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Ecommerce industry observed in 2015

The Year that was and will be for Ecommerce

Excellor

As we move closer to the end of this year, let us look back at the phenomenal success that Ecommerce industry observed in 2015.

Let’s talk some numbers

Indian e-commerce industry is valued $17billion at present and is expected to clock a compounded annual growth rate (CAGR) of 35% and cross the $100-billion mark over the next five years, according to an Assocham – Pricewaterhouse Coopers study.

Indian e-commerce startups received $2.6 billion in funding in the first nine months of 2015, compared to $3.1 billion in all of 2014, according to Tracxn.

Goldman Sachs recently doubled its estimated value of the Indian e-commerce market for the 12 months ending March 2016.

Technology driven Ecommerce Highlights

The boom in Ecommerce could be attributed to the enhanced use of technology, which has helped improve Ecommerce right from supply chain, inventory management and delivering great customer experience.

We saw a major shift in how technology drove critical changes in the way Ecommerce companies decided to operate. Looking at the increasing traffic through mobile devices- Flipkart decided to go APP only with Myntra and need for mobile responsive sites.

The other major beneficiary of Ecommerce growth is the logistics sector, which has seen technology-driven innovative approaches. Right from usage of robots by DTDC to integrating GPS tracking functions and automated algorithms to improve the efficiency, logistics has witnessed it all. Daily shipments logistics players have crossed 1 million shipment led by 200,000 shipments per day from Ekart and Gojavas, while Gati and Blue dart provided expanded reach covering more than 20,000 pincodes/locations.

The other critical technology piece that powers the Ecommerce show is the software / platform supporting the e-store. The Ecommerce marketplace giants in the country have thousands of employees looking after technology needs of their online store. But how about brands and retail stores who are already late in the game. These brands do not have the time nor the bandwidth to build a solution from scratch and thus in these scenarios the Enterprise grade Ecommerce solutions play an important part. These solutions not only help the companies to get a quick head start but also seamlessly integrate with the existing system managing ERPs, POS, logistics, taxation and accounting. The advantage with enterprise grade is the scale of business it can support coupled with the power of analytics and customer insights. Thus selecting a right solution is critical to a company’s Ecommerce success.

Ecommerce away from deep discounts

Well as cliché as it may sound discounts and cash-back offers helped Ecommerce companies right from Flipkart to Snapdeal sell record $11 billion goods online-according to an article from national newspaper. The point to be highlighted here is all these companies are consciously trying to reduce the level of discounting and also experimenting with strategies to build customer loyalty.

One such strategy is Flipkart’s collaborative social on-line shopping experience. The aim is to move the focus to social shopping where in friends and family shop together for an occasion or celebration. This strategy exemplifies a smart move towards creating value for customers and moving towards a model that is more sustainable.

Government driven Ecommerce initiatives

The year saw a great interest from the government with various initiatives to boost Ecommerce.

The most important one being Government of India’s initiative, announced on 10th November 2015, to ease FDI norms in 15 major sectors. This policy change with enable Single brand MNCs and Manufacturers to sell their products through Ecommerce without Government approval.

Also RBI regulations passed on November 16, 2015 which lifts all FDI restrictions boosting investment in etail

The other positive move is the first instance of the government teaming up with a global Ecommerce major to further its empowerment agenda. The Ministry of Women and Child Development will join hands with eBay to provide a platform for economically disadvantaged women to sell their products to a global market.

Government is also promoting adoption of digital money in India with IRCTC and MobiKwik partnership. This pact will enable MobiKwik users to book railway tickets in a convenient and secure manner from their smartphones. This initiative is expected to boost online ticket sales with the ease of one-tap payments.

Way forward

Riding on the strong growth momentum of 2015, the e-commerce sector is estimated to see a 72% jump in the average annual spend on online purchases per individual in 2016, from the current level of 65%.

Ecommerce is here to stay and with the wide range of Ecommerce initiatives planned by Government of India we are expecting much higher growth in the sector.

We are expecting an interesting Ecommerce year ahead with evolution of business models, innovation in technology and a move towards sustainability. It’s time for brands to reconsider their technology capability to manage scalable and sustainable Ecommerce business for future.