Indian e-Commerce Industry: The Way Forward
An online portal for Indian eyewear, the New Delhi based Lenskart was founded in 2010.
Indian e-Commerce is a case study in product and marketing success. 2014 was the watershed year for the industry when people stopped questioning its survival, scale and ability to become a mainstream retail channel. In 2015, the industry is expected to grow at a whopping 37 percent and is estimated to hit $20 billion. These figures lay bare the immense potential that the segment holds in the country.
It may be too early for e-tailers in India to think of large-scale global ambitions and also, perhaps unwise at a stage where much opportunity remains to be tapped within India itself. In fact, several giant global companies are convinced that the next big fertile investing ground is Indian e-Commerce. From exploring newer geographies and innovative digital platforms to elevating shopping experiences to unprecedented levels, the Indian e-Commerce industry has exciting times ahead of it.
A recent case study published by an online retail entity shows that contrary to popular perception, Indian e-retail is now being driven by tier II and III cities as opposed to metropolises. Over 1,200 rural hubs have shown great propensity to transact online and that too for significant value. Several experts have previously highlighted that online retail is gaining traction in every nook and cranny of the country thanks to internet connectivity through mobile phones. There is a large user base in rural and semi-rural areas that may not have access to PCs and desktops but do have internet on their phones. This mix of newer demographics and the emergence of mobile commerce as the hotbed of transactions will prove to be a big game changer this year.
Smartphones have already caused a paradigm change in the way India shops virtually. In the coming months, however, mobile will emerge as the most potent and indispensable medium for brands to reach out to their target markets and create the desire to buy. Eye-popping discounts on mobile apps are the most obvious demonstration ofhowtop online retail players are gunning for user attention through this platform. Every marketer is targetting maximum downloads and transactions via mobile apps. Besides being able to foster a 24X7 connection with consumers, mobile apps also enlist greater brand loyalty thanks to a more personalised and contextual user experience.
This brings us to the next most vital driver for the industry in the forthcoming days: Superlative customer experience. This one aspect will be the key differentiator and will sift the leaders from the trailers. Superior experiences will have to be delivered right from the onset of the shopping process up to the final delivery of the product.
With fashion and lifestyle emerging as the second biggest category, only 2 percent behind electronics, "virtual trying" will become extremely important. Some best-of-breed e-tailers are already offering the option of uploading one's photograph and getting a rough idea of how a product will look when actually worn. However, the ultimate delivery leaves much to be desired. There is still a lot of scope in terms of innovation and accuracy. Technology teams will need to focus on offering a more realistic picture during the process of virtual trying so that customer expectations are met with when he/she finally receives the item.
There is also a need to address the biggest customer grievance in e-Commerce: Delivery timelines. While many e-tailers have managed to please customers with next-day deliveries and prompt returns etc, there is still a very wide gap in the efficiency that a customer expects and what companies are able to offer in the present. The logistics sector is simply unable to keep pace with the rapid growth of e-Commerce in India which was very visible in the delayed deliveries during Diwali. Start-ups are emerging in this realm too and are bringing in innovation to please customers of their client e-tailers. For instance, many start-up logistics firms are training their staff according to the value proposition and customer profile of the brand they are delivering for. They are also being taught how to politely pacify disgruntled customers. However, initiatives in the logistics and reverse logistics space will have to go beyond just soft skills and will have to focus tremendously on building capacity.
To conclude, year 2015 is likely to be a very exhilarating one for Indian online businesses. 2014 stabilized things for the sector and made e-Commerce integral to how Indians shop and transact. This year will be all about setting new benchmarks, revamping technologies, innovating on ways of getting new customers on board and augmenting the final delivery to customers.