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In India, the retail sector is one of the major contributors to generating employment opportunities for the youth. Also, its contribution to the Indian economy is enormous. In recent years, we have witnessed a changing trend in the retailing industry, especially among young shoppers. The industry has seen a remarkable change in the shopping pattern among Indian consumers.
E-retail or online retail is defined as retailing activities done through the internet. We have many online or e-retailers in India who provide a variety of merchandise to customers. In general retail business is referred to as Business to Consumer (B2C).
Online retail players are classified into two types of category focused players and multi category focused. Category focused players provide particular merchandise with deep assortment. Ex: – Myntra (Apparels and Lifestyle products), Big basket Grocery segment), Pepper fry (Furniture) etc. whereas Multi category players provide a variety of merchandise with limited assortment. Ex: – Flipkart, Amazon etc.
The E- Retailing market in India has enjoyed robust growth of almost 55 per cent for the last six years. Though e‐commerce has been around in the last fifteen years, the pertinent factors are now finally in place to drive the E Retailing market ahead. Nonetheless, the technological advancement in the Internet‐enabled handheld devices has made them abundantly available.
Major international businesses have made significant investments in the Indian e-commerce market. Amazon has established Amazon India; Walmart has purchased Flipkart and Alibaba has invested heavily in Big Basket and Paytm. As of 2019, Amazon India and Flipkart are the industry leaders, with more than 70 per cent market share combined.
E-Retailing within the country has led to customers having an increasing choice of products at competitive rates. It is probably creating the biggest revolution in the retail industry, and this trend will continue in the years to come. Retailers should leverage the digital retail channels, which would enable them to spend less money on real estate while reaching out to more customers in tier-2 and tier-3 cities.
It has also been seen that E Retailing has brought upon the much-required platform of selling for the unorganized sector within the country as well, wherein the platform for personal listing and sale of products is being made available by the top retail players of E – Commerce as part of their branding strategy to enhance the branding and product value.
This has made the e-commerce segment more pertinent to development within the country as part of E Retailing initiatives which has brought the platform of development for small retail stores and segments.
E-commerce is expanding steadily in the country. Customers have an increasing choice of products at competitive rates. E-commerce is probably creating the biggest revolution in the retail industry, and this trend will continue in the years to come.
India has more than 1 billion mobile and broadband subscribers as of January 2021. This penetration of the internet coupled with the increasing confidence of the internet users to purchase online, has led to an enormous growth in the e-commerce space, with an increasing number of customers registering on e-commerce websites and purchasing products through the use of mobile phones.
The online shopper in India continues to be more urban, better educated and more modern in their tastes than the average consumer. They are part of India’s rapidly growing middle class. These factors can be seen influencing the growing appetite for international brands and better-quality foreign and imported products among digitally connected shoppers.
While consumer electronics and fashion apparel are the major e-commerce retail categories in the market, food and grocery, baby products, personal care and home furnishings are significant categories that are also growing quickly.
With the market dynamics in place, it can be seen that the desire for convenience is also helping create growth in the sector. Indian consumers, particularly high-frequency premium shoppers, are attracted to the ease of shopping from home. Roads can often be congested, and retail environments are not always of the highest quality. Furthermore, the range of products available online, both local and imported, is extensive and shows availability.
Electronics and apparel account for approximately 70 per cent of India’s e-commerce value at retail. However, other categories are growing faster, including baby products, home furnishings, personal care, food, and groceries. Within the food and beverage category, branded and imported goods have the largest overall share at 26 per cent and growth of more than 50 per cent year on year.
Online retail has accomplished a clear victory over offline retail in the COVID-interrupted year. The ease, convenience, and safety provided by online retail attracted consumers in a whole new dimension.
The nationwide lockdown even introduced a large number of customers who never shopped online. But despite such humongous growth, these people would more likely return to physical stores with the fading of the pandemic. The physical stores which were once adversely affected by the pandemic are likely to give a tough fight to online stores. Although the fastest way to grab groceries is to visit a local store and purchase them, still many consumers do not prefer this mode of shopping in the COVID-era.
Due to this, many big and small offline stores have started offering their consumers an ‘order online’ and ‘pickup at store’ facility. Retailers are likewise forging alliances with e-commerce companies to deliver products to your doorstep. In this way, consumers can place orders from their favorite offline retailers and get them delivered within a day or two via e-commerce companies.
The India E-Retail Market can be segmented into following categories for further analysis.
The Recent integration of the technological advancements of artificial intelligence and other components alongside the visual technologies of motion and sensors has increased the retailing segment in recent years, with better presence and virtual reality-based experience being created for the customers. Thereby it can be seen that the various technological inclusions within the industry has increased its reach and is trying to boom the industry through its viability of approach.
The future of the e-commerce delivery system is expected to be focused not on a specific address, but on an individual person and their expected location and time. Pinpoint shipping, as this is referred to, would embed sophisticated AI.
This automation lies in drones embracing the sky and droids on the ground. Despite many obstacles in drone delivery, the benefits of its adoption are great for retailers. This will considerably cut costs in logistics operations. Amazon is in the first line with its testing of a new, fast drone delivery system – Amazon Prime.
India has been the hub to recent integration of AI based technology within the applications, wherein many startups have been involved in driving this force of operational embedment within the e-commerce platforms. The AI uses visual search and discovery tools to link individual images with a user’s interests to recommend products that they are more likely to purchase.
Similarly, it delivers AI-powered personalization solutions by interacting with users through text and voice messages, while also being able to identify and find products based on pictures. There has been a recent integration of the beacon technology which runs partially on the same AI technology-based lines of operations.
Beacon technology operates by sending the current deals and offers, or anything related to products’ promotion, right at the moment the consumer enters the ‘Zone’. But before that, the devices need to be connected with each other, that we call ‘beacons’ post connectivity. The Zones can be established at low-cost efficiencies across the country which are being run by many of the e-commerce retailers within the shopping outlets for ease of access.
The E-retail industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology and training and has a favourable cascading effect on other industries as well.
Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second largest E-commerce market in the world by 2034. Technology enabled innovations like digital payments, hyper-local logistics, analytics driven customer engagement and digital advertisements will likely support the growth in the sector.
The growth in the ecommerce sector will also boost employment, increase revenues from export, increase tax collection by ex-chequers, and provide better products and services to customers in the long-term. Rise in smartphone usage is expected to rise 84% to reach 859 million by 2022
India’s e-commerce ecosystem includes well-known international businesses such as Amazon, the American online giant that has been active in India since 2013. Big Basket is the country’s largest online supermarket and has more than 18,000 products. Flipkart is the Bangalore-based e-commerce pioneer that was purchased by Walmart for US$16 billion in 2018.
Online retailers are also developing marketing campaigns to attract more price-sensitive shoppers. Shopping festivals such as the Big Billion Days sale from Flipkart and the Great Indian Festival at Amazon are high-profile events that attract a lot of publicity as well as new online consumers.
Additionally, the Indian e-commerce scene has a nice mix between pure e-commerce players and brick, and mortar retailers turned e-commerce giants. So far, it is electronics that make up the most significant online retail sales category in the country.
The E Retailing and Commerce giant Amazon holds to be the largest retailer in the E commerce section of the country with enhanced levels of self-produced products in collaboration being brought out as part of the sustainable and affordable marketing strategy. This has been the one of the most visited platforms in the country on a daily basis as per the National Informatics centre and Amazon Operations centre.
The Major competitors to Amazon in the E Retailing segment includes Flipkart which is a proud tackling E Commerce giant of India, with a focused shift on provisioning availability of products with limited interference throughout the country. The organization has aimed itself to operate in all corners of the country, with its major focus on supply chain management and distribution spread of products.
Amazon has recently started to integrate its websites and applications with the edge cutting technologies of Chatbots and AI based searches that have not been mobilized within the other platforms. This has gained the giant an extra foreseeable edge on integration of technological advancement to increase the ease of access and choice of comparison to the customers.
With the swift rise of digitalisation, governments worldwide are incorporating and introducing technology into administrative processes and therefore, are quickly adopting e-governance. In fast-expanding and booming economies, such as India, e-governance has become essential.
Following this, the Indian government launched the ‘Government e-Marketplace’ to offer procurement services in a convenient, efficient, and transparent manner. The platform is likely to radically change the government procurement process by consolidating all procurement needs of different departments into a single platform to offer economies of scale, better price discovery and best practices.
National Retail Policy: The government has identified five areas in its proposed national retail policy—ease of doing business, rationalization of the license process, digitization of retail, focus on reforms and an open network for digital commerce—stating that offline retail and e-commerce need to be administered in an integral manner.
The Consumer Protection (e-commerce) Rules 2020 notified by the Consumer Affairs Ministry in July directed e-commerce companies to display the country of origin alongside the product listings. In addition, the companies will also have to reveal parameters that go behind determining product listings on their platforms.
In June 2021, Grofers, the grocery delivery start-up, reportedly entered the unicorn club, after raising US$ 120 million from Zomato, the food delivery platform.
In June 2021, Mastercard invested an undisclosed amount in Instamojo, a payments firm, to help digitise online stores and process their payments more seamlessly.
In May 2021, Amazon introduced a video streaming service within its shopping app called MiniTV for users in India. MiniTV features web series, comedy shows and content on tech news, food, beauty and fashion.
In May 2021, Flipkart strengthened its grocery infrastructure to cater to customer safety and demand across India. In this quarter, it is planning to further expand its fulfilment centre capacity for grocery by over 8 lakh square feet across Delhi, Kolkata, Chennai, Coimbatore and Hyderabad.
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