INDIA E – RETAIL MARKET
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 – RETAIL MARKET DYNAMICS
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.
E – RETAIL MARKET SEGMENTATION
The Indian Market of E Retail can be segmented into following categories for further analysis.
By Product Application
- Food and Beverages
- Personal and Household
- Apparel and Footwear
- Toys and Products
- Electronic and Household
- Other product categories
By Approach Integration Type
- Business to Business
- Business to Consumer
- Consumer to Consumer
- Consumer to Business
- Business to Business to Consumer
By Browsing Channel / Access Type
- Desktop / PC
- Mobile Devices
- Website based Device Access
- Application Based device access
By Payment Mode usage Type
- Card Payments
- Digital Wallet
- Bank Transfers
- Internet banking
- COD – Cash on Delivery
- Other Payment Modes
By Regional Classification
- Western Region – India
- Eastern Region – India
- Southern Region – India
- Northern Region – India
RECENT MARKET TECHNOLOGICAL TRENDS IN RETAIL SEGMENT
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.
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 on 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.