E-Commerce traditionally considered to do well in densely populated and highly developed markets, like the UK and also Japan, where market penetration stood at 77% percent in 2020. Larger and more diverse markets tend to move slower like India.
Other emerging economies, like Brazil and India, are catching up more gradually as penetration rates for e-commerce remained low. India is ready for its second wind post-COVID 19.
Let’s understand the economics of the Indian Retail Market
The $850 billion Indian retail market is the fourth largest in the world and is largely unorganised. This market has been on the cusp of a transformation, led by the emergence of e-retail and its growing influence on Indian shoppers. The Indian e-retail market is primed to reach nearly 300 to 350 million shoppers over the next five years—propelling the online Gross Merchandise Value (GMV) to $100 to 120 billion by 2025.
With the steep increase in shopper penetration, driven by lower data prices and investments to improve customer experience, online platforms are innovating to onboard the next hundreds of millions of shoppers.
The next wave of shoppers will have different needs and will interact differently than the current set of online shoppers.
We see four key trends going forward :
Voice and Vernacular
Visual and Video
Social Shopping and;
The emergence of large digital ecosystems.
Impact of COVID -19
The worldwide spread of the COVID-19 pandemic has disrupted how people buy products and services and how they perceive e-commerce. The standardized lockdown rules across India and the growing hesitation among consumers to go outside and shop for essential goods have tilted the nation towards e-commerce.
Consumers have switched from shops, supermarkets, and shopping malls to online portals for the purchase of products, ranging from basic commodities to branded goods. It has caused an inflection in e-commerce penetration globally driven by consumers’ need for safety and convenience and even in India, online is gaining salience. A Bain & Company-PRICE survey of 3000 households across income groups and geographies which was conducted between April and June, revealed about 13% of respondents buying online for the first time, while about 40% buying more online.
Expect India’s E-commerce growth story to be inclusive:
We expect India’s e-commerce growth story to be inclusive—one that empowers the sellers and consumers both. For the consumers, it will provide convenient access to a wide assortment of products across all geographies and income segments. For sellers, kiranas, artisans, traders, and home-entrepreneurs it will provide an unprecedented impetus, by creating an easy access to a large base of customers across the country and keeping their stores running 24x7. E-retail has benefitted millions of customers across India, exponentially increasing merchandise choice, price transparency and augmenting access and convenience.
Given how consumer behaviors are shifting, particularly in the wake of the prolonged lockdowns, indeed digital is now table stakes for all brands.
Conclusion:
“Ecommerce isn't the cherry on the cake, it's the new cake”.
In 2021, e-commerce brands will need to up their game in how they communicate with customers, or they’ll be left behind and forgotten. There’s no way around it — marketers must get more sophisticated, and that means unifying their communications across channels and across their customer journey, targeting their audiences more effectively, and investing in growing their own first-party customer data. In e-commerce, brands that build long-standing relationships with customers will win.
Source: Forbes and ET Retail