2014 probably would have been the most fascinating year for e-commerce in India. This year witnessed acquisition of largest fashion e-tailer- Myntra, Reliance’s entry into e-commerce, Flipkart’s Big Billion Dollar Day blunder and many such events, which would define the next course of e-commerce in this country.
Billion has become new million, when it comes to investment in this sector and e-commerce became one of the most sought after investment choice, outplaying even the conventional sectors like real estate, financial services and infrastructure.
Now, when 2014 is about to reach its conclusion we at Zepo were mulling over how 2015 would be. India, where e-commerce only sounded like a alien almost a decade back, is now on its way to become largest e-commerce market in Asia Pacific region.
We have listed some of the trends that would hit e-commerce in 2015. Do let us know if you think differently!
Contents
Online Grocery Will Be Hottest ECommerce Growth Vertical
One of the biggest hurdles that is deterring e-commerce firms from scaling is the Indian consumers’ desire to physically inspect a product before purchasing it. And certainly an online store cannot render this facility to them.
However, the reason to inspect the product increases when the product in question is food and groceries. But gradually Indian consumers are shedding their obsession to physically inspect products and they are doubting online stores lesser than before. So now even even grocery business has gone online.
The two bigger players in this domain are Bigbasket and Localbanya (and there are many others operating in various cities). While Localbanya currently operates only in Mumbai and adjoining Thane, Bigbasket has spread its wings in Mumbai, Pune, Hyderabad and Bengaluru. Infact, in September it also raised a funding of INR 2 billion.
However storing a perishable item is difficult and expensive than storing a non-perishable item, say a mobile phone. Thus, being an online grocer becomes quite capital intensive, and hence you do not see any player who have expanded to an entire state, let alone entire country. However, Pragya Singh from Technopak has commented, “Urban India’s increasing shortage of time is fuelling the growth of online grocery” and in 2015 we are expecting atleast 20 metropolises to be fully covered by e-grocers.
7 out of 10 Consumers Will shop from Mobile!
It’s apparent and I always say that mobile devices have changed the way we engage with our daily lives. That change is now visible in our online shopping behavior too and so the preference of mobile devices over desktops/PCs is steadily increasing.
Mobile devices already account for approximately 50% of traffic for all marketplaces. Even on our ecommerce platform, we have experienced surge in their mobile traffic from mobile devices.
The increasing affordability of smartphones and accessibility of internet among Indian middle class has boosted m-commerce. Less than a year ago mobile traffic accounted for less than 10% of the entire traffic to Flipkart but now the same figure is close to 50%.
In the year 2015 we expect m-commerce to increase further and I believe the total mobile traffic would be account for about 70-75% of the entire e-commerce traffic.
India Post may be the most sought after Delivery man
With the increasing accessibility of internet, the communication method of Indians also fundamentally changed. What once apparently used to be the only mode to communicate around a decade back- paper-based communication, is now replaced by chats, e-mails and messaging apps. The onslaught of internet has evidently sucked the blood out of India Post- the government operated postal system. But the same internet turned out to be savior for India Post. Almost 12 months back India Post jumped into the bandwagon of e-commerce and did transaction of more than 280 million.
Now, India Post is apparently the largest postal network in the world with approximately 1.55 lakh post offices. It has widest reach compared to any logistics provider and it will certainly exploit to create the largest delivery network for e-com firms.
Undoubtedly, it will also have a smoother road to cover compared to its counterparts, given the fact that it is totally government backed firm. According to figures shared by India Post, delivery and logistics makes up 12% of the e-commerce market and in 2015 India Post may just have one of the largest shares.
Small scale Retailers to face stiff competition from marketplaces
While it is evident the volume of online retail is going to drastically increase over the period of time, majority of these sales are going to come from already established marketplaces like Flipkart, Snapdeal and Amazon.
Research and consulting firm Spire had predicted that within next 4-5 years, ecommerce industry is going to consolidate, with only 2-3 players surviving at the end. According to eTailing India research, Indian Ecommerce Market will reach $90 Billion by 2019.
The fact is that there is a fierce battle going at the top between big players and billions are being poured to out-compete the rival. Earlier it was only Flipkart and Snapdeal, then Amazon entered, and now Alibaba has also decided to join the race by declaring to step up its investment. All these developments have made e-commerce a capital intensive business. It has become game of the survival of the fittest and richest.
Small scale retailers are going to hard time to keep up with the pace.
Regularization of e-commerce in India
With the growing resentment in online consumers, largely after the Flipkart’s Big Billion Dollar day disaster, even Indian government has taken note of the matter and has assured online shoppers of the quick reform. Commerce and industry minister Nirmala Seetharaman has been heard many times speaking about the government stand to take some credible action. Infact, consumer associations have even approached the cabinet to bring online shoppers under the purview of consumer law.
The fact is that brick and mortar store owners are experiencing decline in their business due to e-commerce and they are certainly going to mount pressure on government. Currently, government’s stand on e-commerce is not concrete and some rules are absolutely mockable.
2015 is sure to see regularization of this industry by government!
In our view, these are the Top 5 trends that Indian Ecommerce space will see in 2015.
Did we miss out any?
[box type=”shadow” ]About the Author: Ajit Kumar Singh is an integral part of Marketing team at Zepo, a leading Indian eCommerce SAAS platform.[/box]
it is not enough information of using mobile commerce in india