From being in relative obscurity to a potential game-changer, online retail has captured a larger share of market space in a matter of just a few years. The report of the Indian and Mobile Association of India has revealed that Indian’s E-commerce market is growing at an average rate of 70% annually and has grown over 500% in the past three years. One of the largest online retailers in India, Flipkart has grown five times in volume of products sold between 2013 and 2014 whereas Snapdeal has grown six times in the same period.
Reasons for the Growth of E-Commerce
India is slowly shifting from physical stores or markets towards virtual shopping due to an increase in the number of smartphones, changing lifestyles, online banking facilities, tech-savvy generation, the boom of IT companies, avoidance of traffic jams and mental stress on the roads.
Increase in the number of internet usersAs per the latest figures, the current number of internet subscribers in India has reached across 243.2 million and has been increasing at a healthy rate.
A rise in the number of internet users has ultimately resulted in prospering the e-commerce industry since a large number of Indian consumers are now connected to the e-commerce marketplaces by using their internet-enabled handheld and desktops.
Rise in the middle-class consumers having disposable incomeRise of small and medium enterprises, foreign direct investment, multinational corporations have created a new generation of globally-minded Indian consumers since it has bought with itself a plethora of employment opportunities. This increase in employment opportunities has had a direct impact on the income and the purchasing power which has inclined the middle class to resort to e-commerce as the primary outlet for sophisticated consumer products and services.
Provision of cash on deliveryProvision of lucrative facilities such as cash on delivery by e-commerce websites such as Flipkart, Amazon, Snapdeal, and Jabong to the Indian consumers has helped in the growth of this industry. This is because the customers get a chance to inspect the purchased product before paying for it which has eased the process of purchasing the product or service.
Growth of mobile commerceApproximately 168 million users in India do electronic transactions by using their smartphones loaded with advanced 3G/4G and wifi technologies. Thus, the ease of accessibility and secure operating systems of smartphones have led to an increase in web access to e-commerce services.
Multiple products at cheap pricesThe consumers have a choice to choose from a varied range of options that are available for a single product as a result of which they get the best deals with minimal prices. Maintenance of rich graphical users by the e-commerce websites which is further enhanced with appropriate and useful product graphics which lead to the growth of online shopping. This is because the websites display the product with its pictures, varying sizes, product color that makes it easy for the consumers to choose.
The rate at which the e-commerce industry will grow is by 2023, it would acquire 6.5% of the total market share and would grow to become $56 billion due to various factors such as cash on delivery, free return, mobile apps, improvement in logistics, focus on smaller towns, technological innovations to boost of the e-commerce industry in India.