Expansion of India’s e-commerce industry will trigger innovations in payments and delivery models as well as enable better use of technology such as wearables, drones and artificial intelligence, a study by Confederation of Indian Industry and Deloitte has said.
In the report titled ‘e-Commerce in India: A Game Changer for the Economy’, CII Director General Chandrajit Banerjee said the e-commerce industry has been directly impacting micro, small and medium enterprises and has a favourable cascading effect on other industries.
“It is helping connect small merchants with customers across India. Long-term impact of this on the economy would be increase in employment, growth in export revenue, better products and services to customers and increase in tax collection by ex-chequers,” the report said.
Increasing internet and smartphone penetration are expected to boost expansion of e-commerce sector in tier-II and tier-III cities, the report said. It said the biggest challenges to the industry’s growth have surfaced primarily in areas of taxation, logistics, payments, internet penetration and skilled manpower.
“Going forward, the most important thing is the collaboration between the government, industry and academia to improve efficiencies in e-commerce,” said Co-Chairman of CII’s national committee on e-commerce, Viresh Oberoi. “We are engaging with the government in states and at the Centre to help create an enabling environment for the industry,” he said.
The number of online shoppers in the country grew 95 per cent between 2013 and 2015, and the number is expected to reach 140 million by 2018 and 220 million by 2020, the report said. According to the report, the number of online shoppers in India as a percentage of total internet users grew to 11 per cent in 2015 from 9 per cent in 2013. It is expected to reach 36 per cent by 2020.
“From an investment perspective, considerable funding in the e-commerce ecosystem has led to emergence of new business models across B2B, B2C, logistics service providers, payment wallets, digital advertising and analytics,” Partner at Deloitte Touche Tohmatsu India LLP, Neeraj Jain said.
He said these investments have enabled the ecommerce companies to leverage leading technology and related practices to reach out to millions of new online customers by delivering services more effectively and efficiently.