The e-commerce industry was in its infancy for the larger part
of the previous decade. However, in last three years, the industry has witnessed
an incredible growth of 150%, increasing from $3.8 billion (INR 19,249 crore) in 2009 to $9.5
billion (INR 47,349 crore) in 2012.
A
number of business models for e-commerce have evolved and are in varying stages
of maturity. Of the various business models that are prevalent, consumer e-commerce
is perceived to have a wider and stronger impact on retail or direct consumer
and has engaged entrepreneurs, VCs/ PEs and others. It is expected to grow by
33% in the year 2013. As India moves towards becoming a consumption driven
economy, this consumer centric model presents a very large and transformative opportunity.
Various demand and supply driven factors aided by dynamics
in external (government/ regulatory) environment are supporting the growth of
the industry. Favourable demographics, increasing number of urban households, growing
internet penetration in smaller towns and rural areas, proliferation of mobile
devices and emerging need for convenience, choice and access are acting as
prime movers from the demand side.
The e-commerce and allied companies have
also turbo-charged the e-commerce growth engine by introducing innovative
business models, by offering convenient payment options and by introducing technological
innovations and customer friendly policies to capture online time and wallet share.
Concepts such as flash sales, ‘by invite only’ sales, India ‘Cyber Monday’ or the
‘Great Online Shopping Festival’ have been smashing hits in the past and such
innovations will continue to play an important role to promote online shopping.
These tactics, in addition to the existing sales, coupons and deals are welcome
by the Indian customer.
The government and regulatory bodies are also playing their
part by investing in infrastructure and policy support. These bodies have also
initiated awareness drives to get wider users (including SMEs/ MSMEs) on to the
e-commerce bandwagon.
The e-commerce industry offers great benefits to the Indian
economy, the customers and the society at large, especially to small
businesses, small merchants, semi urban and rural population. In recent years,
the growth of the global e-commerce market has made cross-border transactions
an intensifying force in India’s foreign trade, offering millions of enterprises,
most of which are SMEs/ MSMEs, to expand beyond the domestic market.
Over 30,000
sellers sell on eBay India annually to 4 million consumers in 3,311 Indian
cities. Over 15,000 sellers export a variety of Indian handcrafted products to
112 million customers in over 190 countries. It must be noted that this is just
the tip of the iceberg.
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