The Indian eCommerce industry is experiencing massive growth. The online commerce market grew at 41%, the fastest among emerging nations. Current online penetration is close to 10% of population. Interestingly India has an almost gender neutral penetration of internet with 40% online usage among women. 75% of internet usage is from the 15-34 years category. This makes India as one of the youngest online user community. The age group of 15-24 years is the fastest growing segment within the demographic spread. This bodes well for online commerce in the years to come. Online retail currently is at 60% penetration of online shoppers.
The first wave of Indian eCommerce industry has seen some early adopters such as Flipkart, Myntra, Jabong, Homeshop18, etc gain significant marketshare (several million users per month) over the past year. Flipkart has registered manifold increase in traffic volumes putting it at the top of Indian eCommerce players. To lend further credence to the growing stature of eCommerce, the past few years saw significant funding in the eCommerce space for startups.
The second wave will primarily be focused on the following four key aspects;
· Early adopters driving a larger share of the customer’s wallet with greater insight – due to pricing and acquisition strategies, there is high churn in customer loyalty and eTailers are feeling the pinch. The next wave will see a greater cross-pollination between customer insight, marketing and merchandizing strategies.
· Modernizing supply chain infrastructure to drive greater efficiencies and customer experience – this is especially tricky mix given the varying maturity levels of fulfillment options and payment mechanisms.
· Rapidly changing shopping behavior and needs – players such as Amazon (still the top site visited from India) and international multi-brand etailers will provide an enhanced customer experience that will raise the bar for Indian etailers to match. This coupled with low cost data plans and smartphones will pave the way for digital omni channel retailing.
Omnichannel retailing in India will begin to gain prominence during the second wave of eCommerce- usage of mobile, tablets, eCommerce and stores within the overall shopping experience will gain significance. “Indianized” channels such as “digital bazaars” in the rural areas will start to make their appearance.
This will require retailers to adopt an eCommerce platform that is;
1. Adaptive to change – to keep up with rapid and sustained change, etailers will need to implement tools, processes and techniques that allow them to respond faster. Given the state of the industry it is critical for retailers to not embark on multi-year implementation journeys while the ground shifts beneath their feet.
2. Can support differentiating shopping experiences – first wave etailers have primarily cloned experiences from the west playing a part in dipping conversion ratios. It is important for retailers to understand the psyche of the varied Indian consumer segment and offer experiences that cater to their needs. Limeroad.com is a site that has created a unique experience based on its target segment.
3. Can be deployed without breaking the bank – current diversity in infrastructure, internet demography and state of technology necessitates an evolutionary approach to etailing that is based on targeted geographies. Unlike the western world, etailers will not be able to create big bang eCommerce systems but will need to make smaller and incremental bets.
4. Can provide the right level of customer insights to continually improve operations – as etailing reaches critical mass, it is imperative for etailers to understand their customer segment and their purchasing behavior. With dwindling customer loyalty, solutions that allow the etailer to merchandize and market to their customers in a personalized manner assumes greater significance.
Most retailers across the globe have tended to copy US retailers while adopting cross channel retailing practices. Successful retailers have consistently proven that their ability to leverage certain best practices while adapting experiences for the local market (eg. Tesco in South Korea) is a key ingredient. It is also important to understand some of the shortcomings of the structures put in place in the western world where online has been treated as its own channel and is treated separately from stores. This has led to siloed and redundant process, technologies that have hindered the retailer’s ability to truly offer an omni channel experience. It is also key for retailers starting out on their omni-channel journey to understand the eight pillars/foundational elements that guide consistency of interaction across channels. It is this solid base that allows retailers to leverage the inherent capability of each channel/medium of interaction while ensuring information and experience consistency.
(Sathiyanarayanan Vijayaraghavan has over 16 years of experience in IT and is the global Retail vertical head for ThoughtWorks. Over the past decade, he has worked with Top 50 retailers across the US, Europe and India aligning IT with digital business needs and executing transformational initiatives. He has several publications in international journals to his credit.)
Meet Sat Vijayaraghavan at Internet Retail Expo 2013
Category : Ecommerce