E-Commerce in India: The Current Scenario

Electronically transferring products and services or e-commerce as we know it is big business. As per a study by Google and AT Kearney, e-commerce will drive 25% of organized retail and will be of GMV $60 billion by 2020.

Consumers’ Choice in E-Commerce

Consumers turn to the comfort of desktop or palm top shopping thus fuelling the growth of e-commerce set-ups. From books to fashion to food, everything is available on site for consumers to order and that too at competitive rates. However, there are a couple of sectors that are considerably popular amongst consumers. One such sector is literally going places – online travel. This is followed closely by mobiles, electronics and apparels as portrayed in IMRB estimates:

1. According to IAMAI and IMRB estimates domestic air ticket and railways booking is expected to grow around 40% to reach Rs 1,22,815 crore by end of 2016.
2. A close second is the fascination for mobiles. Mobile phone and mobile accessories have shown 57% growth in e-tailing.
3. Computers, consumer electronics, apparel and accessories contribute to 49% of overall spends.

Top 5 E-Commerce Companies in India

1. Flipkart

Conceptualized in 2007 by Sachin and Binny Bansal, Flipkart enjoys the status of being the leading e-commerce company in the Indian market. The company made a humble beginning as an online books store and later added electronic items and apparels to its portfolio.

2. Fashion and You

Brainchild of Harish Bahal, started in 2009, this company is the one-stop for designer’s collections and has since become a name to reckon with in the fashion and apparel industry with leading merchandise associations.

3. Snapdeal

Started by IIT alumnus in 2010, Snapdeal was initially a discount coupon website but later changed its course to include mobile, apparels, books etc.

4. Myntra

Established in 2007 by IIT graduates, Myntra is in the niche segment of apparels sharing tie-ups with several brands of repute.

5. Deals and You

As the name suggests, dealsandyou engages customers with discounts in products and services ranging from beauty and personal care to chocolates and fitness.

Top 4 Challenges faced by e-commerce companies

It’s not all rose-tinted in the e-commerce front. There are start-up executives and investors who say that the number of internet savvy users who opt for transacting on internet or online shopping hasn’t increased at a rate complementing the growth of internet users. “It seems like investors and analysts have overestimated the growth of e-commerce,” says Rutvik Doshi, director, Inventus (India) Advisors, a venture capital firm.

1. Last mile delivery – The local delivery networks are not strengthened with vast geographical terrain and infrastructure adding to the woes of last mile delivery for e-commerce companies. This puts strain on logistics and supply chain solutions.
2. Cash on delivery – Manual cash management is expensive and arduous task. Although mobile and digital payments are getting popular but cash transactions are also preferred by consumers. At times, the e-commerce companies have to restock inventory much before receiving cash from previous sale. Sometimes the company has to pay higher return rate for reverse logistics.
3. Online payments – Credible online payments and lack of trust in online payment by some consumers is an uphill task faced by e-commerce companies. Fraudulent payments and tracking orders poses a huge challenge for companies.
4. Customer acquisition – With clutter in the e-commerce segment, customer loyalty has declined considerably whereas unreasonable discounts and marketing spends has increased. E-commerce is a competitive area where even meeting operational expenditure may get compromised.

Conclusion

Gearing up for these challenges require the support of a strong logistics framework. Smart logistics solution is the need of the day so that B2B and B2C requirements are fulfilled. For instance, Gati has retained and maintained its leadership position by adapting to the changing markets and offering innovative solutions. Gati E-connect, Gati’s e-commerce logistics solutions vertical, boasts of a wide reach spanning over 99% of districts in India and above 5120 pin codes along with penetration to 15,400 remote pin codes thus reaching out to consumers located in even the remote areas of the country for rising up to the last mile delivery challenge. This, in turn, has helped in timely and regular deliveries adding up to customer satisfaction and loyalty.

Thus, with a strong logistics network, e-commerce in India can reach stellar heights even in competitive scenario.