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)
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