Today, the market place is flooded with several e-commerce options for shoppers to choose from. A variety of innovative products and services are being offered spoiling customers for choice. Online shopping is no more a privilege enjoyed by your friends and family living in the US or UK. Today, it is a reality in India. In the last couple of years, the growth of e-commerce industry in India has been phenomenal as more shoppers have started discovering the benefits of using this platform. There is enough scope for online businesses in the future if they understand the Indian shopper’s psyche and cater to their needs.
Changing the game
Indian e-commerce industry has evolved over a period of time with innovations that have changed the rules of the game globally. Cash on delivery (COD) is one such example. In a country where credit card penetration is much lower than other developed markets and where e-commerce companies are still working hard to build trust among shoppers, introducing cash on delivery has been one of the key factors for the success of the segment. At present, COD is the preferred payment mode for close to 55-60% of all online transactions in the fashion and lifestyle segment in India.
COD is here to stay owing to its convenience and its cultural affinity and will be a major part of payment mechanisms for at least the next four to five years. Executing COD efficiently and painlessly for the customer is critical to the success of any e-commerce player in the country.
Besides COD, e-commerce players need to focus on customer experience as a means to build trust and confidence. Customer experience encompasses every interaction a customer has with your service from placing an order to interacting with your customer service team, to the actual delivery experience.
Providing a great delivery experience is one of the core aspects to delighting customers. This doesn’t necessarily mean constantly pushing the frontier on faster deliveries. Being a day behind the fastest in the market isn’t a big deal, but trust, consistency and reliability are more important. The more faith the customer has in your delivery service, the more likely he is to buy again. Delivering a good experience is critical not only to ensure repeat purchase from a customer, but also for building a good brand image and word-of-mouth publicity.
Growing the base
Online shopping has seen a lot of traction in the last 12-18 months. India has almost 130 million online users at present, out of which as many as 10% are engaging in online transactions. The online user base is expected to cross 300 million in the next 2 – 3 years and a larger percentage of people are expected to transact online by 2015. This large base will provide vast scope for e-commerce businesses to establish themselves in India.
Cities beyond metros are in the limelight for all the good reasons. On an average, almost 50 – 55% of our business come from tier 2 and tier 3 cities and I believe this ratio is similar across other ecommerce companies in the country. With metro markets reaching saturation, I believe tier 2 and 3 cities are going to be the biggest drivers for ecommerce businesses in India in the not so distant future. Building a robust supply chain is critical to efficiently fulfilling orders from these cities and tapping their full market potential.
The e-commerce industry is growing at a rapid pace and changing the dynamics of the retail industry. In the coming years, e-commerce is expected to contribute close to 8-10% of the total retail segment in India. This growth is bound to continue provided e-commerce companies focus on innovating, building strong technology infrastructure and delivering the best customer experience.
(Mukesh Bansal founded Myntra.com in February 2007 with a vision of creating India’s largest on-demand personalization portal. Having grown consistently, the company expanded into fashion and lifestyle retailing in December 2010. He has over 14 years of experience in multiple early stage start-ups in Silicon Valley [NexTag, eWanted, Centrata, newScale] where he has held various senior management positions in Product Management, Marketing and Product development.)
Meet Mukesh Bansal at Internet Retail Expo 2013