In this article i am discussing about the near future of Indian E-commerce industry and the certain changes that are on the cards.#Internet #onlinemarketing #digitalmarketing #onlineadvertising #socialmedia #clickandbrick #onlineretail #flipkart #google #paidadvertising

1. HCL
Tech
nolog
ies Key
Growth drivers for
the future E-Commerce
Industry
The change of Paradigm and its Future
Kanti nath banerjee
Digital analyst
HCL Technologies

2. Abstract
W
hen was the last time you brought a Movie ticket standing long in a queue? When is
the last time you booked your travel tickets over the counter? When is the last time
you paid your bills offline? These are few questions we need to ask ourselves just to
feel the importance of E Commerce in our today’s lifestyle. You can’t deny the fact that it is
slowly but steadily entering into every aspect of our daily transactions. Although Indian ecommerce industry is still in embryonic stage, it grew at a stunning 88% in 2013 to $16
billion, riding on thriving online retail trends and defying loose economic growth and
spiraling inflation, (Courtesy-Assocham). The survey also estimates the country's e-commerce
market to touch $56 billion by 2023, driven by mounting E-retail. While The Online Travel
Industry and its support ecosystem is changing very fast
and booming exponentially
due to the Internet-savvy
urban population, the rest of
the segments like-Tailing
(online
retail),
online
classifieds
and
Digital
Downloads are still in a
nascent stage and holds
immense potential for future
market growth. India is at the
eve
of
a
digital
transformation with new
young, smart group of
‘netizens’ and substantially high investments in the e-commerce sector.
A significant 63% of e-commerce ventures have been started by budding entrepreneurs, which
shows the promises it holds. If we dig deep inside there are few key drivers which holds the
future success of this industry. Let’s talk about few of them-
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3. Rise of Internet usage
T
he recent IAMAI (Internet and
mobile association of India) data
states India has Internet User
population of 190 million as of June
2013 with a yearly growth of 28%.India
now has the 3rd largest Internet
population with 190 million in the
world after China at 568 million and
USA at 254 million (in 2013).The
number of internet users in India is
expected to rise 18.53% in the coming
months to 243 million by June 2014.
Considering the annual rate of growth
41-43% India is expected to cross 375
million unique internet users by end of 2015.
Venture capitalists and private equity players
N
umerous VCs are investing in the e-Commerce space sensing its future growth. The
sector would continue to receive funding from VC and PE players despite concerns
relating to a valuation bubble. Though in Early stage, focused PE players would invest a
major part of their funds (40%) in internet-based companies by 2014–15.Dont forget we are also
waiting for FDI green signals too. If the door opens in near future there will be a good amount of
capital investment from Global giants.
Online retail segment
R
etail has grown 43% and reaches
60% penetration among online
users, but is still below world
averages. This shows the immense
potential that the retail category holds in
India with online retail filling the
distribution and convenience gap. Cashon-delivery has been one of the key
growth drivers and contributes for 50%
to 80% of online retail sales.
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4. M-Commerce
I
t is pretty possible for m-Commerce to become even bigger than e-Commerce in future days
especially in a country where there are over 930 Mn mobile subscribers against 160 Mn
Internet users (Including 86 Mn mobile Internet users). Top reasons behind this includesAvailability of Cheap smart phones and tablets, Mobile Internet connectivity; introduction of
3G/4G with relatively cheap tariffs, Mobile Payments, Personalization; More secured payment
gateways like SSL(Secured socket layer) etc.
Online advertisement
T
he online advertisement market in India has showcased a
CAGR growth of 32.7% from FY’2007-FY’2012 with the
highest growth of 40.3% in FY’2011 on account of display
and search advertisements. All the digital platforms are getting
flooded with SEM campaigns, Contests, Promos etc. The future
growth of E-commerce strongly depends on this new kind of
interactive, targeted and more measurable form of advertising. The
concept of Mobile marketing and in-app advertisements are also
on their way.
Social media
S
T
oday’s Big players in Indian E-
commerce industry is strategically
diversifying their business into
related verticals and coming up
with more product and service
lines to cope up with the stiff
competition. Some of the
common examples are like
Software’s selling, Matrimonial
services, Health and beauty
products, Home appliances, Gifts,
Stock exchange, Career related
services etc.
ocial media is gaining Dominance in our society and taking
center stage in defining how businesses are engaging with
potential customers. The terms like Content marketing,
Affiliate marketing, social discount/coupons etc are becoming
popular with every coming day. The emergence of blogs as an
avenue for information dissemination and two-way communication
for online retailers and E Commerce vendors is also a sign of its
importance. Social commerce will surely contribute heavily to E-commerce success in coming
days with India positioning itself as one of the fastest growing Social networked user base.
Innovative e-commerce models
G
roup buying and second-hand sales have led to more and more consumers switch to
online shopping. With the rising middle class disposable incomes, global exposure and
shifting demographics (Close to half of the population is less than 25 years of age), this
pattern also holds true for the Tier II & III cities. Market leaders have already adopted new
business models like Try and buy, stock-and-sell, consignment and group buying. E Commerce
also puts the power of when and how you will buy products and services into the hands of the
buyer.
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5. Logistics
L
ogistics will play a major role in overall growth of e-commerce. It also accounts for
customer satisfaction and Brand loyality.The current market players has already solved
the initial distribution and delivery hiccups with modern concepts like Localization,
Product availability check, Delivery tracking through SMS and mails, more sophisticated currier
services and 24*7 customer care etc. Considering the fact that Indian logistics and supply chain
market is not yet well organized & almost 40% of E-Commerce companies have their own
branded delivery network which will be more efficient in coming days.
Conclusion
he gist of online shopping is set to see greater heights in coming years, not just because of India’s
increasing internet consumer community, but also due to recent alterations in the supporting
ecosystem. On the other side we should also keep this in mind that although these drivers
T
may shore up the growth of e-commerce in India in future days, the fledgling industry is faced
with significant hurdles. Pitiable last mile connectivity due to missing links in supply chain
system is limiting the access to far flung areas where a significant portion of the population
resides. Elevated rates of dropout 25-30 percent on payment gateways is the other matter of
concern, Trust and feel factor and slow adoption of online payments are forcing e-commerce
companies to rely on costlier payment methods such as Cash on Delivery (COD) too .In recent
days sit back for some more integrated approach where you may see more integration of social
media like Levis showing which social friends of yours ordered the same trouser you are
checking out. Few structural changes like a steady shift from mere websites to mobile apps for a
particular product or service the provider offering with a more personalized approach is totally
on the cards where as dissolution between physical commerce and electronic commerce is also
on its way. So the only question we need to ask ourselves is that are we; the Indians ready for
Something like Twitter shopping or Virtual merchandising(3d) in coming years or would we lag
behind? The change is looking Obvious.
References
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http://cci.gov.in/images/media/ResearchReports/AnkitaIntComp080811.pdf
http://www.iamwire.com/2013/02/can-online-be-bigger-than-offline-a-power-panel/
http://www.ecommerce.etcetra.co.in/2011/06/29/logistics-and-its-challenges-in-indian-ecommerce/
www.marketresearch.com
Times of India reports.
Trends in Indian E-commerce market-By forester.
E-commerce in India (Evolution, Growth and Challenges) By MSL groups.
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