The goal of the demonetization move in India is to make the economy stronger and eliminate the parallel cash economy which is unaccounted and untaxed. While this can impact the GDP negatively in the short term, it should have positive long term consequences. For e-commerce companies, which already have a digital payments system in place, it should lead to higher online payment and eventually eliminate the painful cash on delivery option. However, in the short term, witness a decline in GMV from India as the economy adjusts to the “new normal”.

1. PART 2

2. The goal of the demonetization move in India is to make the
economy stronger and eliminate the parallel cash economy
which is unaccounted and untaxed. While this can impact the
GDP negatively in the short term, it should have positive long
term consequences. For e-commerce companies, which already
have a digital payments system in place, it should lead to higher
online payment and eventually eliminate the painful cash on
delivery option. However, in the short term, witness a decline in
GMV from India as the economy adjusts to the “new normal”.
PART 2

3. PART 2
Reduction in Cash on Delivery:
COD is considered as a necessary evil in the Indian e-commerce
market. While it boosts sales of online companies, it obstructs their
cash flows and makes it difficult to scale operations. There are
several additional costs involved with this payment method and the
risk of returns and thefts with this form of payment are higher. The
recent government push towards a cashless economy will encourage
more online payments and reduce the total share of COD in e-
commerce sales from the current high of nearly 80% of total
transactions. This should help e-commerce companies to reduce
overhead costs and other risks associated with the COD model.
However, in a region where a small section of the population owns
credit or debit cards (12% according to a 2014 report), a shift
towards a digital payments will be difficult and can impact revenues
significantly in the short term.

4. The present situation in India is the accurate flat form for the
development of e-commerce or online business. Demonetization
leads to people make use of net banking for their day to day life.
This is the good opportunity for the e-commerce companies to
make themselves more loyal to customers whether the
transaction is small or big. Creation of trust in customer is very
difficult in today’s business, once he get satisfied with the goods
and services provided by the company starting from the order
booking to safe and accurate delivery customer will get or
become loyal to that. In one way the government is also
encourage the public to use net banking by way of doing the
online transactions more in day to day life. Telecom sector is now
has to concentrate the rural area more to get use of online sale or
purchases, simultaneously the banking systems to provide the net
banking facilities to rural people to get touch with the latest
technology of online banking or marketing.
PART 2

5. Globally the number of internet users is expected to touch
4170 million by 2020. The Growth of the ecosystem has
successfully created an ecosystem for new businesses to tap
into growing markets and create solutions to address their
demands.
The start-up ecosystem in India, coupled with the
government’s initiatives make the Internet accessible to every
citizen across the country, is helping India set the stage to
enable large numbers of ‘netizens’ to reap the benefits of the
Internet. With the rise of digital natives and the increased
adoption of smartphones, Internet penetration in India will
stretch beyond the large cities, as more services and devices
come online. This is also a great opportunity for enterprises
to harness the power of the Internet to innovate and scale
operations.
PART 2

6. Online shopping will account for two-thirds
of the total e-Commerce market, edging
out travel
According to the report, the overall e-Commerce market in India
was valued $17 billion in FY 2016, and by 2020, India will have an
estimated 702 million smart phones in use and mobile phones will
emerge as the preferred device for shopping, accounting for 70%
of total online shopping. The fashion and lifestyle segment will
emerge as the largest e-tailing category with a 35% contribution to
e-Commerce GMV by 2020, overtaking the consumer electronics
segment which dominates the sales of Indian e-Commerce industry
at present.
PART 2

7. 50% of travel transactions to be online by
2020
Travel across India, for social visits, leisure, shopping and holidays
is all set to increase and more people will be booking online,
taking advantage of competitive pricing offered by online travel
agents (OTAs) and aggregators. An increasing amount of user-
generated content online (views on social media, reviews on
websites, etc.) is driving aspirational travel, tipping the scales in
favor of trips that were once only contemplated, never
undertaken.
PART 2

8. Media and OTT –– All moving online,
one app at a time
The availability of affordable smartphones and tablets has
encouraged the second screen phenomenon. With the rapid
adoption of smartphones and next generation networks,
content consumption patterns and consumer engagement
channels are rapidly evolving. Even in its nascent phase, the
video-on-demand (VOD) market is highly competitive in India.
PART 2

9. Financial technology –– Disrupting the way
India pays online
Fintech is disrupting financial services and is likely to have far more
widespread impact on society and the Indian economy, both directly
and indirectly. The fintech software market within this was pegged at
$1.2 billion (13-15%). The remaining 87% focus on services, primarily
in payments (60% of the market, including ATM/Point of Sale (PoS)
and core banking services. India’s fintech market is expected to grow
1.7x between 2015 and 2020. While cash-on-delivery may remain the
preferred mode of payment for newer users, keep in mind that use of
mobile banking and e-wallets is surging.
PART 2

10. Email: jyoti.gadia@resurgentindia.com Call Us: +91 124 4754550
www.resurgentindia.com