Online Commerce in India-Part 1

Online Commerce in India

Amazon, Flipkart, Snapdeal etc. are common household names in India at present. Online commerce is now one of India ‘biggest growing sectors’.  Despite objections over its irregularity, more and more people are getting accustomed to this new way of shopping. But, does this industry does have its share of problems.

India’s internet penetration level is around 11.4%. On the other hand, USA and China today have 77.86% and 40.01% penetration rate. The worldwide average is around 35%. The internet browsing levels are very low in India compared to other parts. It is still expensive to browse the net in India; also people from tier-2 and tier-3 cities find it difficult to have internet access. We have a population base, which has budding for a thriving e-commerce industry but is limited by the broadband penetration.

The infrastructure requires secured payment solutions, and blindly trusting your money with some unknown company is very difficult to achieve in India. But, high failure rate at payment gateway could obstruct the growth of e-commerce industry. There are many loopholes in the law, causing many cyber crimes to occur.

Biggest challenge in India for online retailing companies in India is logistics. Given the large size of the country, there are thousands of towns that are not easily accessible. Metropolitan cities and other major urban centers have a decent active logistics infrastructure. But since the real “customers” of the Indian market lies in its large population, absence of infinite access to a significant of probable customers is a hindrance.

 Another great hurdle of all is the huge competition between various e-businesses. For a small product, there can be as many as five different well-funded companies battling for it. The firms have been fighting in a price war that has pushed profit margins to almost nothing. Bidding wars can spiral out of control even on the company’s own name.  The war these companies are fighting is unsustainable.  The problem of competition is also compounded by very little brand recognition.  (Continued in part 2)

Gujarat Solar Park

Gujarat Solar Park

In May 2014, Narendra Modi was elected the Prime Minister. He left his job as the Chief Minister of Gujarat, a state he had developed into one of India’s most economically productive one when he took reins in 2001. Right now, Gujarat is one of the few states in India which can boast of 24-7 electricity. And to supplement that is the Gujarat Solar Park.

Asia’s largest solar power park, the Gujarat Solar Park is a great initiative from Modi as a part of India’s efforts to curb carbon emissions. The most surprising thing is that what once was complete barren land, is now expected to generate 2/3^rd of India’s solar power production. Considering the massive 2012 blackout, awareness & use of renewable energy in India must increase & this is a great step towards it. By 2013, India aims for solar power to account for 3 percent of total national capacity and the nation wants renewable sources of energy to rise from the current 6 percent capacity to a whopping 15 percent of capacity by 2020.

As more & more solar plants are constructed in & around these areas, economic rural development is expected to occur. And there are other benefits too such as employment generation as well as irrigation water provision.

The huge power deficit and the recent challenges to coal & petroleum supply, is one of the main reason why Modi was voted into power. The success of the scheme, should propel other states to create & develop more solar parks. Projects such as the construction of new plants Dhirubhai Ambani Solar Park in Rajasthan, Welspun Solar Park (Madhya Pradesh), Sakri Solar Park(Maharashtra) and the development of solar park in Andhra Pradesh and Bhadla Solar Park (Rajasthan) are examples of these. More such sites for these plants are being identified by Jammu & Kashmir, Meghalaya, and Karnataka etc. Foreign Investment, hence, is much required for these. And for that to occur, we must support & enhance our knowledge/use of solar energy.

As Thomas A. Edison once said “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” Certainly, we don’t have to wait since we don’t have time to complete replace non-renewable energy with renewable forms. Other countries such as USA and China have already realized this and have formulated polices with regard to this.