New Technologies to Change the Future of e-Commerce
Quikr is a horizontal classifieds in India and was founded in 2008. The Mumbai based company has raised around $46 million in various rounds of funding from Norwest Venture Partners, Nokia Growth Partners, eBay and others.
Although e-Commerce as a concept has been around in India for over a decade, the entire ecosystem has come around to support its growth in the last five years or so. Enjoying consistent CAGR of about 50 percent in the last five years, in its ‘second wave’, the e-Commerce industry seems to be emerging on solid footing and allaying fears of a meltdown amongst many skeptics. The credit goes in part to large scale changes such as consumer attitudes and spending patterns, infrastructure availability and in generous measure to the players who have constantly innovated and adapted, thus riding the wave. Yes, e-Commerce is here to stay.
Mobile Internet – Closing the Gap between Rural and Urban Consumption
According to a 2013 report by Avendus, the penetration of mobile Internet in India is driven by three key factors: access devices at the right cost, availability of affordable data connectivity options and a compelling reason for users to adopt the technology, such as e-Commerce. The gap between the consumption pattern of rural and urban India is slowly becoming narrower. The rural population is now leading a more aspirational life. In rural areas, internet usage reached 68 million in October 2013 and was estimated to have crossed 72 million by the end of year 2013, as stated by a report by Internet and Mobile Association of India (IAMAI) and IMRB International. For a lot of rural consumers, their mobile would be their only screen to the internet. With the arrival of smart phones in rural areas, increased internet penetration has created numerous opportunities for e-Commerce players in the Indian market.
Reaching the Offline Audience for an Online Experience
Since e-Commerce companies are interested in leveraging m-Commerce in the Indian market, companies have developed unique ways to reach out to potential customers. While consumer engagement over mobile devices could be as simple as SMS marketing or advertising on online market places, some companies have become innovative by introducing services like missed call. Users simply give a missed call to a highly publicized number, and they would be called back by the company�s customer care team to take down the details of the ad and post it on the platform on behalf of these users. This approach has reached millions of users across the country. In India, where technology is at a nascent stage and many people are still learning about the internet, local understanding and innovation can go a long way towards combating computer illiteracy.
New Wave of Technology – Better Logistics and Infrastructure
Many e-Commerce companies are building their technology platforms from the ground up and are taking their ideas to the market. Choosing the right payment gateway for online transactions is very important since e-Commerce companies are expected to process payments quickly, easily and securely. It is imperative for these companies to assure consumers that their payment details are confidential and that there is no scope for fraud. The Cash on Delivery model has tapped another kind of consumer, one who is either uncomfortable or unfamiliar with online payments and prefers handing over cash in exchange for what they buy.
Home delivery service is something that Indians use on a regular basis, which is well understood by the e-Commerce industry. While e-Retailers can use courier companies to deliver their product to customers, there are also specialist companies that handle additional logistics and product delivery for e-Commerce companies. Coverage of smaller towns is still developing and to overcome this hurdle, Indian Post is exploring the option of providing specialized logistics solutions for e-Commerce.
Another factor that drives technology in e-Commerce is customer engagement through various social platforms. It is important for an e-Commerce company to be active across social networking sites to engage consumers at an innovative level.
Constant innovation and engagement can bring a significant change in the e-Commerce market.
FDI to Expand Innovation and Growth
In 2012, the majority of Private Equity and Venture Capital deals under $10 million were made in the e-Commerce space, as highlighted in Bain’s India Private Equity Report 2012. The report states that e-Commerce grew further in 2013, as there has been a doubling of deals valued at less than $10 million in the e-Commerce space, from 12 percent in 2011 to 23 percent in 2012 of the total deals. It’s safe to say that foreign direct investment will increase India�s capital and expand the outreach of e-Commerce companies. Consumers will get more options while shopping online at lower prices while trust and payment security will continue to be important for e-Retailers. Adapting to global technology and practices will give a wider scope for local players to improve their business models. Opening up this sector to FDI will be good for consumers and Indian businesses as well as it can boost the entire ecosystem which will have a strong impact in the domestic industry.
Stay Tuned!
For both start-ups and established e-Commerce players, the focus remains on educating consumers and providing free support services. Innovation continues to boost the e-Commerce industry in India and yet, even more interesting things are in the offering. As e-Commerce players move towards tier 2 and tier 3 cities, it will be essential to keep in mind the unique needs of those consumers and how to meet their expectations. Due to increasing reliance on mobile phones, e-Commerce players will need to build more confidence in online and mobile transactions, as payments and mobile are going to be two main elements that drive growth. India is one of the fastest emerging internet markets in the world and we can expect great potential for innovation from the e-Commerce industry.
Article Source – Silicon India Magazine (Print)