Development in Indian E-Commerce Space
Popularity of e-commerce has grown tremendously over the last few years in India. Increased and easy access to the Internet has led to a fast growth of e-commerce. Currently, almost all types of businesses are using e-commerce as an opportunity to raise the profitability.
Growth of e-commerce sales
Investors in India would seldom be enthusiastic to invest in e-commerce due to many comprehensions they have on online transactions. However, the trend in the e-commerce market is changing now. The healthy fact is that e-commerce has led to rise in the numbers of sales of companies in retailing.
According to the reports from IAMAI (Internet and Mobile Association in India), the e-commerce market in India has seen a manifold increase in the recent years. For the period 2009 to 2010, the e-commerce market has increased from Rs.19,688 crore (by the end of 2009) to an estimated Rs. 31,598 crore (by the end of 2010).
This growth in e-commerce sales can be attributed to four main factors – simplicity, cost effectiveness, transparency and value for money.
Growth of venture capital investments
The growth of e-commerce in India has encouraged venture capitalists to invest heavily in the sector. They find it more effective in creating a favorable impression on the potential and current customers. It facilitates direct interaction between the company and the end user/buyer of the product.
It is reported that $140 million (Forbes India, 23 Feb, 2012) has been invested in these enterprises. Venture capitalists have also set high estimations on the growth potential of e-commerce in India over the next few years given the healthy growth rate of the economy.
Advertisements in TV
The Internet resulted in the growth of online businesses. Certain companies sell a wide variety of consumer goods via the Internet. Over the past two years, the growth of such online companies like Flipkart, Snapdeal, Futurebazaar, Inkfruit, Myntra, etc., have contributed to the growth of e-commerce in India.
Advertisements in television channels, like MTV, V channel, that target young audiences, in various other channels during the prime time and especially, during the telecast of cricket matches (most Indians are crazy about cricket), also have led to increased awareness of online companies. Advertisements of these e-commerce businesses have turned many customers towards the online shopping. Online shopping has set a new trend in shopping.
The benefits consumers see in e-commerce transactions include the quality of the product, in-time delivery at door, cash on delivery (companies like Myntra and Snapdeal offer this), and above all, discounts on price. Some e-commerce sites like Flipkart and Jabong guarantee product replacement in the event of delivery of defective product (if returned within the specific time limit). Thus, there is no need to rush to a retail shop asking the salesmen 10 or 20 questions, to which he may feel peeved at.
As the economy grows at a healthy rate of more than 6% (The Economic Survey, 2011: Govt. of India) and is expected to perform so, given the stability in prices of food articles and various other products, the number of people with greatest shopping affinity would increase and a corresponding positive effect on the growth of e-commerce in the coming years can be expected.
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