Impact of e-commerce on Indian Economy by Mr. Sundeep Malhotra, CEO and Founder, Homeshop18
India & the World
Analysts of the virtual commerce industry see China, Indonesia and India poised to lead sales growth in 2014. According to ASSOCHAM’s Online Shopping – Review & Outlook in 2013 survey, India’s E-commerce market witnessed a staggering increase of 85% to $16 billion from about $2.5 billion in 2009. It is expected to touch a whopping $56 billion by 2023, which will be 6.5% of the total Indian retail market. As India is buying from the virtual space, the industry is slowly contributing towards the Indian economy. This has thus, created positive brand equity for Indian digital retailers, with large global financiers queuing up to invest in the new age virtual businesses.
The Growth Story
The ontogeny of the E – commerce segment in India started with the travel sector. Emarketer.com findings show that the travel segment, accounts for more than 70% of the transactions and e-retail’s share stands at approximately 12.5%. Today, the online retail in India, is walking the same path. It has opened doors for established brands, SMEs, as well as, large manufacturers to reach out to customers across India’s wide geographical region. The customer base has increased like never before. Consumers in the metros and emerging markets can now look at more product varieties with minimal physical browsing and equivalent discounts to offline retail.
Apart from this, the economy has got a boost from job creation to this sector. To cater to customer demands, digital players are creating employment opportunities across supply chain, operations, call center, logistics, etc. Warehousing, packaging and shipping play an important role in creating the brand image for the company. It’s all about the product being delivered in the right shape, size and the right time that leads to customer satisfaction and hence, repeat customers. For this, HomeShop18 has developed a robust business model, comprising of strong liaison network with trained courier service providers, product delivery to remote regions, extensive warehousing and 24×7 back-end support to address customer needs at all times.
India Buying
Indians are now confident of shopping online and their share of wallet has increased on purchases made online. HomeShop18, a pioneer of digital commerce has witnessed changes in customer buying habits. Today, expensive products like jewellery (gold, diamonds, semi-precious, fashion jewellery), high-end gadget are bought comfortably along with traditional popular categories like home & kitchen, home décor, apparels & lifestyle. Developing confidence in online payment choices with the availability of other options like COD and EMI schemes, are irrefutable signs of a maturated market.
Vision 2020
Increasing investor faith in the Indian digital commerce industry has led to government initiatives like broadband connectivity across the country for the budding digital commerce sector. The importance given to rural infrastructure will ease pressure and allow quicker movement of goods. Bolstered by factors like increasing brand awareness and simplified access to brand options in spite of physical remoteness, Tier II and III cities are driving e-retail consumer trends. India is a huge market with immense potential for growth and digital-commerce will get stronger and streamlined in the coming years as we see different models work out sustainability challenges.
