A Bihar lad often asked his relatives in Bangalore and New Delhi to gift him books as there were no other option to attain knowledge as the local stores in Bihar did not had such books.
It was all before six years when this Bihari lad came to know about the online shopping. Through Flipkart.com he started his journey and his hunger for books was consoled by it as it is the largest online retailer of books in India and has been addicted to it ever since. The lad says that it is convenient as you get all the stuffs at competitive prices that you may not get in local stores. It has become his confidant of fortune.
Boston Consulting Group reports that by 2016 India could be a $84-billion industry which would be ten times its worth in 2010 and will account for 4.5 percent of total retail. Thus, E-commerce experts and entrepreneurs say that small-town India would play a major role in online shopping.
Moreover, Group Business Director of Internet and Mobile Association, Balendu Shrivastava intimates that by the end of 2012, 60 percent of online shoppers would indulge from top 8 metros.
India’s organized retail and large chain contributes to less than 10 percent of the market which results in difficulty for the people living in small towns to access their merchandise available in big metros like Mumbai and Bangalore. All these problems have given rise to India’s rural people to use online shopping which contributes to 60 percent of the total population. This has made India the third largest country in internet market.
CEO of Indiaplaza.com, K. Vaitheeswaram says that easy access to internet add ups to the same selection, pricing, discount and deals to the customers which was earlier available to their cousins in large cities. Kunal Bahl, co-founder of Snapdeal.com said that besides books online shopping provides goods such as lingerie and jewelry. He also says “where will you find Victoria’s secrets in the place like Bhatinda?” whose site offers daily deals and is considered India’s Groupon. He sums up by saying that people living in Bhatinda have aspirations to these products. In totality, India contributes to 75 percent of users under the age of 35 earning much more disposable income than their parents which is the world’s youngest internet population.
Earlier buying train tickets meant a long queue at railway counters but in this modern era irctc.co.in and travel firm MakeMyTrip Ltd listed on NASDAQ has revolutionized the travel industry which not only gave birth to easy travelling but to the online shopping also.
The CEO of online gaming company Games2win, Alok Kejriwal said that IRCTC was the first to develop e-commerce in India with which government solved the biggest problem of buying tickets.
According to Edelweiss study in Dec 2011, 75 percent of the business to consumer online market is still dominated by travel industry after MakeMyTrip was in existence. On the other hand e-consumption calls apparel, books, and other consumer goods as its best buddies because Snapdeal.com a non-travel site has the highest traffic on Indian e-commerce sites. Besides providing discounts and fast service such sites serves as a platform for local retailers to sell their products online.
Since India is a micro entrepreneur country Snapdeal aims at maximizing unknown brands of local merchants to get access to consumers across the country. Many e-commerce sites are highly inspired by the successful models abroad such as Amazon which is the biggest departure from the western areas providing cash on delivery products locally. Because a lot of people do not know how to use credit cards says Rohit Bansal co-founder of Snapdeal.
A 25 year old Jharkhandi, Shashank Tiwari who is a mining engineer calls that place one of the most backward districts of India because neither shopping malls, cinema halls or bookstores surrounds the area nor do any online retailers deliver there. Thus, he travels up to 3 hrs to collect his shipments.
It is so because e-commerce relies on courier services for this assistance and recent Edelweiss study has proved that about 10000 of over 150000 pin codes in India are only covered by these delivery services leaving behind a huge population of the country.
Thus, areas not covered under these services will not be able to participate in online commerce else e-commerce companies will have to extend their pool of network in remote areas. But this drastic change in supply chain will leave a huge financial burden on these companies which would be unprofitable due to the heavy discounts they offer to attract customers.
Kejriwal of Games2win says that the companies providing financial and managerial assistance have lost track of the real business because the same goods are sold by other people with no price control.
The unprofitable business ideas make these sites more awful and close towards acquisition and dissolution. Amazon’s Junglee.com has made the competition even vulnerable. As business owners say that Amazon’s entry proves the Indian e-commerce industry and they get a lot to learn from the world’s biggest online retailer.
When the online business is at its verge then tech experts says that the upcoming year would be of great struggle where only few concerns will win. As Vaitheeswaram says that in the coming 12-18 months there would be a lot of reinforcements in the industry!