E-Commerce is future in India

Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics has provided the e-commerce sector in India the unique opportunity to fundamentally alter the way companies connect with their customers. Due to this digital revolution, the e-commerce sector in India has become 4 times its size, from $3.8 billion in 2009 to $17 billion in 2014, growing at a CAGR of 37%. The sector is expected to cross the $100 billion mark within the next five years, contributing over 4% to India’s GDP.

The Government’s ambitious ‘Digital India’ project that aims to offer a one-stop shop for Government services will further bolster the sector by introducing internet and broadband to remote corners of the country and increase trade. This initiative through a targeted investment of nearly $17 billion will transform India into a connected economy and also attract investment in electronics manufacturing and create millions of jobs.

Over the last decade, the Internet has changed the way people buy and sell goods and services. Online retail or e-commerce is transforming the shopping experience of customers. The sector has seen unprecedented growth especially in the last two years. The adoption of technology is enabling the e-commerce sector to be more reachable and efficient. Devices like smartphones, tablets and technologies like 3G, 4G, Wi-Fi and high speed broadband is helping to increase the number of online customers. Banks and other players in e-commerce ecosystem are providing a secured online platform to pay effortlessly via payments gateways.

Business Models in E-commerce market in India has started to become crowded and complex with several players fighting for a fair share of customers’ mind and wallet. As the competition in the e-commerce heats up, the companies are using multiple business models in order to get customer attention including:

• Inventory model e.g. Shopper Stop, Croma
• Social networks e.g. Trip Advisor
• Aggregator Model e.g. Ola Cabs
• E-Marketplace e.g. Flipkart, Snapdeal
• Transaction broker e.g. IRCTC
• Click and Collect service e.g. Amazon

To survive and sustain operations in the competitive market, companies are also taking advantage of one or multiple revenue models including:

• Advertising revenue model e,g. Yahoo.com
• Subscription revenue model e.g. Flintobox
• Transaction fee model e.g. eBay
• Sales revenue model e.g. Amazon
• Affiliate revenue model e.g. Comparemunafa.com

The greater adoption of Internet and smartphones is the biggest driver of e-commerce in India. Internet penetration is rapidly increasing with around 300 million users in 2014. The smartphone is steadily growing and consists of 35% of the overall mobile phones market in the country.

Mr. Vivek Agarwal who is also the Co-founder of comparemunafa.com and me believe, the advent of e-commerce in India has revolutionised the approach towards running a business for best customer satisfaction and at scale. With innovation becoming the new strength, entrepreneurs are coming up with clutter-breaking ideas to create newer verticals. This has given rise to new shopping experiences to the customers. Retailers to reach the customers in newer ways are embracing these emerging experiences. At comparemunafa.com, we wanted to create an ecosystem, which offers a complete, inclusive and seamless shopping experience, cuts time and effort while saving money as you shop. We aim to be a satisfying and joyful ‘Online Mall’, with a large selection of high quality virtual stores offering the best value for money. For an e-commerce model as ours, the Omni channel model has turned out to be the best format in this emerging market and customer has the choice of where to buy from.

Challenges

Though the e-commerce sector is growing exponentially in India, it faces several challenges like high competition, customer mindset; high cash on delivery (CoD) based orders, reachability, poor courier services and other policy-related issues.

India is at the edge of an e-commerce revolution. Although e-commerce has been making rounds in the country for over a decade, it is in the recent years that the appropriate ecosystem has started to fall in place. Factors like accelerating internet access, staggering penetration of mobile phones and robust investment have driven the growth of this industry and if current projections are anything to go by, India is on route to becoming the world's fastest growing e-commerce market.

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