Future of eCommerce in India

Written by Avinash Yadav - e-Commerce, e-Commerce in India, Uncategorized - No Comments

Future of eCommerce in India

India has witnessed many new successful e-Commerce stories in the recent past. The traditional Indian commerce houses are moving towards Electronic Commerce. The successful Indian e-commerce such as, Flipkart, Jabong, Yepme, Infibeam, Lenskart etc. have proved the capabilities of Indian Business Houses. The success of these Indian E-commerce giants suggests that the future of E-commerce is very promising in India.

The Growth of E-Commerce in India

The Indian e-Commerce website , Flipkart,has more than 6.9 lakh daily visitors and is ranked 220th in the world. The important point to notice is that this ecommerce website is just 6 yrs old. Similarly, Jabong.com, a 6 year old ecommerce website, has 2.6 lakh daily visitors with about 97% of its traffic from India. ( source : Statscrop.com).

E-commerce Related Laws in India

Information Technology Act, 2000

The Information Technology Act, 2000 governs all the IT enabled transactions in India. There is need for more specific legislation on Ecommerce.

FDI Policy in India

  • In Multi Brand Retail, Foreign Direct Investment (FDI) is allowed upto 51%.
  • In Single Brand Retail, Foreign Direct Investment (FDI) is allowed upto 100%

But the above FDI policy in India presently doesn’t allow investment in B2C E-commerce segment. The Department of Industrial Policy and Promotion (DIPP) is considering proposal to allow upto 49% of Foreign Direct Investment (FDI) in B2C E-Commerce Segment.

In Business to Business (B2B segment), the Foreign entities are currently allowed to invest 100% in Indian Subsidiary Company.  But there is need to open up the B2C Ecommerce Space.

Presence of Amazon and eBay in Indian Market

Presently Indian entities are getting FDI by creating two tier structures. One B2B entity and the other B2C entity . The Foreign investment is made in the B2B Ecommerce entity.

eBay has invested $50 million in Snapdeal.com. Snapdeal is an Indian deal site.( source: hindustantimes.com)

The Global E-commerce Giant Amazon asks the Indian Government to relax the law online retail in India. Paul Misener, the Amazon’s Global Vice President, had met the Indian Commerce and Industry Minister, Anand Sharma, to discuss the future of E-commerce in India. Amazon is committed to serve the Indian retail customer and hopes that the ban on direct sales to customers would be removed.

Amazon has already launce a modified version of Shopping Portal, Junglee.com, where customers can compare and get information on various online products.

The Future of E-Commerce In India

The future of E-commerce in India seems to be very robust on account of following reasons.

User Friendly Environment for SCM

Leading electronic business solution agencies like IBM, SAP, and etc. have developed user-friendly platforms for supply chain management (SCM), product life cycle management, customer management,  HR management and enterprise portals.

Extensive Use of Internet in India leading to E-commerce Growth

The number of Internet users continues to grow, providing a strong base for e-commerce. Google.co.in’ is ranked 12th in the world with 8.7 million daily visitors. Again, 97% of the visitors of google.co.in is from India. India has large number of daily internet users.

Mobile Commerce In India

According to Stats counter, Mobile Web Usage in India has surpassed desktop internet usage. Mobile internet users are very active and they are searching the web for all kind of product information.  New hardware like Smart phones, tablets is strengthening the e-commerce retail demand. The rapid growth in Mobile Internet Users has opened up the scope of Mobile Commerce in India.

IT Outsourcing Facility

Complex e-Commerce Applications can be outsourced at reasonable cost.

Relatively Cheap Delivery Mechanisms

Companies are again getting opportunities to use a wide range of new and relatively inexpensive delivery mechanisms which maintain links with customers especially for value added services and support.

World Class Transactional Applications System

Transactional applications are becoming more widespread in such areas as online payments, e-financing, and credit risk management.

Telecommunications infrastructure can support the growth of e-commerce applications.

Conclusion

With the rapid growth of high speed Internet, the e-retail segment is growing at the rate of 40% in India. Global e-commerce giants are eyeing India as their next destination. The value of transactions is estimated to touch Rs. 36,000 million by 2013.

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