Glancing At India's Ecommerce Industry

The Indian ecommerce sector is predicted to reach USD 400 Billion by 2030, propelled by government efforts, an increase in internet and smartphone penetration, an unprecedented surge in the number of online buyers, and the rising popularity of the D2C model

With the advent of new business models, including direct-to-consumer (D2C) and the quick ascent of social commerce, the ecommerce sector in India is currently in a late growth stage. Additionally, the nation is home to more than 5K active e-commerce startups that are driving growth by promoting the benefits of digital commerce throughout the consumer retail sector. 

Even before the country begins to roll out the most recent mobile broadband technology, Indian consumers are increasingly embracing 5G smartphones. In 2020, high consumer demand following the lockdown helped smartphone shipments reach 150 million units in 2020, and 5G smartphone shipments surpassed four million. IAMAI and Kantar's report also projects that the number of internet users in India will rise from 622 million in 2020 to 900 million by 2025, with a CAGR of 45 per cent during that time.

As incomes, internet usage, and penetration grow in India, there is a visible change in the way people are shopping. With the Big Three—Amazon, Walmart, and Alibaba—entering the ecommerce sector in India, the market is further maturing and expanding its footprint to the farthest locations across the country.


The Pandemic's Play

The Indian e-commerce market has been one of the biggest beneficiaries of the pandemic as containment measures brought the convenience of online shopping to millions, prompting savvy online shoppers to buy more. Social distancing constraints throughout the year, a massive smartphone base, and reliable broadband boosted ecommerce uptake beyond the metros, deep into smaller cities and communities, bringing an element of confidence in online commerce. With the pandemic's push, Tier 2 and Tier 3 cities are witnessing a 77 per cent increase in e-commerce activity in 2021 compared to the previous year, as per a recent report.

Last year, we also witnessed a series of unique consumer trends, from changing category preferences to the emergence of "new necessities," from the adoption of native languages to the proliferation of payment methods in a new era. Same with Amazon—it saw the trend of neighbourhood Kirana stores and offline retailers joining in to leverage digital technology to reach their customers' doorsteps.

Changing The Shopping Experience

With everything possible at our fingertips, we sometimes forget how easy it has become to buy products and services as and when we want them. Online shopping has left an indelible mark on society, far beyond the ability to buy items. 

Online buying and selling has enabled multiple interactions at the same time, whereas a single in-store conversation is impossible. It also gives consumers access to information, the ability to shop between devices, and the ability to share experiences with others. This has completely changed consumer expectations and the way they shop. As their shopping habits continue to evolve with technology, businesses are only left to adapt to the times to stay relevant. 

The Growth Story

Out of the many reasons, here are some of the offerings that have helped the Indian ecommerce march towards a profitable road:

Improved User Experience: Today, the consumer wants what he wants when he wants it. The main drivers of the explosive expansion of online commerce are the quick uptake of smartphones, easy and affordable access to technology, and the convenience of shopping from anywhere, at any time.

Personalisation: When we go to an offline store, the store is the same for everyone, but when it comes to ecommerce, we can tailor experiences based on consumers' tastes and preferences.

We are all mobile: With a mobile device in everybody's hand today, the ability to scout just about anything online has become easy. This drives the ecommerce industry’s growth.

Extremely Convenient: Online stores make it easy for shoppers to find the right size and colour for their clothing without having to search through a bunch of different items. It can be shipped directly to their doorstep, without them ever having to go to a physical store. This type of shopping can be done on your break from your desk, or anywhere else. And, as people increasingly value time and convenience, it is appreciated that consumers no longer have to search for the mall.

It's Social: With the proliferation of channels like Facebook Marketplace, Instagram Shop, and TikTok, social media is now an essential part of ecommerce. Since social media is so popular and people spend a lot of time using these channels, it's important to have an online store that includes these platforms.

Top Trends

Some of the trends that made a difference to the overall consumer experience and purchase journey are below:

Augmented reality: This technology helps shoppers make purchase decisions because they can actually see what they are buying. AR is revolutionising the shopping experience in industries such as fashion and upholstery. This is because it allows the customer to feel the item without actually having it around.

Voice search: More and more people not only own smart speakers but also rely on voice assistants to complete their daily tasks. As more homes adopt smart speakers, more consumers will use voice search to shop online, order groceries, and organise their lives. The rise of voice search creates opportunities for e-commerce businesses in terms of keywords and content.

AI helps shops learn about shoppers: Artificial intelligence (AI) and machine learning give customers an automated and personalised shopping experience. AI continually collects data about how customers shop, when they buy, and what they want from their products and services. This is a technology that businesses wouldn't want to ignore.

Big data will be used to create personalised experiences: Today, many consumers are more aware that ecommerce sites collect personally identifiable information, which is at risk. For this reason, experts vouch for the benefits of big data and how it affects the overall personalised shopping experience in a positive way.

Chatbots enhance shopping experiences: Chatbots interact with online shoppers just as salespeople do in-store. Today's shoppers want to find and buy products in a few clicks, but that may be tiresome. This is where chatbots can intervene and drive sales.

Video: Video has been proven to be an excellent way to interact with clients. Creating videos on your internet website is an excellent way to immediately clutch and interact with consumers and tell them about your product or service.

Omni-channel: Over the last two years, declining shop traffic and rising ecommerce usage have given omnichannel a tremendous boost, and it will continue to grow in 2022. As D2C brands become more aware of how limiting it is to only sell through one channel, they are also embracing omnichannel strategies alongside it. Discount-driven trade is giving way to value-and convenience-driven commerce. Customers receive a smooth experience from an omnichannel strategy regardless of the shopping platform.

Two-tier cities continue to drive growth: The expansion of India's ecommerce sector is being driven by the growing number of aspirant consumers from Tier II+ cities. In order to provide consumers in "Bharat" with a seamless shopping experience, companies have recognised the enormous development potential of ecommerce in Tier-II+ cities in India. As a result, they are spending significantly on infrastructure.

How Brands Are Responding

Consumer brands are seeking to establish direct relations with end customers for a variety of reasons: to come up with deeper insights about consumer needs, to keep control over their brand experience, and to differentiate their proposition to consumers.

For any brand that has considered establishing a D2C channel in the past and decided against it, now could be the time to reconsider. Covid-19 has accelerated profound business trends, including the large consumer shift to digital channels. Many companies are active in launching new DTC programmes during the pandemic. Recent examples are PepsiCo and Kraft Heinz.

The overwhelming majority of consumer brands are accustomed to selling through intermediaries, including retailers, online marketplaces, and specialised distributors. Their experience with direct consumer relationships and e-commerce is limited. As a result, they often hesitate to launch an e-commerce channel despite the obvious opportunity it offers.

E-commerce Advertising In India

Today, e-commerce advertising is deemed to be a significant contributor to India’s advertising expenditure. The AdEx of the online retail sector has grown by 156 per cent between 2019 and 2021, owing to the pandemic. While the crisis accelerated the adoption of e-commerce in India by consumers, it also forced brands to tweak their retail strategy to finally get their end consumers on board.

Over the past five years, wealthier urban residents and urban-dwelling cohorts have spurred more investment and advancement in this space. According to business observers, with the use of local dialects and the inclusion of hyperlocal companies, the share of spending in tier-II cities and beyond is currently growing substantially and opening up contemporary commerce opportunities frequently, according to business observers. Evolving consumer behaviour has also had an impact on Indian sophisticated marketing. 

It is anticipated that the user base for product ecommerce will expand more quickly than those for social media and search engines. According to RedSeer, an extra 300 to 350 million people will purchase online, 90 per cent of whom will reside in Tier 2 and above cities. This will not only change the method in which customers buy and sell, but it will also give brands new chances to connect with their target audiences through e-commerce platforms.

Ecommerce has seen significant growth in recent times and has overall acceptance from all tiers of society. As such, having a prominent presence on ecommerce becomes as vital as showcasing brands prominently in physical stores—for all intents and purposes, they function in a similar manner for the consumer. And with many improved options to reach consumers on the platform, it becomes even more important to have a strong presence, especially at the point of sale. And with increased internet accessibility in the country, ecommerce is set to continue to dominate, making it one of the most important mediums to be present in.


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