From fashion to pharmaceuticals the e-commerce sector in India has completely changed the shopping experience of millions and kickstarted the era of online shopping experience from finger tips to doorstep delivery. After a set of Agricultural, industrial and technological revolution that framed the structural background of Indian economy, the e-commerce sector can be well defined as the revolutionary innovation of 21st century which is growing at a very fast and rapid rate in India. During the period of 2000s, the e-commerce sector was not that popular in India but after 2010 the sector has gained momentum. By 2014 it developed to a great extent where even the giant international players like Amazon and Google stepped into the picture. Now, this sector has evolved as one of the most promising sector with international and domestic players having stiff, edge-to-edge competition thus benefiting the economy with wide variety of choices for consumers along with increased employment opportunity and growth.
The development and growth of e-commerce sector in India can be attributed to increased trade liberalization and digitalization that took place during the late 20th and early 21st century. With more technological start-ups popping up coupled with deep penetration of smart phones with a strong youth base, the climate in India is very much favorable for the establishment of e-commerce sector. In addition to this, changing lifestyle and consumer preferences, increased internet usage and switching over to more online transactions has further stimulated the strength of e-commerce in India. The policies of NDA government that invited 100% FDI in E-commerce sector attracted great players like Amazon and Google in India. Amazon is presently one of the largest e-commerce firms in India with wide ranging products. Google has its own trademark and unique position when it comes to networking services and transaction. At the same time various Indian companies like Paytm, Rediff, Flipkart and many others have also risen to the level of international competitiveness and standards. About 70% of the e-commerce industry is constituted by e-travels. The average revenue from this industry is estimated to increase from US$38 million in 2016 to US$120 million in 2020.
Economically, the e-commerce sector has given a boost to the economy. The use of internet facilitated by doorstep delivery, free shipment, easy return, guaranteed products and cash on delivery has successfully attracted customers for these online services. The government policies of providing data packs or wifi services at a cheaper rate and various other provisions of digital India scheme is another important move in this aspect. Online shopping has provided immense opportunities for the consumers in terms of choices and quality products at a cheaper rate through competitions. Today starting from clothing, accessories, and electronic devices to pharmaceuticals, real estate, groceries to food delivery, the dimensions of e-commerce has highly expanded. E-commerce has also emerged as a suitable alternative to the busy schedule of urban life.
Even in the rural areas, e-commerce and online services has successfully earmarked its presence. The number of mobile users as well as online shoppers has gone above the number of people who have qualified primary education. E-commerce has also provided a strong platform for many small and medium enterprises as the initial cost for this endeavor is comparatively less. The success of an e-commerce firm is in the ability of the firm to have contacts with established companies that provide various products and services and in co-coordinating the same so as to provide these services at a discounted rate.
Also, advertisements have an important role to play. E-commerce has been quite successful in bringing in more transparency to the transactions and has resulted in proper accounting of the transactions. An increased competition from the international players is thus benefiting the consumers and also provides an incentive for the domestic players to improve their performance. Above all, India with its 133 crore population serves as huge market for the sector thus opening up doors of huge investments and production. This has also contributed towards the development of technological base and logistics, resulting in improved connectivity thereby reducing the transaction cost.
Despite the huge possibilities that this sector creates, it also has strong challenges to outperform. The Indian market is dominated by international e-commerce giants and they are undisputed champions in terms of quality and choices. These serve as a direct threat to domestic players and the Indian companies have to move far ahead to regain the market power. Though the schemes and policies provide provision for cheap data packs, the intensity of penetration is low. The infrastructural set up has to be of more standards followed by better logistics and connectivity. India is thus one of the fast growing hubs of e-commerce right behind China and it is quite evident that the transformation enabled by this sector will boost the economy not only in terms of GDP contribution but also in terms of growth and innovation. But the speed and success of this sector in supporting the Indian economy and national market depends upon the ability of the absorption power of the market so as to convert and direct this fast growing sector towards the positive growth of our players and economy.
Picture Credits : photozone