E-commerce can be defined as the act of purchasing and selling goods online or through the internet. Before we talk about the future and scope of e-commerce in India, let’s get a basic understanding of what it means. In simple terms, e-commerce is the act of purchasing and selling goods online.
In addition to images of the products, sellers’ websites display prices and descriptions. Buyers have a variety of payment options, including cash on delivery, e-wallets, net banking, credit cards, etc.
Shipping products to buyers and ensuring that they arrive safely and on time are the responsibilities of online sellers.
Different models of e-commerce exist:
- B2C – Business-to-consumer sales; this is the sale of goods directly to the consumer
- B2B – business that sells goods to other businesses, such as wholesalers, office equipment, construction equipment sellers.
- B2G – Companies that deal exclusively with Government entities.
- C2B – The best examples of C2B are positive customer reviews. As a customer produces something, it adds value to the company, and the company consumes it.
With so many internet connections and mobile devices available in India – currently there are over 776,45 million internet connections – it has also become very easy to buy and sell online.
Benefits of E-Commerce
The growing scope of eCommerce is also a result of innumerable benefits offered by online sales and purchasing to buyers and sellers alike.
According to the Indian Business Economics Foundation, the value of India’s e-commerce industry was 38.5 billion dollars in 2017, and it is expected to hit 200 billion dollars by 2026. That gives us a good idea of e-commerce’s future.
As a seller, it offers the following advantages:
- As long as sellers are willing to ship, they can obtain customers from essentially anywhere in the world, regardless of where they live.
- Online sales can increase the sales of even the smallest businesses
- Infrastructure costs can be significantly reduced because they do not need to rent or purchase expensive locations or pay for interiors, displays, etc.
- Online stores are able to run with minimal staff, which can result in substantial savings. Merchants can also save on overheads, such as electric and water bills.
- There is no need to worry about being locked out during holidays, strikes, or lockdowns because online storefronts are open 24/7.
- Market demands can be quickly met by them
- Various products can be sold by sellers
- Offering customers tailored offers, discounts, and services based on their buying patterns and preferences
- Scaling a business is easy
- Small traders and manufacturers can gain legitimacy by selling online on sites such as Amazon, Flipkart, etc.
Shoppers benefit from online shopping
- Shopping convenience – people can shop whenever they like, no matter where they are. No need to worry about stores closing on holidays, holidays, commuting, traffic, etc.
- Different online stores can be easily compared in terms of pricing and products
- As the gateways are secure and encrypted, it provides more convenience and safety
- Those who are elderly, differently abled, confined to their homes due to illnesses or injuries, mothers with small children – online shopping can be especially helpful for such people, since they can shop comfortably without worrying about falling, the kids running amok, being shoved and pushed, etc.
- On their websites, online stores clearly state their return and exchange policies, making it easier for consumers to make a decision
- Consumers can find detailed information about a product, its working, its materials and ingredients – even a video demonstration. Consumers can then make an educated choice.
- Many companies are now selling their products online, so there are a lot of choices
- Shopping online is a great way to keep your family safe, especially during times like this – when people are afraid to go out in public because of the global pandemic.
Why e-commerce is so important
The current Covid-19 pandemic scenario when there are nationwide lockdowns makes e-commerce of particular importance because of all the advantages it can offer sellers and buyers alike.
Traditional retailers also quickly set up online stores to maintain business continuity during the crisis. This bodes well for the future of e-commerce around the globe. Consumers can now buy anything from groceries to sports equipment online.
Over the past year, e-commerce sales have increased by 77% globally. In India alone, eCommerce sales have grown by 51% annually.
Manufacturers and traders in remote, rural areas can sell their products online through E-commerce; their own local markets may be too small and do not have the kind of consumers the seller needs.
These businesses can sell their products to customers throughout the country with the help of online selling; for example, a farmer in Maharashtra can sell bajra or jowar to a consumer in Kerala, which is unlikely to happen without E-commerce.
As a result, those who live in areas where something is difficult to obtain locally can easily purchase it online – that’s the nature of E-commerce.
Ecommerce’s impact on business
In spite of this, some positive changes have also been affected, even though it has had a negative impact on brick-and-mortar stores. The company is unable to offer the same kind of discounts offered online, for one, and has to maintain working hours, so it has affected traditional businesses.
Business as usual has become a matter of adapting or perishing. Because of this, many physical businesses have also begun getting on the eCommerce business; even grocery chains like Reliance Fresh and Big Bazaar (which was recently acquired by Reliance) offer online shopping for groceries.
Their stores pack and send customers’ orders directly to their homes. This gives them a double advantage – both online and walk-in customers, thus increasing their sales.
Taking e-commerce and online shopping as a whole, the impact on the economy is definitely positive. We have already seen how it has benefited both buyers and sellers.
In India, there are many challenges for ecommerce businesses
Despite the rapid growth of eCommerce business in India, there are challenges to overcome. Here are a few:
- In order to improve ecommerce governance, we need a comprehensive ecommerce framework
- There is a need to streamline return and exchange policies; some companies are too liberal, while others are very strict
- Payment ease can be increased by strengthening and improving the UPI framework
- It is imperative to improve data security, along the lines of the GDPR implemented in the EU.
- There is a need for strict laws to combat internet fraud.
- It is important for online sellers to anticipate the potential needs of customers from small towns where internet penetration is low
- It is still difficult for people to make online purchases because they are untrusting of the seller or website.
- Many people remain uncomfortable with technology, despite the proliferation of the Internet, mobile devices, and e-commerce.
- The native language of India is often preferred over English, which is pretty much the standard language of choice for websites in India. It is possible to lose the original meaning in translations, and descriptions may actually be expressed in a completely different way as a result.
- Consumers aren’t the only ones unwilling to adopt technology – many traders are as well. If more retailers take the initiative to establish their own online storefronts, the ecommerce industry in India will prosper.
- Several regions in the country object to Ecommerce as a threat to their business. The opposition often takes violent forms, such as shutting down warehouses or agitating.
Future Trends in Ecommerce in India
- India has a high mobile penetration rate, which means there are more mobile shoppers
- Wearables may become more common in the future
- Small stores may be able to market and brand themselves better with more small stores going online
- Greater personalization of ads, retargeting, and automated marketing to ensure maximum conversion of visitors, abandoned cart shoppers etc.
- Several western countries have already taken advantage of the subscriber model of shopping. For example, Amazon offers monthly grocery packages that include detergent powder, toilet paper, toothpaste, bath soap, garbage bags, etc. The consumer pays in advance – say, for 6 months, or 3 months, or 12 months; and they receive the stuff in the first week of the month, without having to place an order each time. For the seller, the advantage is that they get more money in bulk. It’s a win-win situation.
What will be the future scope of online shopping in India?
Since e-business has really caught on in this country, the scope of e-business is expected to be ever-increasing and growing in the near future. In addition to its 49% stake in Future Group, Amazon has already invested heavily in the Indian market, hoping to conquer the market.
They plan to combine online and offline stores to maximize their sales potential. Flipkart, the online retail giant from India, opened its first offline stores last year and plans to open additional ones in smaller cities.
‘Saathi’, a joint program between Google and Tata Trust, aims to increase access to the internet and mobile technology among rural women.
As part of its Digital India program, the Indian government provides several incentives for startups, cyber parks, and so on.
The Indian E-commerce industry has nearly 20,000 companies, and more are expected to join every month. It is expected that by 2034, we will surpass the US when it comes to online shopping, becoming the second-largest e-commerce economy in the world after the US.