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3 Factors that Contribute To Ecommerce Growth In India
3 Factors that Contribute To Ecommerce Growth In India
By: Bikram K Singh

Flipkart, Yebhi, Jabong and myriad of small and big online shopping destinations have been posing threat for giants like eBay and indiatimes Shopping, which had seen better days. In fact, Flipkart and Yebhi are not just the challenger brands in online retail category, but they are at the top with eBay, and perhaps Flipkart has an edge over rest of the others.

Started by two IITians, Sachin and Binay, Flipkart growth’s industry is synonymous with the revival of online retailing in India. Thanks to their amazing customer service and timely delivery, the company clocks around more than Rs.100 Crore in sales every month, and it serves 17 orders per minute averaging to 25,000 orders and 45,000 shipments per day. It has a team of more than 4,500 people, as per the Business Today February ’12 report.

Flipkart’s growth along with growth stories of Yebhi and Jabong brings back the question of what is fueling this growth? And when talking of it, let’s not forget the mammoth presence of eBay and Indiatimes. As per the June 30, 2012, eBay India fact sheet, eBay has 4 million registered users from 3,311 cities in India. It has 6 million live listings in across 2,000 categories at any given time. The following image will help you get some idea about the size of eBay’s presence in the Indian market.

Connected to high-speed Internet on mobile

High-speed connectivity had been a major roadblock stopping online retailing from going hard on the acceleration pedal. But lately this has changed and particularly because of sudden push in the Internet penetration because of growing use of smartphone and tablet devices.

In a survey conducted by eBay in the last week of May 2012, it was found that as many as 94% of Indian smartphone users access the Internet from their mobile, and 64% of them have upgraded to 3G. Of all the respondents, 80% said that they are always online.

Free shipping, multiple payment options, CoD and EMI

As per the Business Today Article Dated May 21, 2012, 20% Indians did not went online for shopping for the shipping cost was too high, and 10% didn’t have access to credit or debit card.

This has changed a little, but what have caused the sudden rise in online shopping are availability of free shipping option with all the major online retailers as well as availability of multiple payment options.

Now all major retailers allow buyers to shop using credit or debit card as well as net banking. Along with these they have included two major payment tools, which have propelled the growth.

These are: Cash on Delivery (CoD) in major cities and interest-free EMI on purchase of products through credit cards. This has removed the hurdle of not having credit or debit card and interest-free EMI option on major credit cards has made even expensive product accessible for people.

Try and Buy

One of the major roadblock in selling cloths, shoes, and other lifestyle products online was fitting of the product bought. By removing this hurdle companies like Yebhi has crushed the barrier which has made traditional retail look more convenient.

Now buying lifestyle products has also become easy because of “Try and Buy” feature offered by online retailers in major cities in India.

These three factors when clubbed with attractive pricing, discount coupons, and quick delivery have propelled online retail industry on a trajectory which will push it out of 1-2% zone it is stuck into, in terms of its share of the whole retail industry in India.