eCommerce has become one of the undisputed mainstays of the Indian economy – the sector is poised to grow at a 41% CAGR over FY’15-’18, according to a recent Goldman Sachs report. Our sense is that within a decade, India’s consumption GDP will be $2.5 trillion, of which, 10% will be online and eCommerce will play a definitive role in addressing this $250 billion consumption gap.
Starting in 2016, the Indian eCommerce sector will need to recalibrate its focus on a long-term vision to ensure consumer delight, business scalability through reliability and frictionlessness and profitability. Businesses will have to ensure bringing in innovative consumer-centric solutions to provide an enhanced experience for all stakeholders. In the process of laying the roadmap to create the most impactful digital commerce ecosystem, there are four focus areas which will require special attention – Digital payments, O2O & Omnichannel, Vernacular interfaces, and predictive analysis.
There are four areas that will command special attention – Digital Payments, Omnichannel, Vernacular Interfaces and Predictive Analysis.
Digital Payments Creating Value Added Transaction Experiences
From card on delivery to greater adoption of digital wallets, payment has become an active playground for eCommerce players to ensure value added transaction experiences. Focusing on improving customer experience, 2016 will see introduction of more efficient digital payments solutions. One impact of this will be on the financial supply chain and refunds mechanism. Banks are already assisting in building this through IMPS transactions that allow bulk refunds to be processed faster, even allowing under one hour refunds in certain cases. In 2016, faster cash transaction solutions will be developed for sellers and merchants as well. For instance, banks can collaborate with eCommerce logistics partners to strengthen financial supply chain. This will allow faster collection and entry of cash in the banking system as well as efficient technology integration for its early disbursal to marketplaces, and thereby the seller community.
At the same time, forecasts that suggest the mobile wallet market in India are expected to reach $6.6 billion by 2020 (India Mobile Wallet Market Forecast and Opportunities, 2020) indicate greater adoption of wallets as a simplified and secure digital payment option. With various payment solutions such as HCE (Host Card Emulation), NFC (Near Field Communication), BLE (Bluetooth Low Energy) and QR (Quick Response) code, digital wallets have already created value through single touch and secure payment solutions, cash back deals, among others. The future is in solutions like ‘On the go Pin’ which are not only compliant with RBI’s two-factor authentication mandate, but also faster and safer than existing technologies like MPIN, by-passing the need for OTP in online and offline commerce.
O2O and Omni channel: Fostering integrated commerce experiences
Retailers and marketplaces are increasingly recognizing the need to reach on-the-move customers through multiple entry points – on web, app and in- store – as consumption patterns evolve. A robust omni-channel program will help eCommerce players integrate in-store and online product discovery and delivery, creating value and loyalty in customers. A significant number of consumers in India still prefer the touch and feel aspect of offline commerce. Online to offline commerce is in a unique position to cater to diverse consumer demands and buying behaviors. Since technology is such an integral part of an intuitive O2O experience, marketplaces can start by focusing on data integration and pre-emptive analysis to deliver differentiated experiences at unique points of access.
In fact, a series of strategic engagements that go into building successful models of hyper-local delivery, Click and Collect commerce and service assistance will be designed on a strong foundation of simplified technology solutions. Examples of these engagements are already being seen in categories like Automobiles, Apparel and Real Estate. With more brands accepting the need, we will see an increase in cases of omni-channel outreach.
Recognizing value in Vernacular
With the rapid growth of eCommerce businesses, the sector will have to start looking at the untapped segments of Indian population to increase market share. According to an IAMAI (Internet and Mobile Association of India) report, out of India’s 259 million internet user base, 127 million internet users from the Tier 2 and 3 geographies are yet to come online due to the language barrier.
Yet the consumption needs for this pool are as diverse and as strong as their English-speaking counterparts. This creates potential to open up the eCommerce industry to an untapped market – estimated to be more than 100 million internet users. The next growth area, we feel, will be in developing language-based interface solutions, back-end support and customer engagement teams to create an experience unique to vernacular audiences. Recognizing the potential, Snapdeal became the first eCommerce marketplace to launch a UI in 11 regional languages. This is only expected to drive trends in eCommerce, bringing the remotest areas in the country under financial inclusion through digital wallets. A cashless economy can very well be the future.
Innovation will ride on simplification and predictability
A worthwhile commerce experience is dependent on ease of discovery, purchase and delivery. Placing the customer at the centre will allow for blending various aspects of user experiences across multiple platforms, channels and apps – a ‘string of pearls’ impact. This is both a reflection of, and an impetus to, the way eCommerce engagements will develop as the sector matures. One aspect of this is the experience of a customer when he engages with a brand or platform. The intuitiveness of an interface is the first stage at which impactful interactions can happen with customers. The spate of innovations like more efficient product discovery, greater integration of social platforms to mimic peer-influenced purchase decisions, replication of offline browsing experiences are all steps in the direction to make a great first impact. Now, an important focus area for eCommerce marketplaces will be real-time addressing of consumer pain-points which predominantly rest on lack of trust and inconvenience. On the technology front, this can be delivered through solutions like pre-emptive and stringent product quality checks that will enable better addressing of fraud.
Deploying Big Data insights and Predictive Analysis have been key factors in how eCommerce players have strengthened customer engagements. In fact product recommendations to customers and business solutions for sellers have relied on recognizing insightful patterns in consumer preferences. Yet the scope of data analysis is grossly under-tapped, especially in context of process management. eCommerce businesses in 2016 will engage more strongly with the Data Analytics to manage their back-end solutions. If we observe the ecosystem today, logistics partners and marketplaces have begun driving better process by more efficient tracking of products; predicting demand surges, especially on high online-traffic days and also smartly managing bottlenecks in assembling and delivery.
Online commerce is set to reach greater heights because of the significant investments that are going into strengthening its supporting ecosystem. Businesses that will work towards transforming various elements of the value chain will enable the establishment of a sustainable eCommerce sector. Hence, factors like digital payments, O2O commerce and pre-emptive and simplified technology innovations will drive value for customers and sellers alike. As the sector evolves, focused executions to transact and engage in vernacular, will help shift a further chunk of retail transactions online. Digital commerce is poised to create further disruption in the Indian market landscape, and these developments will eventually play a critical role in strengthening the economic growth of the country.
Disclaimer: This is an influencer post. The statements, opinions and data contained in these publications are solely those of the individual authors and not of iamwire and the editor(s). It was originally published on LinkedIn.