The Futures Bright For Ecommerce In India

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E-commerce in India has a long road to travel before it can become truly competitive and challenge the might of the brick and mortar economy

. The low penetration of internet in India (9 percent) is the biggest hurdle that ecommerce faces. India lags far behind other competing like China and Brazil which have about 30-40 percent internet penetration.

Even with these figures, Indias estimated 100 million Internet users still comprise the third largest online population. A recent report by the Internet and Mobile Association of India reveals that Indias e-commerce market is growing at an average rate of 70 percent annually, and has grown by over 500 percent in the past three years.

The Indian e-commerce market is predicted to grow to over Rs 46,000 crore in 2011. This growth has primarily come from the online travel industry which makes up of the total industry. Airline tickets and railway tickets form the bulk of this segment.

The financial services market has also benefitted from the growth of ecommerce in India. Online insurance payments and transactions through trading accounts, is predicted to reach an estimated Rs 2,650 crore.

E-tailing, which includes purchases of durable products like electronic items, home and kitchen appliances, as well as personal items like apparels and jewellery, constitutes 8 per cent of the overall e-commerce market in the country. A lot of attention has been focused on this sector as it has shown explosive growth and various companies have adopted various models of delivery and inventory. Most of the start- ups in this sector have secured funding from reputed international funds and ready for the long haul. In 2011, Rediff.com listed Dealsandyou, Bestylish, Flipkart and Infibeam among the 20 most exciting e-commerce startups in India.

The challenges that face the e-commerce industry are daunting but they have come up with some truly Indian answers to these. The use of credit cards is very low in India and this fact is a big stumbling block for e-tailers. However they have now tied up with card issuers and offer deals and discounts online to users of particular credit cards. Another method used to overcome the apprehension over online payment is to use services like net banking or cash on delivery.

A hassle free user experience is the primary driver of e-commerce. Customers prefer an e-commerce brand because of the convenience of shopping online, however the reliability of e-commerce businesses will have to outweigh the benefits of traditional retail outlets for people to truly make the switch.

One benefit that Indian e commerce companies have is that the growth of ecommerce in markets like US, Europe and China has ensured that now global best practices, that have driven e-commerce globally, are now a key focus area for Indian e commerce companies. Merchandising, customer service, user interface design, and guaranteed delivery and return policy are all factors that determine whether a user will return. The online Indian consumer is now faced with the happy choice of a wide variety of online retailers each offering a quality product for their consideration.

by: Sanober Kabeer

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