Accelerated by the Covid–19 pandemic, the Indian e-commerce industry is set to grow $111 billion by 2024 from $60 billion in 2021. This means the value of the industry could reach $40 billion by 2030. The reason is quite evident since e-commerce is widely becoming an integral part of retail, the emerging trends that have been driving the industry from the last couple of years, such as Hyper-Personalization, D2C & Sustainability, and Green Consumerism to name a few, will continue to shape the future of e-commerce industry. Therefore, the Indian e-commerce market could clock a growth rate of $111.40 billion by 2025 from $46.2 billion in 2020. The fodder behind this growth can be increased internet and smartphone usage. As per the drive-by Digital India Program, the number of internet users in India has increased to 784.59 million. Out of total internet connections, 61 percent are from urban areas, of which 97 percent connections are wireless.
The two yesteryears alone have accelerated the e-commerce industry by a decade, revolutionizing the way the brands operate, grow and run their business, as well as how the consumers choose to shop and pay. The growth trajectory of ecommerce platforms of India testifies how customers increasingly recognize the importance of shopping within closed doors. After seeing the tremendous increase in the number of customers in the initial stages of the pandemic, more sellers opted for digital platforms.
According to IBEF, the Indian E-commerce industry has been on an upward growth route and is expected to beat the US to become the second-largest e-commerce market in the world by 2034. The Indian e-commerce sector is graceful to reach $99 billion by 2024 from $30 billion in 2019, expanding at a 27 percent CAGR, with grocery and fashion are likely to be the key drivers of incremental growth.
Hyper-Personalization to Engage with Customers
Personalization goes beyond addressing the customers’ names. The demands for personalization by customers are increasing gradually, and for e-Commerce Companies, it is found norm. Personalization helps to target customers with the right message and experience. This increases the chances of conversions and maximizes the seller’s revenue. Several brands promote the next level of personalization where the customers get the options to pick and choose the contents of an order. In spite, a gifting personalization layer is available for the brand as well. There is an emerging trend of using digital personalization technologies to enhance the user experience while buying products from e-commerce.
Direct to Customers (D2C)
With the increase in the number of first-time users getting online to meet the shopping requirements, brands and companies certainly need to have their presence online either through marketplace listing or the more profitable D2C channel. Unlike the traditional retail competitors, D2C brands can experiment with distribution models from shipping directly to customers to partnering with physical retailers to open pop-up shops.
Sustainability and Green Consumerism
At present, the active promotion of ethically and sustainably made things has become a priority for businesses, and it is considered the primary initiative to protect the environment. Many small-medium brands are following the carbon-free footprints and spreading green consumerism. In e-Commerce, this translates to reducing plastic waste in packaging, using more sustainable packaging materials, and leveraging natural ingredients to make products.
Chatbots Driving E-commerce
Chatbots immensely improved the consumer experience. More than 60 percent of customers opt for Chatbots to customer support inquiries. It’s no wonder e-Commerce platforms opt for Chatbots to improve customer services, provide faster and more accurate responses, and collect data so that they can provide better service next time.
Dark Stores as Business Models
A dark store is a distribution center that caters exclusively to online shopping. Brands can save costs on multiple retail outlets, which provide a fully branded experience to customers who walk into the stores. With a centralized location, the manhours of the staff can be put to better use, engaging with customers with higher buying intent and managing supply chain and fulfillment. Many brands use these dark stores for filming virtual shopping video content.
5G to Trigger the Explosion on Live Shopping and Video Commerce
It has already been a decade since India received 4G, and the adoption of the technology is swift. According to Nokia’s India Mobile Broadband Index, in the five years between 2015 to 2020, 4G users have grown to over 700 million users. Out of this, 46 percent access e-tail and e-B2B through their devices, while 54 percent use them for social media, YouTube, and OTT video. India will begin rolling out a new, superfast 5G network this year. At present, Indians spend approximately five hours on smartphones every day, beating even China, and short videos are becoming the fastest-growing format. Live video Shopping is going to become one of the most exciting ways to shop.
Virtual Clienteling to Drive as Ground Customer Service
One of the biggest challenges in e-commerce is turning first-time users into lifelong customers. By providing virtual clienteling through WhatsApp, SMS, email, video call, and more, a brand can develop an affinity with the customer that lasts beyond the initial purchase. In the last few years, the retail industry learned that ecommerce could bring in revenue even when lockdowns and restrictions on movement impacted brick-and-mortar stores. By building a strong virtual shopping experience, brands can remain agile at all times.
The government formed Digital India, Make in India, Start-up India, Skill India, and Innovation Fund to support the growth of e-commerce in the country. In order to increase the participation of foreign players in the e-Commerce field, the government hiked the limit of foreign direct investment (FDI) in the e-Commerce marketplace model up to 100 percent. Furthermore, the allowance in the FDI is permitted only for the business-to-business (B2B) sector.
The government of India formed “Government e-Marketplace” (GeM) through the department of Directorate General Supply and Disposal (DGS&D) for government purchase. As of November last year, the GeM portal served 7.96 orders worth 152,315 crores to 55,433 buyers from 3.06 million registered sellers and service providers.