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The Future of eCommerce: The Present Reality and Future Transformation
For most of us,a life without e-commerce may seem preposterous.Be it online bill payment or sending gifts to loved ones, e-commerce forms the core of our activities nowadays.Although e-commerce trends have been oscillating in india over the past 15 years or so, we now have a suitable ecosystem in place and business is literally booming.
E-commerce in India is thriving,thanks to a booming online retail industry that defies slow economic growth and spiraling inflation.The Indian e-commerce industry has been growing at a staggering growth rate of 88%.The trend,when analyzed over the years,shows that the e-commerce industry
faced barriers,had a five-year-long dip and finally showed a positive growth rate by overcoming the drawbacks.
The Growth Story of E-Commerce in India
Between 2000 and 2005: The first wave of E-Commerce in India was characterized by a small online shopping user base, low internet penetration, slow internet speed, low consumer acceptance of online shopping and inadequate logistics infrastructure.Thereafter,the IT downturn in 2000 led to the collapse of more than 1,000 E-Commerce businesses in India. Following this, there was muted activity in the space in India between 2000 and 2005.
Between 2005 and 2010:There were basically two major transitions that took place that aided in the build of E-Commerce story in India.They were:
Online Travel:The entry of Low Cost Carriers (LCCs) in the Indian aviation sector in 2005 marked the beginning of the second wave of e-Commerce in India. The decision of LCCs to sell their tickets online and through third parties enabled the development of Online Travel Agents (OTAs).They developed their own websites and partnered with OTAs to distribute their tickets
online. The Indian Railways had already implemented the e-ticket booking initiative by the time LCCs started their online ticket booking schemes.
Online Retail:The growth of online retail was partly driven by changing urban consumer lifestyle and the need for convenience of shopping at home. This segment developed in the second wave in 2007 with the launch of multiple online retail websites.New businesses were driven by entrepreneurs who looked to differentiate themselves by enhancing customer experience and establishing a strong market presence.
Present Scenario:
The current structure of online retail market can be broadly divided into two parts:
- Category focused players or Vertical Players
- Multi category players or Horizontal Players
While the vertical players focused on penetrating a single category deeply to offer huge variety and range of products, horizontal players offered wide range of categories to the consumers making it a one stop online shop for them.The current trend is that either most of the single category players are
getting acquired by multi-category players or the single category players have started added multiple categories to their own business thus converting into Multi-category players.
The Way Ahead
The supporting ecosystem for E-Commerce has evolved significantly from what it was a decade ago.Internet is the key to the development of E-Commerce and has become prevalent in daily life. Apart,some of the major drivers are:
Mobile Apps:To fully utilize the e-commerce opportunity in the future,players will leverage the growing number of mobile devices in the country by developing mobile-compatible sites and applications.
Technological innovations:Technological innovations will be crucial for e-commerce firms to stay in the highly competitive market.
Focus on smaller towns:Indian e-commerce sites are gradually shifting their focus from metro cities tier II and smaller towns in sync with the Internet and mobile penetration.While bigger brands are not physically present in tier II and tier III cities of India, e-commerce makes these brands available to
people hailing from those places and thus, has been highly accepted in the smaller towns.
Innovative logistics: Organizations may streamline or re-invent logistics for their e-commerce portals to thrive.
Brand consolidation: The industry has already seen a number of consolidations.However,new alliances will be coming up. Most of the e-commerce companies have been bleeding and consolidation will happen to control the financial losses.
Personalized catalogue: Keeping customer satisfaction in mind, retail portals will optimise user accounts where each person’s choices will be recorded through dynamic programming for future access.Product personalization,sale of unique items,resale and multiple payment options will all cater to driving e-commerce across consumer segments.
The journey of e-commerce in the future may be rough and may require more efforts from both entrepreneurs and investors. To stand the test of time, Indian companies need a mixed-approach implementation that is influenced by globally tested strategies,along with local elements.It might have failed in the past decade but this time around,it is here to stay and grow more speedily than ever.
The Panel
The panel will focus on the next-generation of eCommerce.The first wave was focused on customer service and low price for commodities.The next wave of eCommerce companies now understand that in order to differentiate themselves, they have to have a unique point of view,proprietary product and operational excellence.The participants in this panel will share their perspectives on how to build a brand and grow an audience in an ecommerce world.
Basic Topics of Discussion
- What do retailers predict for the growth of e-commerce?
- What are the opportunities for growth?
- How can closer collaboration with the entire eco-system improve the bottom line?
- What are the challenges of integrating IT systems?
- How are online habits of shoppers changing?
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