Short introduction to the India e-coomerce market.

1. 1
Scope & growth of ecommerce
If someone wants to go for a movie and also don’t wish to wait in a long queue then there is a
simple option of booking a ticket online. E-commerce or electronic commerce is nothing but any
transaction which has been done using your computer, laptop, tablet or mobile via internet. But
this traditional definition is not enough now because of game changer COD. Cash on delivery
(COD) has significantly pushed E-commerce market in
India. In the fashion and lifestyle segment in India,
about 60% online shoppers prefer COD1
.
In recent years many urban population have tend to do
their banking or payment transactions via internet. This
can be seen by the flooded Indian market with online
shopping sites. Flipkart, Jabong are few examples of
these companies besides the world famous companies like eBay and Amazon.
Due to the technology advancements, rolling out of 3G and LTE services, most of the service
providers, banks and other merchandisers enabled consumers to do their transactions online,
remotely from their devices. This concept has a potential not only to grow in market but also to
achieve the financial inclusion in rural India.
Indian Railway offered a service to book tickets via SMS or UUSD based service, which is
possible due to IMPS. Immediate Payment Service (IMPS) allows people to do their transactions
24X7 from ATM channels, mobiles, internet etc. Using this service customer can pay their bills
or transfer money directly to the merchants. This facility is provided in India by the National
Payments Corporation of India (NPCI) since November 20102
.
The IRCTC way is the great example of ecommerce growth in India. IRCTC, a subsidiary of
Indian railway is now planning to sell books, mobiles on their website. In the budget, Railway
Minister Pawan Kumar Bansal announced that IRCT is aiming to achieve 7,200 tickers per
minute which is 2,000 per minute now. Also they want to increase their site handling capacity to
1.2 Lakhs users at a time from 40,000 currently. The government’s move is to cope up with the
trending e-market in India. This will increase the ecommerce to government site by 200% in
coming years3
.
1
Bansal M, Dec 2012, E-commerce in India – Present and Future, <http://www.iamwire.com/2012/12/e-
commerce-in-india-%E2%80%93-present-and-future/>
2
IMPS, National Payment Corporation of India (NPCI), <http://www.npci.org.in/aboutimps.aspx>
3
IRCTC to go ecommerce way, plans to sell books, mobile phones, < http://www.iamwire.com/2013/03/irctc-to-
go-ecommerce-way-plans-to-sell-books-mobile-phones/>

2. 2
Future of ecommerce is great as Indian government is looking seriously into it. Last year Indian
retail sector has seen the tremendous transformation as cap for FDI in retail in increased (100%
in single brand retailing and 51% in multi brand retailing). Now Planning Commission deputy
chairman Montek Singh Ahluwalia, expressed his deep concerns about FDI in online retail4
. This
will increase the investment in companies, growth of ecommerce may favors not just metros but
tier 2 and tier 3 cities as well. In currant scenario about 50 – 55% of our business comes from tier
2 and tier 3 cities, which is expected to grow as consumers are getting responsive about
ecommerce in these cities1
.
Online retailing which is also known as e-tailing has succeeded to penetrate beyond top metro
cities in India. According to Myntra.com last year about 55 per cent of the business was from tier
2 and 3 cities, this proves that the reach of market is wide due to online platform. The small
cities are also showing positive response to the online shopping concept.
Online shopping sites in India
Ecommerce is an experience. This is not only limited to merchandisers and consumers, but also
involves the inventory systems, website developers and maintenance, gate way payment system
providers , supply chain delivery, etc. To create customer loyalty, online retailers need to give
them a pleasant shopping experience with excellent user friendly and simple website design and
payment systems.
Specially talking about mobile recharge websites, last year Freecharge.in claims that they do
40,000 transactions a day with mobiles, followed by data cards and DTH worth 60 Lakhs rupees
4
Montek Singh Ahluwalia-pitching in for FDI in online retail, <http://www.iamwire.com/2013/03/montek-singh-
ahluwalia-pitching-in-for-fdi-in-online-retail/>

3. 3
a day. This means a single website have potential of 219 Crores rupees a year. As per the data by
website, only 2% of urban population is adapted online recharge that means a huge scope in
future5
.
Source: IAMAI/e-Commerce sites
Though current figures of e-buyers are a smaller amount, it is increasing swiftly every year. As
per The Internet Economy Watch report for the month of January 2013, E-tailing of branded
apparels showed positive impact with a y-o-y growth of 84%. For the footwear and jewelry
segment, y-o-y growth witnessed 80% and 75% respectively6
. These figures are enough to show
that Indian buyers now slowly moving towards the internet shopping. Ecommerce may not be a
threat to retailers or direct merchandising but it will defiantly create its bigger niche market in
nearer future.
Many fashion brands have identified the change in Indian market. Brand like Provogue has
already started its online store. Lessons from the famous model of Sportsdirect, UK are
applicable in India as well. Sportsdirect have their physical stores present in almost all the cities
across UK and also operates as an online e-store. People may not buy things online at first but
once they see the great range of products in store and on website as well, then after couple of
buying instances in shop, they may tend to go for online shopping as there they can get a bigger
discount compared to store. Company also provides special offers and special stocks for online
buyers.
New services of videos on demand and online live streaming are new booming trend which will
contribute in ecommerce market. The websites like Boxtv.com are very famous in youth for
5
Freecharge claims it is doing 40K mobile recharges a day; plans new features, mobile apps,
<http://techcircle.vccircle.com/2012/11/06/freecharge-claims-it-is-doing-40k-mobile-recharges-a-day-plans-new-
features-mobile-apps/>
6
E-tailing of Branded Apparels Registers,
<http://www.iamai.in/PRelease_detail.aspx?nid=2904&NMonth=3&NYear=2013>

4. 4
online movie streaming and channels subscription7
. The content providers are taking the chargers
via online mode. But this needs serious regulation from government.
Rather than just acquiring an attention, creating a faith on the online brand is a key issue.
Incidents like Timtara.com fraud issue are holding buyers back from going online8
. Company
was a fraud, used to take money from users but no delivery of goods or no refunds a well. This
raises point of having strict regulatory body on these websites. Option of cash on delivery is
succeeded in creating and maintaining trust on websites. Indian market may expect a big change
in retail strategy of stores as online stores are cutting down the operating costs and allowing
customers direct benefits in terms of cash discount.
Government’s interest, advancement in technology and increasing ecommerce education in
people is supporting online transactions. The y-o-y growth in various online shopping sites is
incredible. Upcoming year will be year of mobile money and online transactions. India can be a
new hub for world giants like Amazon and eBay. By the end of year 2013 online movie booking,
online electronics market may see tremendous hike. Also IRCT’s efforts are pushing ecommerce
in Indian consumers. We may also see ecommerce included for financial inclusion in rural areas.
The big things are just started in Indian online market. Hope this increase in ecommerce will
help in prevention of tax leakage as well.
Swapnil Mali
7
BoxTV, an on demand video streaming source now available on EvoTv,
<http://www.iamwire.com/2013/07/boxtv-an-on-demand-video-streaming-source-now-available-on-evotv/>
8
Timtara.com shuts down, Current stats 655 complaints, INR 82 Lakh fraud money and counting
<http://www.iamwire.com/2013/05/timtara-com-shuts-down-current-stats-655-complaints-inr-82-lakh-fraud-
money-and-counting/#sthash.X5vbs7lR.dpuf>