The future looks good.
Despite the bleakness, we see at the moment. Or…may be, to some extent, because of it.
India is all set to exhibit a very organic and real boom in the eCommerce space in the next 5-7 years.
Tier-II and Tier-III cities will propel this boom, ably supported by public policy and private investment to fuel the adoption of the internet, smartphones, and digital wallets. PwC’s report, ‘Propelling India towards global leadership in eCommerce,’ highlights that the Indian eCommerce market will exceed 100 billion USD by 2022.
That is huge!
‘Retail & E-commerce. Shaping New India’s Economy’, a report by Invest India, National Investment Promotion and Facilitation Agency illustrates that by 2025, internet penetration is likely to reach 55% or more of the entire population of the sub-continent. And the number of online shoppers is estimated to multiply from the current 15% to 50% of the online population by 2026.
Interestingly, this next set of eCommerce users in India, coming from the semi-urban and rural societies, will be very different from those today.
With newfound purchasing power and generations of unmet aspirations, coupled with attractive avenues for consuming glocal products and services, today’s business assumptions, strategies, and technology will not suffice in the fast arriving tomorrow.
Paradigms will break.
Stereotypes will shatter.
And newer opportunities will manifest themselves in manifold ways.
Retailers in India and abroad, looking to co-write this Indian growth story will need to be mindful of various ecommerce solutions along with the softer aspects of this new Indian online shopper.
We’ll also take a more in-depth look at everything from demographic changes to the social-economic impact of the COVID pandemic.
…and, of course, the not-so-silently spreading digital footprint in this multi-lingual, multi-ethnic, multi-cultural phenomenon that we call Bharat.
Factors Spurring India’s Ecommerce Growth Story
Young and ambitious
By 2030, India will have nearly ninety million (90 million) new households headed by millennials. And, with a median age of thirty-one (31) years, India will remain one of the youngest nations in the world. This demographic dividend will not only provide a healthy and dependable workforce to the manufacturing and service sectors but also set in motion the network effect from faster and more widespread technology usage and innovation.
Online via Smartphones
By 2021, India will likely have more internet users (846 million) than the entire population of ‘six G7’ countries. Roughly 80% of these users will be on mobile. The ‘Digital India’ thrust by the government, and the success-in-making of Jio’s affordable smartphone and incoming 5G revolution, are achieving just that. It is only evident that these ‘late adopters’ and the ‘late majority’ will look for novel ways to get things done at their fingertips.
The COVID effect
Almost overnight, more Indians than ever before have started buying day-to-day essentials and non-essentials online, triggered by the fear of catching the COVID infection in crowded public places, even the neighborhood stores. This dramatic attitudinal shift is likely to continue and become the status quo post the pandemic as well. As parts of India open up their economy and relax the lockdown, more and more Indians will shop online, discarding decades of inertia in months or even weeks!
Have money will spend
By 2022, the Indian middle class (with annual income between 7.5k-37k USD) will be the largest segment of the population. The new entrants into the consuming class will also include rural India, where per capita consumption will grow by 4.3 times compared to 3.5 times for urban Indians. Thus, easy access to basic amenities and high disposable income will increase their’ ability’ to purchase products and services hitherto unexperienced by them.
How Brands Can Stay Ready for the Next Wave of E-commerce in India
With roughly 40% of the population estimated to be unexposed to the internet by 2022, India has a lot of headroom for eCommerce growth, but not without some challenges.
For instance, the new eCommerce regulation policy which was redrafted, but put on hold, given the COVID situation.
Corollary to this is the Personal Data Protection Bill, which proposes to localize data storage.
These policies, coupled with the general economic slowdown, create a ‘not-so-straight’ way forward for the eCommerce sector in India.
Hence, we have put together some strategies in the eCommerce space, which will help you secure your market presence and dynamically adapt to the changing equations:
The upcoming big Indian eCommerce blast will be ‘social commerce.’ Success stories from giants like Facebook and Instagram and start-ups like Mall91 and Meesho have set the stage. Embracing social commerce – with video selling, chatbots, and group shopping for discounts – will help sustain in the new normal.
Personalized communication is to eCommerce what face-to-face interaction is to brick-and-mortar. Capturing data will be necessary to link disconnected bits of information (across devices and omnichannel) into a coherent consumer understanding – unique for each individual.
The new e-shoppers will prefer simple conversations to website interfaces. With more app installs for WhatsApp than for Amazon or Flipkart, semi-urban India is already well primed for something like ‘WhatsApp for Business,’ or simply referred to as WhatsApp Commerce which facilitates catalogs, customer engagement, checkout, and payments, all via chat.
Consumers will shop on different devices, from different locations, online and offline. Tying it all together will be extremely important to identify, analyze, and influence purchases. eCommerce players will need to use cross-channel integration platforms like Customer Data Platforms (CDPs) to unify data across email, mobile, digital wallets and in-store POS systems.
Artificial Intelligence (AI) and Augmented Reality (AR)
Adopting AI and AR will remove various eCommerce limitations. AI will enable chatbot based commerce over apps like Facebook Messenger, using Natural Language Processing; AR will digitize the brick-and-mortar experience for enhanced sensorial appeal and seamless data capture.
Getting your own website ‘eCommerce ready’ by investing in ecommerce platforms will be necessary. It will help reduce dependency on marketplaces like Amazon and Flipkart to enable transactions. You will not only increase your bottom-line but also get complete ownership of your shopper conversion cycle and access to rich consumer data.
To bridge the app-browser divide and integrate mobile in their digital strategy from the very first steps, eCommerce brands can utilize Progressive Web Apps to offer app-like experience and even send push notifications via mobile browsers. This will be critical for a country like India where the majority of smartphone users own a mid-segment device which has limitations in terms of memory and storage.
Last Mile Deliveries
Amazon’s drone-based delivery and DMart’s ‘Pick up Points’ are both inspired by the need for on-time, hassle-free product delivery. Similarly, brands may need to automate their logistics and partner with hyper-local courier services to walk that extra mile for every consumer.
To sum it all up, we would like to conclude with this thought: When the bad times are over, good times will come. Prepare yourself, enhance your capabilities!