The e-commerce landscape in India is evolving rapidly. According to a report by Forrester, the e-commerce industry in India is set to grow the fastest within the Asia-Pacific Region at a Compound Annual Growth Rate (CAGR) of over 57% during 2012-16. This statistic is well reflected by the invasion of e-commerce sites on prime-time television slots. Ebay, the grand daddy of e-commerce in the country, was the first to promote itself among offline customers, followed by a poor campaign from Snapdeal, and then by Flipkart; which has led every other e-commerce site to take the television way.
The Indian consumer was quite skeptical about making online transactions initially, but times have changed. Urban Indian consumers are now confident enough to make online purchases of up to Rs 25,000, from Rs 2,000- 5,000 in the recent past, according to a report by First Data Corporation and ICICI Merchant Services. The added advantage for the e-commerce startups has been the low-cost internet services provided by the telecom industry and the rollout of Net Banking by all major banks, coupled with the cash-on-delivery model, employed by most e-commerce sites.
Whether you want to place an order for a novel, book your travel tickets, rent a car or get movie tickets, you can now do so from the comfort of your home. Surprisingly, the website that we curse the most today is also the most successful e-commerce website in India, according to me. I am talking about our very own IRCTC, which has revolutionized Railway Tickets booking. Though, the service provided by IRCTC isn’t worth praising, there are some others who have made the lives of the urban India much better – Ebay.in, RedBus.in, BookMyShow, MakeMyTrip, Flipkart, Myntra and SnapDeal. The industry has gotten even a larger boost when Amazon started its operations in India earlier this year.
Standing in 2012, due the success of Indian startups like Flipkart and MakeMyTrip, we have seen scores of e-commerce sites cropping like mushrooms from across the country. The 2012 batch of e-commerce companies remind me of the 2000 batch of Internet wannabes who jumped on the bandwagon just to be “in the Internet business.” These startups neither have a proper business model nor an efficient delivery system, or even an effective customer support system. But there is something all of them offer unanimously – prizes and discounts. To acquire new customers, the 2012 e-commerce players are discounting regular stuff or throwing in gifts, and flushing profits down the drain. This gives them short term glory, but lack of revenue forces them to close down prematurely.
The Indian e-commerce industry is still in a nascent stage and yet to streamline the systems and processes driving the industry. There may be shutdowns such as Taggle and VogueMagnetor, sellouts like LetsBuy and mishaps of the SoSasta kind, but these do not imply the industry will progress in a negative direction. While the smaller imitators close shop, the bigger players garner new customers, who have now got a taste for online shopping.
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