Reliance Industries’ foray into the e-commerce space will only raise the stakes higher
Indians are shopping like never before.. and a lot of it is happening on the internet. Bitten by the ‘unlimited option, jaw-dropping prices’ bug, our online shopping craze has contributed massively to making the Indian e-commerce industry one of the world’s fastest growing.
There is no stopping the mushrooming of start-up’s which are catering to almost all our wants and wishes. You name it and you have it.
The e-commerce industry in India is set to explode in the coming years. It is already expected to cross $50 billion by the end of 2018 and is projected to grow four folds in the next eight years.
The e-commerce industry is slowly emerging out of a slowdown that afflicted it two years back. New FDA guidelines, demonetization and GST had an adverse impact, particularly on the spending patterns of the Indian consumer. But the trend is now reversing. This along with increasing internet and mobile penetration, advanced shipping and payment options will further push the e-commerce industry on an upward trajectory.
Given the ongoing digital revolution, the number of internet users in the country is expected to cross 800 million by 2022. Out of this, over 40% will become digital shoppers
Whose piece of cake is it?
Online travel rules the roost accounting for 70% of the e-commerce market. The rest 30% is taken up by horizontal e-tailing, fashion, grocery, furniture, hotel, payment gateways, cab aggregators etc leading among others.
But one look at the top companies and it becomes clear that the growth in the e-commerce industry has been mostly fueled by online retail, especially horizontal e-commerce players like Amazon and Flipkart. They are the ones who will continue to lead the growth in the future as more and more people take to online shopping buoyed by greater options and deep discounts.
There were 100 million online shoppers in India last year, a jump from 69 million in 2016. This build-up will help the online retail market grow from the current 2% to 22% by 2022
Online retail – The big push
2017 was a defining moment for the online retail industry. The year brought huge domestic and foreign funding for the top three players, helping them diversify their services and infrastructure. From Flipkart launching its Global and Express delivery programme to Amazon venturing deep into Fashion and Grocery segment to Paytm launching its ‘Paytm Mall’, online services spread out far and wide.
2018 on the other hand, has already seen two big events – Alibaba and Paytm Mall’s investment in Big Basket and Walmart’s acquisition of Flipkart. Both these deals have huge implications especially in the grocery segment which has become the next big thing.
The push will also move towards private label brands as price-sensitive shoppers from tier-3 and tier 4 cities aggressively take to online shopping. Deep discounts and flash sales often prove costly for companies who can make more money through their private brands.
Future lies in innovation
E-commerce is the future of retail in India. With a rapidly expanding online base, the focus will be more on customer care, engagement and customized services. Artificial intelligence will be a key driver in this. From automated personalization tools to augmented reality, voice assistants to visual discovery, AI will take our shopping experience to a completely different level.
The West has already taken a lead in this, how can India then be far behind?