Internet is penetrating all parts of India, with about three Indians being connected to the online world every second. If the same trend continues then an estimate says that about 1 billion Indians will go online by 2030, a huge number for e-commerce indeed!
The rising number of online shoppers, developing infrastructure and affordable technology will prove to be a boon for this industry, says a report by Goldman Sachs. The report also mentions tremendous growth amounting to about 2.5 per cent of the nation’s GDP that would be almost 15 times growth for this buzzing online industry. If these numbers are to be believed then e-commerce in India will have around 300 million online shoppers with the prosperity to complete their online transaction.
All e-commerce giants are currently going mobile by making their business available on mobile app. The big screen revolution may take time but this small screen shopping revolution is already under formation. There is exponential growth in the number of smart phone users with these devices getting cheaper and mobile internet being affordable.
I hope 15 years later people forget about e-commerce, because they think it’s like electricity – Jack Ma, Founder & Executive Chairman Alibaba Group
E-commerce giants want online shopping to be woven in the common man’s routine and it should come as casually as switching on the fan and expect that it will move! Like many other advances that are accepted in our daily lives, e-commerce will also be the undisputed part of our routines.
Young Demographics of India Will Fuel This Thought
India will work as a change maker owing to its young demographics that make it the youngest population globally. The youth will be open to change and would be ready to break out of the conventional shopping trends. All these factors together has provoked a thought – Would Indian e-commerce grow beyond predictions?
Technological Advancements that Connect India to the Online World
Another study talks about the role of technological advancements by the year 2030. The advent of advanced robotics and inclusion of basic robotics in educational systems will give rise to many technology leaders in the next 15 years. Being online is becoming a habit with everything starting from education to identification getting online. The statistics based on the current trend of artificial intelligence, internet of things, virtual reality and social media has further ascertained that three out of every four Indians would be having smart phone with internet connectivity. All these progressions point towards immense growth of e-commerce by 2030, just 14 years to go!
E-commerce has bright future and India will soon witness a booming online industry with seasoned online players like Amazon, Flipkart, LatestOne, Snapdeal and many other budding players ready to spend hefty to attract their customers, but is there any reason for conventional retail to be scared? In my view – NO.
India Retail at a Glance
While one set of study is predicting super growth for e-commerce in India, there is another set of study supporting the existence of conventional retail and its prospective growth by 2030. Growth due to rise in population and increasing demand would reach out to both segments – online and retail.
A report published by Pricewaterhouse-Coopers (PWC) says that even after witnessing exponential growth and multi-billion dollar valuation, e-commerce portals would not be threat to the conventional retail. Traditional retailers are there to stay and no change or trend would deter its existence in nation like India where shopping is not just fulfilling needs but it is more of an experience. Online shopping will always remain #2 for the shoppers as the touch and feel of the product that retail gives is difficult to match.
Retail market in India is huge and the online retail is just 0.4% of that which would grow but never to the extent may it grow in other countries. What will stop e-commerce from taking away the substantial share from conventional retail?
Here are the few things:
- Poor connectivity that would hinder the completion of transaction.
- Maintaining the secured payment option. Cash on Delivery would result into financial burden on online retailer.
- Lower profits as online is conceived as cheap and would never attract customers if the price is kept same as the conventional retail. This is extra burden financially.
- Scarcity of skilled and dedicated human resource.
- Regulatory barriers.
The profitability issue is one of the major reasons that stand against e-commerce in India, where COD has remained the preferred mode of payment and free shipping is considered to be birth right of the shopper. The rejections are more in case of COD and these results into hefty shipping charges that bring down the profitability.
Consumer Behavior & State of Art Shopping Malls
When e-commerce is putting all possible efforts in the form of discounts, freebies, easy returns, numerous choices and secure payment options, there have been great advances made by traditional retail as well!
The face of shopping mall is changing. They are no more designed as boring standalone shops but the clusters of all brands are available at single place. Conventional retails like Croma, Big Bazaar, Star India Bazaar, Pantaloons, and many more are buzzing with walk-in customers who want to experience the shopping fun and also spend their weekend enjoying modern infrastructure.
India Retail 2030 – The Final Verdict
Role of retail sector is commendable in Indian economy as it accounts to 22 per cent of the country’s GDP. Currently online retail is just 0.4 per cent of this huge retail sector. The traditional retail is observing growth at the rate of 10 per cent whereas the online retail is growing at faster pace, which is about 50 per cent to 60 per cent growth rate. Even when this growth rate continues or it changes to some extent, there would be no fright for the conventional retail looking at its current numbers and Indian consumer’s buying behavior.
At the same time, one cannot deny the growth that will come in the e-commerce sector as it is thriving on the four strong pillars – Convenience, Cash on Delivery, Customer Satisfaction and Competitive Pricing. This fight will go a long way and the one who will win is CONSUMER, the king of retail whether online or traditional!