Millennium Post

After 2014 battles, nation braces for all-out e-commerce war this year

In the process, these e-retailers rubbed the brick-and-mortar traditional retailers wrong way in 2014 and are facing charges and investigations for alleged unfair trade practices.

Still, no one has any doubt about future growth prospects of the e-commerce market in India and experts believe that the country may see many more billion-dollar entities in this space during the new year 2015, while expanding the size of this over $3-billion marketplace.

The passing year saw big investors from India and abroad putting their money on various e-commerce ventures, which got funds to the tune of $3 billion from individuals, companies and private equity firms.

The industry players expect the fund inflows to continue, or may be get stronger in 2015 as well.
"With large scale global investments, growth of niche category e-commerce firms and the entry of global competitors/ brands, e-commerce landscape in India looks very promising," homegrown online marketplace major Flipkart Co-founder and CEO Sachin Bansal said.

Today, India is one of the fastest-growing e-commerce markets in Asia/Pacific along with China. With increase in internet penetration, adoption of smartphones and lower data rates, the way India shops is completely changing, he added.

Kunal Bahl co-founder and CEO of Snapdeal said that e-commerce sector saw phenomenal growth this year and is changing the way people shop.

"We are focused on delivering the best shopping experience for customers. We are investing heavily on logistics and our platform so that consumers have a richer experience," he added.

Analysts say the online shopping space in India is expanding at a massive scale and the journey is not yet over. Consulting firm PwC's India Technology Leader Sandeep Ladda said the e-commerce sector has seen unprecedented growth in 2014.

"It was driven by rapid technology adoption led by the increasing use of devices like smartphones and tablets and access to the Internet through broadband, 3G, etc, which led to increase in online consumer base," he added. Furthermore, favoured demographics and growing Internet user base helped in aiding the growth. In terms of major highlights, growth shown by homegrown players like Flipkart and Snapdeal and the huge investor interest around these companies showed the immense potential of the market.

Also, in terms of funding, renewed market sentiments post the formation of the new government helped and overall business confidence significantly improved, Ladda said.  Research firm Technopak's Associate VP Pragya Singh said 2014 was an inception year for the e-commerce space with intense competition and investor interest.

"Players had an urgency to scale up and grab leadership positions. Leaders are beginning to emerge," she added. Apart from the traditional online formats of retail and lifestyle, newer online business segments like classifieds, real estate, grocery and healthcare have also become popular and will continue to gain traction, he added.

Going ahead, Singh said the market will see leaders emerge more clearly as the competition will intensify.

Besides, niche players will evolve as well as the logistics will continue to evolve. Also the sector might see consolidation, she added.

Along with online shopping, online payments industry is also witnessing a strong growth. The further development of online payment and mobile commerce offers great opportunities in 2015 as well.

For consumers in small towns and cities across India, mobile devices will be the only contact point in their evolution towards becoming online customers, while others in big cities will use smartphones along with computers.

Payment solutions provider Oxigen said journey of online payment mechanism was primarily driven by cash-on-delivery as it accounted for a major share contributing to the sales. E-commerce and payments brands significantly encouraged transition and transactions flow through mobile application as a platform, Oxigen Services Deputy MD Sunil Kulkarni said.

"The 3 key e-commerce players — Snapdeal, Flipkart and Amazon — with their special schemes pushed for traffic from online to mobile application resulting in tremendous traffic shift," he added. In 2015, he said that mobile is expected to be a major platform in view of smartphone population touching 100 million users including Android, Windows and iOS.

PayU co-founder and CEO Nitin Gupta said 2014 saw an increased number of payments happening through mobile devices.

The number increased 2-3 times from 2013 levels and now mobile devices account for 35 per cent of total transactions.
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