Exploring the reasons behind the overwhelming popularity of e-commerce in India
In light of the increasing smartphone penetration, the launch of 4G networks and rising disposable income, e-commerce has emerged as a crucial segment of the current retail market in India. It is estimated that between 2018 and 2023, the value of the Indian e-commerce market will increase at a compound annual growth rate (CAGR) of 41%, from INR 2,375.43 Bn in 2017. The e-commerce industry has had a direct impact on the micro, small & medium enterprises (MSME) in India with respect to financing, technology and training and has a favourable cascading effect on other industries as well. Industry experts expect the Indian e-commerce industry to be on an upward growth trajectory and surpass the US to emerge as the second largest e-commerce market in the world by 2034.
Reasons for the growing popularity of the Indian e-commerce industry
Since the inception of e-commerce in India, many people have turned toward online shopping sites for purchasing their desired products. This is because the process of purchasing goods online is both fast and convenient. This apart, there are a number of other reasons for the growing popularity of e-commerce market in India –
Growth of digital wallets and online payments
The “Digital India” campaign and Demonetization has worked wonders for the e-commerce industry in the country. For convenience and safety, regular buyers are keeping a fixed amount of money in mobile wallets like PayTm, Ola Money, Mobiwik, BHIM etc. and using it for quick payments. Even banks have come up with their online wallets. There is also growing awareness about using net banking and debit/credit cards. To capitalize on this popularity, mobile wallets and banks are also flooding users with cashback and discount offers.
Increased smartphone penetration
Smartphones that come with advanced 3G/4G, Wi-Fi technologies are used by the approximate 168 million users in India till now. The rate of user dependability on smartphones has been on the rise across India. Thanks to growing smartphone penetration, Indian consumers are managing their electronic transactions using these devices for booking travel tickets, shopping, or paying bills. The ease-of-accessibility and secure operating systems of smartphones has increased the access of e-commerce services on these smartphones.
Affordable product options
The Indian e-commerce industry offers a variety of options for a single product to their consumers. Owing to the presence of multiple product websites, consumers have the option to choose from a varied range of products at competitive prices. Because of this, Indian consumers get the best deals with minimal prices. Moreover, e-commerce websites maintain a rich graphical user interface, which is further enhanced with appropriate and useful product graphics and other information. Like, taking the case of an e-shopping portal, the websites display the product with its pictures, varying sizes, or product colour, etc.
The e-commerce industry in India has the potential for further expansion owing to the considerable population of the country, primarily based in small towns. Market studies reveal that small-town Indians contribute around 41% of all online shoppers. With such a big share, there is a lot of scope and wide consumer base for e-commerce companies to hold ground. The leading players are already launching campaigns to tap the power of rural India.