E-Commerce catches the Viral Fever !!



In the four decades since its inception, the Internet has driven dramatic change. It has
enabled flows of information, including entertainment, news, and financial and academic
material. It has brought people closer together by enabling various forms of interpersonal
communication, notably e‑mail, instant messaging, video conferencing, and social
networking.


India has an avid internet user base of about 137 million as of June 2012. The Onset of E-Commerce is low compared to markets like the United States but is growing at a much faster rate with large number of newbies.
India's e-commerce market grew at a staggering 88 per cent in 2013 to $16 billion, riding on booming online retail trends and defying slower economic growth.
[Source: Wikipedia]

But, the growth of E-Commerce industry in India is not only because of any such standalone reason. There are various key drivers that have helped the E-Commerce to eliminate the barriers for setting up the Industry and elevating growth.

  • Increasing Broadband internet and 3G penetration 
  • Rising Standard of Living and upwardly mobile middle class with higher disposable income 
  • Busy Lifestyles and lack of time for offline shopping 
  • Availability of much wider product range 
Above all, the most essential reason behind E-Commerce's success in India is undoubtedly the "Cash On Delivery" (COD) service. A detailed study revealed that the figures of credit card holders in India are low but the fact that the value of banknotes and coins in circulation in India being higher in comparison to other countries is what that led to the commencement of COD in India as the primary method of Payment. 


Why COD holds much significance in India ?
  • Low credit-card penetration in India
  • Black money culture
  • Privacy and security concerns of using cards online
  • Desire to touch and feel a product before paying for it
  • Builds trust for new companies

The above mentioned facts sum it all about COD's significance but it should be remembered at all times that everything has its Pros & Cons. Yes you read that right, even COD Service has its pitfalls which makes it more challenging for the E-Commerce companies to survive in this dynamic environment and maintain an edge in the market.

It can worsen the situation for a Seller if buyer returns a product. Added to this is the time frame of 10 days which generally takes place for a product to be shipped to a customer and then back to the company if not purchased. It results in losses as the product gets blocked in the Transit. Reports say that the return rates in online shopping in India averages at a soaring 40 percent. And, the management of working capital and cash handling at the time of delivery are some of the issues which need to be overlooked in much detail. 

Probably the end of COD culture would signal the evolved maturity of Indian consumers. And prior to this we may get to see a lot many players stumbling off the race, into oblivion. But yes, the pitch is getting Feverish and the Viral flu is penetrating B & C tier Cities. 

This shows that E-Commerce is accepted by Indians and definitely has the potential to grow into a $50 Bn industry in the next 5 years.







4:38 AM | Category: | 0 comments

Comments (0)

Post a Comment