The integration of ecommerce in consumerism has been seamless and exponential in the past few years, having transformed the manner in which worldwide business is conducted today.
The global ecommerce market is ascending at a mammoth growth rate of 12.7% year-on-year with the current revenues standing at $2.012 trillion. 1
The Indian ecommerce sector has also seen tremendous surge. The digital revolution aided by proliferation of smartphones (560.01 million internet users), affordable data (120 million online shoppers), personal disposable incomes (29.8 million credit card holders), consolidation of industry players, and government initiatives such as Digital India, Start Up India, and Digital Udaan have all cohesively contributed to its growth2. In addition, the country’s ecommerce revenue is expected to catapult from $39 billion in 2017 to $120 billion in 2020 growing at an annual rate of 51% as per IBEF.
The Indian consumer is in turn presented with a plethora of domestic and international products delivered at their doorsteps, allowing businesses to flourish like never before. Hence, it becomes interesting to observe the current shape of the Indian ecommerce sector including areas which may be further moulded in 2019.
According to an IBEF November 2018 infographic, there are about 1.2 million transactions per day in ecommerce retailing, of which 48% comprise electronic goods. Another 29% consists of Apparels. Hence, these two categories are expected to continue dominating Indian ecommerce this year as well. In addition, the increasing investment in ecommerce firms due to the rise in digital literacy is allowing new players to enter the market. Private and venture capital deals are deduced to increase. About 40 deals worth $1.12 billion were completed in the first half of 2018, nearly double the number of the deals completed in the entirety of 2017. These numbers are expected to rise in 2019.
E-commerce companies are increasingly offering subscription-based offerings to consumers wherein they receive certain extra benefits or tailored services. For instance, Amazon Prime, Amazon’s subscription service allows subscribers to avail early access to selected deals and free one-day delivery among other benefits. While some ecommerce platforms have already begun similar subscription models of their own, others are also envisaging to provide similar options to their consumers.
Increased vernacular content
The rural Indian population was estimated at 906 million as per Census 2011. However, merely 173.42 million of them were internet users as of June 2018. Online retailers are therefore opining that the vernacular segment will be a new growth driver even as internet penetration is expected to grow as high as 45% by 2021, compared to the current rate of 18%. 3
Flipkart had already begun converting speech to text in 10 Indian languages in collaboration with an artificial intelligence company called Liv.ai. Other ecommerce players are expected to follow suit in order to diverge their target audiences to attract the vernacular segment. Another firm called Reverie Language Technologies is on the verge of raising $20 million in its quest to create language equality in the Indian digital realm.
Ancillary services and cashless transactions
Industry players are leveraging certain ancillary services aligned with their products and services. Some examples include introducing their own payment gateways (Flipkart’s Payzippy), e-wallets (Amazon’s Pay Balance), and even payment banks such as the those of Paytm and Airtel. These services are contributing to cashless transactions in the sector. A net addition of nearly 140 million debit cards has been recorded since the past few years4, while UPI transactions in India crossed 620 million in December 20185. In addition, according to a report by Google India and BCG, digital consumer spending in India is expected to increase by two-fold crossing $100 billion by 2020; driven by women and new internet users from Tier II and Tier III cities6.
Almost one-third of 3.5 billion searches conducted on Google today consist of voice searches, which will further comprise half of all searches within the next two years7. AI-enabled voice assistants like Alexa (Amazon), Siri (Apple), and Google Personal Assistant are the major contributors to this shift from text-based search to voice integrated searches. All these developments will push ecommerce companies to adopt similar or even better content marketing strategies.
With each passing year, the ecommerce sector in India is assuming a more definitive shape. It then becomes critical for businesses to sharpen their strategies and align with these focal points. As the lines between the offline and online world continue to blur, the need of the hour is for both older and emerging brands to enter the world of ecommerce with strategies that place them a cut above the rest.