E-commerce Business in India
India is the second largest E-commerce market after China and it is growing tremendously with ever increasing numbers of online buyers. Businesses are relying heavily for their growth on the online platform. The E-commerce market has created some of the biggest business giants nationally and internationally like Flip kart , Snapdeal, Amazon, Jobong, Myntra and Paytm.
Market length The changing consumer behavior and shopping patterns have given tremendous growth TO Indian E-commerce market. The internet user base has reached 354 million in India as of June 2015. India is expected to generate $100 billion online retail revenue out of which $35 billion will be through fashion E-commerce by 2020. The revolutionary move from government of allowing 100 percent FDI in E-commerce retailing has brought a new transformation in Indian E-commerce market.
Funding There is strong speculation of industry expert that 2016 will be a reality check for Indian ecommerce industry, which is surging ahead on foreign capital funding. Investors (drained OR INVESTED – PLESE CHECK) $9 billion into Indian startups in 2015 that is 50% of the past 5 years’ total deal value. From an investment perspective, the market is a primarily minority stake market, with maximum traction in early-stage deal. Such early stage funding will certainly help companies to develop a strong foundation. Career in E-commerce E-commerce industry is likely to generate 2.5 lakh jobs in online retail in 2016, as the hiring in the sector is expected to grow at 6065 per cent. Big players as well as startups are aggressively hiring. These talents are going to create huge difference in terms of technology and marketing support for E-Commerce players in the coming years. Today, salaries in the e-commerce industry have no benchmark. In top B-school campuses across the country, e-commerce players have overshot top recruiters from other sectors by offering students double the salary.
Challenges High Return Rates: E-Commerce players are experiencing heavy product return rates, which are causing losses for them, as reverse logistics presents unique challenges as the trend is still changing.
Consumer prefer COD (Cash on delivery): Due to trust deficiency, still lots of people don’t prefer to use a credit / debit card or internet banking methods for transaction, rather they opt for “Cash on Delivery” which is risky and has less margin. On the mode of payment, almost 45 per cent of online shoppers reportedly preferred cash on delivery mode of payment over credit cards (16 per cent) and debit cards (21 per cent). Only 10 per cent opted for internet banking and a scanty 7 per cent preferred cash cards, mobile wallets, and other such modes of payment. Payment gateways Inefficiency: Due to the slower internet speed in India, consumers usually experience a high failure rate of payment gateways. Usually a customer does not reattempt after a transaction failure. It leads to loss of businesses. Reliable Logistic and Supply Chain: Though the Metropolitan cities and other major urban centers have no issue with supply chain, but the attraction lies in thousands of other Indian cities and areas which are not easily accessible till date. E-Commerce provides immense ease to consumers in terms of choice of products and payment options but in order to capture new market it has to also ensure delivery of the product to consumers’ place in least possible time. Computer/Internet literacy and reach: The internet is still accessible to half of the internet user population through PCs with the help of telephone lines. Given the penetration of telephone (only 2.1 per cent of the population), e-commerce remains far away from the common man and It is difficult for e-commerce to reach to 1,000 million strong population spread over 37 million households in 6, 04,374 odd villages and 5,000 towns and cities. Besides, cost of PCs and internet access both are quite high in India.
Prospective:In 2016, the e-commerce landscape promises to get bigger and wider, as Reliance and the Tata group plan to launch their own ecommerce platform to take on global players like Amazon, which had pledged a $2 billion (roughly Rs. 13314 corers) war chest to establish a lasting foothold in the Indian e-commerce market. The buying trend during 2016 is expected to witness a significant upward movement due to aggressive online discounts and wider and abundant choice. Mobile commerce (m-commerce) is also one alternative which is growing rapidly as a stable and secure supplement to the e-commerce industry. Flipkart, one of India’s largest retailers is gunning for the app-only strategy which is a risky move that may prove to be successful in the long run. Even Myntra and Urban Ladder have a Mobile App only strategy. Realizing the potential, reach, ease and technology trends the government has taken major steps to offer a one-stop solution for government services through Digital India Projects via Smartphone Apps. These sorts of initiatives will also encourage to the ECommerce market.
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