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Why Indian e-commerce needs to be ‘made in India’

India Digital - Retail-in-Asia

The internet user base in India has grown multifold in the recent past. Economists predict that the e-commerce industry may form the largest part of the Indian internet market by 2020, with a massive projected value of $100 billion.

However, the Indian e-commerce industry still has a long way to go, with only 40 million unique users out of an approximate 400 million internet users currently active in India ever having bought anything online.

SEE ALSO: India’s retail e-commerce sector small but still growing 

India’s e-commerce potential

Efforts to channelise India’s e-commerce potential must be based on an understanding of the country’s unique context. In India, the retail landscape is largely fragmented. Nearly 90 percent of the sector is currently unorganised, while organised retail and e-commerce account for 8 percent and 2 percent of the total retail respectively.

Also, while e-commerce across the world is viewed as a paragon of availability and convenience, Indian consumers — especially those in metro cities — tend to look at online shopping as the ultimate discount platform.

The attempt at consumer acquisition through deep discounting has not been very successful and has instead resulted in a distinct lack of customer loyalty. It must also be noted that the internet connectivity infrastructure in India is very poor, especially outside city limits, which also acts as a major deterrent for buyers.

Online retail

Another area where India is currently lacking is online grocery retail. Unlike the USA, India took a very long time to warm up to the idea of buying items like vegetables online. Even today, very few startups are able to monetise their ideas in this field. E-commerce firms need to understand the specific background of Indian buyers to be able to excite them.

Going asset-light and hyperlocal is the perfect approach in India, as the country already has a well laid-out infrastructure in the form of 11 million retail outlets. Enabling offline Indian merchants to participate in the digital boom is the innovation Indian e-commerce needs to unlock its full potential.

(Source: Your Story)

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