Internet Technology

E-Commerce leads the ways in retail

today19 August, 2021 32

Background

India Trendbook Report 2021 has been released by the Indian private equity and Venture Capital Association (IVCA) and Ernst & Young on the E-commerce and the consumer internet sector which stated that the growth of the fin-tech sector is estimated at 22.7 CAGR during 2020-25.

The COVID-19 pandemic has had a significant impact on the Indian economy, which saw one of the largest lockdowns globally. The Indian internet economy, which was one of the most attractive markets worldwide, saw a 90% decline in April 2020, crippled by the shutdowns. The decline was a result of steep falls in business for e-commerce and travel, the largest sectors in the internet ecosystem. However, the pandemic helped accelerate growth for segments such as hyperlocal delivery, edtech, healthtech and online payments as Indian consumers moved online to fulfil their daily needs.

EMERGING THEMES

  • Deployment of capital is getting broader
  • Larger companies are being created across most sub-sectors
  • While capital is being concentrated to the large players, growing list of young start-ups also attracting investments
  • IPO build-up, consolidation ahead
  • Evolution of investor ecosystem with new class of investors participating in the segment
  • Emerging themes
  • Entry into new markets –including global aspirations and expansion plans

THE BIG CHANGE
The rapid increase in the number of internet users has attracted a number of new budding entrepreneurs to set up establishments by flooding the market with innovative pricing and stocking practices (marketplace vs inventory) while traditional players (brick and mortar stores) are catching up. Availability of numerous choices in terms of brands, discount offers, reduced delivery time, personalization, cash on delivery, digital payment infrastructure and easy returns have been major factors for development of the B2C e-commerce.

Companies are creating an omnichannel presence, blending online shopping and offline retail to overcome trust issues of customers. Leading e-tailers in India are planning to open brick-and-mortar stores. Digital B2C companies have also invested in creation of brands which attract young millennial crowd comprising of a majority of the online shoppers who tend to be more brand conscious. These companies are forming innovative product bundles aligned with the needs of customers and thus ensuring greater customer engagement.

Through its Digital India campaign, the Government of India is aiming to create a trillion-dollar online economy by 2025. India e-commerce is expected to reach US$99 billion by 2024, growing at a 27% CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth. Online penetration of retail is expected to reach 10.7% by 2024, versus 4.7% in 2019, while online shoppers in India are expected to reach 220 million by 2025.

Pandemic has accelerated the e-commerce industry in India by a decade, revolutionizing the way brands operate, run, and grow their businesses, as well as how consumers choose to shop and pay.

As per Nielsen India’s E-commerce consumer panel, there was a double rapid increase in average spend of online shoppers for various categories.

Emerging trends in e-commerce

In India, 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized experience. By 2021, more than half of the customers will expect from online companies to anticipate their needs and make relevant suggestions before they make contact. 28This has led companies to focus on personalization to customers shopping online through AI/ML technologies and marketing integration.

  • Focus to bring personalization for customized needs of customers using analytics

Industry players are leveraging collaboration to expand and enter into new markets. A leading Indian conglomerate is looking to tap the online furniture market and global e-tailer recently announced collaboration with Energy Company to enable customers to book and pay for their LPG cylinders until the delivery.

  • Companies are expanding product portfolio through M&A and partnerships

As per survey, 73% of Indian respondents are willing to spend more on convenience.29This is also evidenced by a rise in adoption of online shopping, especially in non-traditional categories such as groceries/medicines, Among all categories, both fashion brands and retailers have been proactive in adopting omnichannel as a part of their strategy. “Ship from store” and “Exchange of online purchase at the offline store” has been particularly high in its adoption given that it falls under high preference factors for customers. Numerous retailers have also opted for the “Click and Collect” model in fashion.

  • Omnichannel is helping to enhance consumers’ experience across channels

Vertical eCommerce firms in segments such as beauty and fashion, grocery and home furnishings are gaining traction. Leading online beauty products brand became profitable in FY2019, bucking trend of ecommerce firms reporting losses.

  • Vertical players are emerging to cater niche segments

Ecommerce companies are collaborating with Fintech players to provide credit access to consumers for seamless shopping experience. For instance, an Indian e-talier recently tied up with financial players to offer credit options for consumers at a time leading up to the country’s annual festive ecommerce shopping season to help bolster sales. It has announced collaboration with 17 NBFCs and fintech startups to provide credits to over 70 million consumers on its platform.

Written by: ICS

Rate it

Previous post

  • 22
close

labelAI today19 August, 2021

AI Trends for 2021

In the face of the pandemic the roles of technology leaders has changed and the way each node of tech is functioning is more collaborative. Data and AI certainly plays [...]

Read more



Subscribe now and receive our weekly updates.

Field is required!

16 - 17 Mar, 2023 | Dubai, UAE ★ August 2023 | Mumbai, India


Background
Background