Predictions for ecommerce industry in India and recommendations

Predictions for ecommerce industry

•Growth- Product portfolio expansion and geographical expansion will be the major growth drivers

•Profitability- As the industry becomes more acceptable, customer trust will become less of a challenge. The questions of showing profitability or a plan to show profitability will become more pertinent. Industry may see some consolidation this year but definitely next year

•Platforms- mCommerce will make an impact and interfaces will become more interactive and intuitive 

•Business models- Marketplace will be a key driver but many of the companies will start carrying inventory

•Backward/forward integration- Owning the supply chain including delivery logistics to take the control from the unreliable courier company will be the key. Self-branded products will enter the market

Recommendation for new entrants

•Build a robust fully functional eCommerce site, which can be used as a market place and later on can work as a framework to take to the market. Amazon and eBay have done that

•Enhance mCommerce capabilities

oBuild applications and/or website for mobile platform

oDevelop and include mobile payment as one of the payment options

•Increase market reach

oTarget the young. Connect with the young generation through a robust social media presence

oEnter the untapped market of tier II & III cities

•Build an independent logistic/ delivery network as it is one of competitive advantages.

•Educate people to make a safe online payment. Tie up with banks to simplify the payment procedures and make them more trustworthy

•Price high value products more competitively to encourage its purchase, which would increase the average transaction value

•Acquire small players doing business in niche areas

•Treat suppliers as partners but make only short term contracts, as the customer behavior towards a product can be very transitory

•Use predictive analytics to predict a product’s demand in the future. This is important as eCommerce players need to follow an inventory-based business model and they need to keep their inventory in line with the future demand

•Increase the switching cost for the buyers by offering them heavy discounts and exclusive offers through online wallet facilities

•Tie up with traditional retail stores to leverage their trust and collective reach in the market