay India. Likewise, Snapdeal acquired the online recharge and bill payment service – FreeCharge. Many eCommerce companies opt for merger and acquisition to gain market share in a short amount of time. At the same time, acquisition helps online retailers to beat competition by including more weapons in their arsenals. In 2018, many online retailers may acquire or purchase fin-tech start-ups without revealing terms of acquisition.
Large Retail Chains Have Started Selling Products Online
In India, online retail is yet to surpass physical retail. Many analysts even believe that online retail and physical retail will converge seamlessly over a period of time. But leading retail stores in India have already started selling products online. For instance, Big Bazaar allows customers to purchase a wide range of products through its website without visiting the local outlets. Likewise, Reliance Trends also allows shoppers to purchase dresses and fashion products through its website. With more and more shoppers going online, many retail stores will complement their physical retail model with web stores.
New Etailers are All Set to Transform eCommerce Market
Despite being labelled as a start-up, Reliance Jio has already shaken up the Indian telecom industry by offering free voice calling and low tariffs to customers. Likewise, Patanjali Ayurved Ltd has already captured 7% market share in foods and beverages and 24% market share in personal care within a few years. Reliance Jio has already revealed its plan to enter the crowded eCommerce market in India. Likewise, Patanjali has already announced to sell its products through various eCommerce websites and online platforms. The new entrants have the capability to disrupt the eCommerce market in near future.
Flash and Mega Sales have become Commonplace
Many Indian shoppers prefer web stores to brick-and-mortar stores to avail huge discounts. Most online retailers nowadays organize mega or maha sales at frequent intervals to drive online sales. They even provide additional discounts and attractive offers to persuade shoppers to buy products during the mega sales. Likewise, major etailers like Amazon and Flipkart also organize flash sales regularly to boost sales of new merchandize like cell phones. They even partner with leading manufacturers to make their products available to customers only through the eCommerce websites.
On the whole, the value of eCommerce market in India is expected to cross $50 billion by 2019. But the market share of individual online retailers differs. With more and more shoppers going online, it becomes essential for online retailers to gain market share by making their eCommerce website accessible on mobile devices and deliver richer customer experience across devices. The business owners should follow the mobile app development trends and eCommerce development trends properly. They should plan for their eCommerce application development accordingly.