Factors Responsible for Growth of E-Commerce

05/07/2021 0 By indiafreenotes

Growing investment in logistics and warehouses

Online retailers say they have extended their reach to “70,000-80,000 pin codes” out of nearly 100,000 pin codes in the country. There are also reports of online retailers trying to tie up with India Post and petrol pump stations to reach out to more customers. Expected aviation boom in small cities might also widen the reach of online retailers in future.

Growing usage of debit cards for cashless transaction

There has been a net addition of nearly 140 million debit cards in the country in the past two years. What is more, the usage of debit cards at point-of-sale terminals has seen a growth of 86 per cent in the same period. It indicates the willingness to use debit cards for purposes other than withdrawing money at ATMs has increased. With many online retailers still insisting on use of cards for high value transactions, it is a welcome change. It will allow e-tailers to reach out to many areas and many more customers in coming years.

Unique or Commoditized Products

Establishing a reputation and brand for quality products always drives demand. Commoditized products such as mainstream tools, consumer electronics or other equipment’s generally show less success while selling online. Even though these are the most popular online items, consumers prefer to buy them from renowned retailers such as eBay or Amazon.

Growth of mobile commerce

Online retailers’ growing reach in non-metro cities is being driven by the rise in usage of mobile internet in the country. According to Internet and Mobile Association of India, the number of mobile internet users in the country stood at 200 million in December 2022. It is set to grow manifold by 2025.

Remarketing

Businesses of any size have to be creative to stand out of the crowd. Ecommerce creativity emerges from multiple touches to produce continued interests in the products. In one word, this technique is popularly known as Remarketing.

Adoption of Multi-Channel Investments

Cross-channel investments are highly aggressive in augmenting both online and offline buying strategies. Multi-channel eCommerce business is an environment in which a company can sell through two or more online channels. Many stores are pushing endless-aisle initiatives and are being used as a warehouse for an online catalogue to enhance the speed of home delivery.

Growth in cities beyond metros

About 20 per cent of India’s population lives in cities outside of metros. There are several pointers that suggest this large group of city dwellers have significant purchasing power. Honda, for instance, sells 60 per cent of its Amaze car in tier-II and tier-III cities. These cities account for 55 per cent of Honda’s City models.

Consumer demand is rising rapidly even in small towns and cities. Talking about the potential of fast-moving consumer goods (FMCG) sector, a 2012 Nielsen report says: “While metros will remain a staple for marketers and increasing a rural footprint will be critical for volumes in the long run, there is a growth opportunity that is vastly under-rated by many marketers today, which could emerge as a key growth engine for the next 10 years. Middle India, a region made up of approximately 400 towns each with a population of 1-10 lakh, are home to 100 million Indians.” It further says: “These cities are ready to behave like the metros of tomorrow. The annual per capita FMCG consumption of Middle India towns touched Rs 2,800”, which is much higher than the national average of Rs 1,600.

Maintaining eCommerce Sites by the Third-Party Provider

Creating an attractive and functional eCommerce site is quite a challenging task. However, a third-party eCommerce provider will make this task simple for you. They offer site set up and maintenance to entice businesses. For instance, some of the third-party eCommerce site providers do not charge any transaction fees once the items are sold. Instead, they offer monthly plans.

Besides, the emergence of digital services is gradually proving to be the leading driver for eCommerce growth. The rise of portable mobile devices and advanced videos is increasing the desire of the consumer to spend more time researching online for price matching and ultimately on their buying decision.

Localisation of Internet content

Google India spokesperson says that web content search in Hindi has grown a whopping 155 per cent in the past year, which is significantly higher than the growth of content search in English. Hindi content searched through mobile Internet grew at even higher rate of 300 per cent in the same period. Growth in traffic in other languages, too, was impressive.