E-commerce in India far from being a bed of roses!

We are all aware of the rapid growth of the e-commerce market in India and its magnetic effect on the technocrats and entrepreneurs in the country. Our growing economy, abundant experts and educated manpower, ample opportunities and rapidly emerging market sets the pertinent environment for the e-commerce. With an internet penetration, although less in comparison to our population of 1.2 billion, is favourably brisk currently.

Well, in spite of this favourable ground and the glorious side of the e-commerce industry – the fantastic growth and a luring environment for entrepreneurs and such highlights however, there are challenges prevailing responsible for the lag in the growth.

Most product purchased online are returned by the Indian customers

 There exist many first time buyers, hence it clearly implies that they are not certain and lack clarity on what to expect from the e-commerce websites. They at times are subjected to hard sell and on delivery of the products they express their grief and return the purchased item. Not to rule out the fact that this is specific to India but such instances take place more in countries like ours, where the major growth is banking upon new buyers. This return of goods becomes challenging for the e-commerce player and the complexity only doubles due to the reverse logistic in case of purchases outside the country.

Customers often prefer cash on delivery payment mode

Online transactions lack faith of the customers and also due to low credit card penetration cash on delivery becomes the preferred payment option in our country. Collection of cash physically is a risky, laborious and an expensive affair as opposed to electronic payments.

High failure rate of payment gateways

Cash on delivery is also preferred as payment gateways of our country have high failure rate in comparison to the international standards. It also results on losing out on the business as few customers drop the idea of retrying the transaction process if it fails once.

Low Internet penetration

There still remains a vast majority where Internet penetration is lacking in comparison to western countries, and it remains only a small fraction of the population. And to double up the quality of connectivity is poor in quite a few areas. However both these problems are soon overcoming!

Smart phones still not used by majority

Despite the fact that the number of people using mobile phone in India is very high, but a significant majority still hasn’t swapped to smartphones and use feature phones. Hence this implies a significant number is incapable of making e=commerce purchases on the move. Although in a couple of years this problem we will overcome as a result of lowering of prices for the entry-level smartphones.

Verifying the postal addresses

Once a customer makes an online purchase, the buyer usually gets a call from the logistics company to know their precise location. Hence the address is not enough. This is due to lack in standardization in the way postal addresses are written.

Most Indian towns remain inaccessible

Apart from the lack of standardization in postal addresses, there are thousands of towns where accessibility is difficult or they remain inaccessible. Only the Tier 1 cities and other major urban centres enjoy a good logistics infrastructure. But since the pull of the e-commerce in Indian market is banking on the large population, the accessibility challenge is a major setback. This problem is only doubled with cash on delivery a preferred mode of payment in India.

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