Cash Crunch – Curse Or Boon For eCommerce?


This guest column is authored by Bhavik Sarkhedi, Founder, Write Right

eCommerce is thriving worldwide however it is as yet confronting hindrances in inclining up in India. India’s eCommerce market was worth about $3.9 billion in 2009, and is relied upon to cross 100 million check by end of year 2016. As per a review led by the Internet and Mobile Association of India, the online business segment is evaluated to achieve Rs. 211,005 crore by December 2016. Indian internet business market is set to overwhelm the US and turn into the second biggest on the planet in under two decades, clashing with China for the numero uno position, as per a report by worldwide payment firm Worldpay. The report said the eCommerce market is required to develop exponentially with developing markets driving the charge –particularly India, where the portion is anticipated to develop by 28 for each penny for every year from 2016 to 2020, to create $100 billion online retail income out of which $35 billion will be through design internet business.

Online attire deals are set to grow four circumstances in coming years. Despite the fact that eCommerce division has seen gigantic development and is relied upon to develop, numerous eCommerce ventures have confronted huge weight to guarantee money streams. In any case, it has not worked out for all the online business sites. Huge numbers of them like Dhingana,, Seventy MM among others needed to shut down or change their plans of action to survive.

As indicated by Worldpay projections, India will be the world’s second biggest eCommerce showcase by 2034, because of gigantic surges in web entrance, a swelling millennial populace and the rising take-up of Smartphones.

But the sudden bold move of demonetizing the two high value currency tenders has shaken online eCommerce giants. Top internet business firms, driven by Flipkart and Amazon India, have started to essentially reduce the offline payments by giving incentives on online payments.

Throughout the week post the announcement last month, Flipkart and Amazon India started passing out rebates of no less than half, even as they pushed customers towards more cashless exchanges. Amazon India is giving out level discounts of 40-70% in its significant apparel class, where it contends with Flipkart and Myntra. Equal Flipkart is putting forth discounts of 40-80% in a large portion of its key classes, while Flipkart-claimed design retailer Myntra offered rebates of up to 70%.

Throughout the following months, Flipkart will dispatch deal occasions to draw in customers, a large portion of whom have shied far from internet shopping after the web based business firms pulled back the money down (CoD) choice, organization officials said.

As indicated by research and counselling firm Red Seer Management, around 70% of the general online business transactions originate from towns and littler urban communities, and are paid for in real money.

Until October, India’s internet business industry had seen a stressing drop after Snapdeal and to a lesser degree, Flipkart, were compelled to cut promoting and rebates on account of a money crunch. In October, Flipkart ricocheted back and, alongside Amazon India, posted record numbers. In any case, demonetization has hit that recuperation. Organization administrators expect online business will just come back to regularity sometime in the following quarter.

Flipkart started dispatching deal occasions beginning one week since then. Specialists following online business said that while the move to pass out heftier rebates and hold more deal occasions is probably going to help deals in the short term, it will hurt edges promote, particularly after the October sale season, when organizations relinquished edges for piece of the overall industry.

Specialists said that while organizations are scrambling to guarantee more advanced and online exchanges, a large portion of them are still ill-equipped and not well prepared to handle the expanded volume of online requests and are probably going to battle to finish arranges throughout the following weeks and months.

Amazon India said that it didn’t plan to hold a particular deal occasion following the announcement, however it will keep on handing out different advantages to clients, including that it had likewise reintroduced CoD payments. Web based business organizations are additionally increase their framework to handle more card-on-conveyance exchanges and are sending more point-of-sale (PoS) machines, an industry insider said.

Likewise, given the high enthusiasm from banks and different brands, to team up and give cash back/rebates to online shoppers, retailers have been running different offers on numerous payment instruments like wallets and gift cards. Making it convenient for customers and increasing cashless transactions.

With already persisting hurdles in form of excessive goods return, scepticism about e-payments, low smartphone user base, inaccessible towns in India, overfunded competitors increases the cost of customer acquisition etc. A new hurdle in form of demonetisation has given a severe jolt to the industry.

Now what remains to see is this hurdle in the way of progressing eCommerce industry creates new threats to the industry or opens up new opportunity.

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