Home Retail The state of Indian E-commerce – trends and opportunities

    The state of Indian E-commerce – trends and opportunities


    E-commerce has come a long way since its inception and is only getting bigger. As technology continues to grow rapidly, e-commerce retailers are adopting newer techniques to facilitate sellers and buyers to sell and buy online more efficiently, thanks to ever dropping rates of internet surfing – both for web and mobile interfaces – which is complimenting to the soaring population of internet users. It has hence become the key force behind driving the trend for e-commerce. The rise of social networks and mass adoption of mobile devices is acting as a catalyst to accelerate this drive further, shaping the e-commerce trends for the Indian market.

    Consumers are more connected than ever before and have more information and choices at their fingertips today. They are leaving behind their preferences, behaviour and interests, which create a knowledge ground for e-commerce companies to analyse behaviour pattern and offer more interesting and competitive products.

    The proliferation of this digital activity and resulting data is a stimulating factor for devising e-commerce strategies, thus affecting the business model and driving growth for e-commerce players in the Indian market. Let us establish more understanding considering the current scenario and in-sighting some of the upcoming trends in this space.

    Critical health of sector: Losers and gainers

    According to a study by Accel Partners, online shopping of physical goods in India will grow to US$ 8.5 billion in 2016 and the number of online shoppers in India will be more than double to 40 million. The internet user base is predicted to increase to 300 million by 2015.

    Does that mean that e-commerce is here to stay, and every small and big fish will survive? That might not be the case. The ones that show potential to succeed are international deep-pocket incumbents who have experience, concepts and variety of offerings, and  tend to grow at a fast pace as compared to the other existing players in the Indian market. Even Indian e-commerce players are trying hard to bring in similar concepts as their international competitors. They are trying to bring impending and imminent consolidation, which is evident from the probable mergers of India’s biggest e-commerce players.

    Key market and technology trends that we believe will define e-commerce in near future include:

    Brand loyalty

    Price has been the dominating factor in the Indian market and the customer is not hesitant in changing brands frequently to avail the lucrative offers presented by competing brands. There is a lot that e-commerce players in India would have to do to make their customers feel special to retain them, as the loyalty erodes fast when the shopper is confronted with promotions and deals. Knowing what your customers want and offering them accordingly can possibly drive this, which is possible by using big data techniques to predict consumer preference and behaviour.

    Retailer’s own logistics

    Logistics have been a major issue for online retailers in India, which leads them to build their own strategies in the absence of established systems to handle cash-on-delivery (CoD) and same-day shipments. Online market leaders are choosing to build their own logistics such as Flipkart, who has launched eKart that is open to its rivals as well.

    CoD rules in India

    The Indian market is yet not comfortable to adopt payments through credit or debit cards. CoD accounts for up to 60 per cent of transactions, according to Internet and Mobile Association of India and audit firm KPMG. Overdependence on cash-on-delivery mode of payment remains worrisome as the transactions add about 3 per cent additional costs. Also, the additional processes required for COD orders, longer payment cycle, higher instances of returns and associated costs are hurting margins.

    Improving customer experience with varied offerings and options

    With the advent of technology, online retailers are devising attractive delivery options such as same-day delivery or delivery within an hour, perks on buying from mobile apps, and try @ home @ your door for consumers that are leading improved customer experience. To further improve customer experiences, we might also see adoption of international practices such as digital or experiential stores and showrooms, pop-up and fulfillment stores and drones that will fascinate the Indian market. The other technologies that will affect these trends and help shape the e-commerce business include:

    Big data

    To gain, retain and attain more customers, online retailers would have to leverage technology to the fullest, and by developing strategies through analytics produced using big data will help in making customers feel special and increase brand loyalty. With the increasing adoption and use of smartphones, businesses are able to collect large amount of data on consumers, which can be further utilised to do target-based marketing and advertising.


    Brands have taken the mobile advertising route and are gradually picking up. Online retailers have realised the potential increase of online shoppers through their mobile phones in future. And as consumers grow more comfortable with using mobile devices for browsing and shopping, they are now more open to getting messages from brands via their mobiles. Businesses are implementing strategies for integrating mobile into their marketing campaigns and before they do that, they will have to make efforts to optimise legacy websites for mobile in order to improve customer experience. This is where responsive design will come into play. Fixing the mobile clicks is imperative as an unresponsive design may lead to the customer abandoning the site in a few seconds causing a low conversion rate and poor return on investments.


    Another important consideration is the social aspect and marketers have realised its importance very well. Product and service feedback via social media channels have an impressionable effect on the minds of the larger customer base.


    Indian e-commerce and online shopping are set to witness greater heights in the coming years, not just owing to the increasing internet population, but also due to the changing dynamics of the supporting ecosystem. The key players in the market are undertaking rigorous efforts to further enhance the areas like payment structure and logistics.

    Moreover, the Indian consumer’s perception of online shopping has experienced a substantial change and for the good. In view of these developments, both the investors and the aspiring e-commerce players have been granted numerous opportunities, who were thus far limiting themselves to the sidelines. Today, they are all taking a keen interest in the country’s e-commerce market.