India: The next e-commerce tech boom destination

China is breaking e-commerce records and is on its way to becoming the world’s largest e-commerce markets, led by its acquisition-hungry giants Tencent and Alibaba. However, India has the potential to one day challenge its fellow Asian market for e-commerce dominance, as the country’s tech environment continues maturing and consumers are becoming more eager to buy online. With Amazon, Alibaba and other e-commerce majors already lookin to enter the market en masse, India is likely to be a fruitful destination for business transfer agents and online shopping start-ups.

India is witnessing rapid growth in its e-commerce segment, as the country’s large population, especially its young demographic, is increasingly going online to research and purchase goods and services. The growing accessibility of telecom services in rural areas is providing opportunities for e-tailers, online payment gateway systems and niche Internet retailers, as well as offshoot segments such as banking, online marketing and social media. The ability of the state and private providers to maintain connectivity expansion in underserved rural areas will be key in maintaining future e-commerce growth.

Indian consumers have already shown a penchant for limited duration online ‘flash’ sales. According to Chinese smartphone maker Xiaomi, it sold more than 500,000 handsets in India during July using this strategy. The latest brand to utilise this strategy is fast-food chain Burger King – for a week, consumers could pre-order its sandwiches on eBay at a promotional price of INR128 (US$2.10). The burger chain opened its first Indian outlets in Delhi and Mumbai during November. On Burger King India’s Facebook page, some expressed scepticism of the flash-sale concept, while others proudly posted screenshots of their bookings. “It will definitely catch the attention of consumers, but I would be surprised if it translated into a large volume of sales”, Neha Dharia of market research firm Ovum told the Wall Street Journal newspaper.

The Indian government has also launched a Facebook page enabling consumers to report malpractice in fair-price shops. Fair-price shops (also known as public distribution shops) distribute subsidised food and non-food items like wheat, rice, kerosene and sugar to less affluent consumers. Consumers are invited to air their grievances and post incriminating photographs. The Hindu newspaper reported that the Facebook page received over 4,000 queries and 3,685 likes and had reached more than 50,000 users in its first month.

The development of payment methods will be a significant factor in driving growth in e-commerce. Presently, cash on delivery remains the most popular payment method for online goods, which limits efficiency and speed of transactions. The expanding reach of online banking and the take-up of payment gateways systems such as PayPal will expedite growth in online retail. However, with more Indians moving to urban areas, rising disposable incomes, growing Internet penetration and the rise of the middle class, India is set to become one of the hottest e-commerce markets globally, offering explosive prospects to willing participants in its digital revolution.




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