1. Despite the larger playing field offered to e-commerce brands, along with positive consumer sentiment towards e-brands, fast technology adaption, increase in willingness on online purchases (up by 67%) and rising multi-million dollar investments in e-commerce products, we are still missing from the global e-commerce map. While the users-by-population ratio seems low, India witnessed one of the highest growths in e-commerce segment at 27% and is the projected to grow at a 21% rate for the next five years.
2. Government favouring the start-up ecosystem
Recent developments by the Indian government — such as SEBI relaxing its regulations for start-ups to list and raise, institutionalisation of policies such as exemptions from service tax and excise duties — have been viewed as major boosts for start-ups. While we are seeing movement on the government front, online retailers still continue to suffer from the increased regulatory burden. Thus, resting greater responsibility on the government to enable an ecosystem that promotes growth and helps India gain its due in the global scheme of things.
3. Growth in a greater variety of segments
Though the e-commerce ecosystem is fast addressing varied needs of the consumers in India, 70% of Indian e-commerce space is dominated by the travel industry — indicating that other segments such as financial services and digital downloads have room to accelerate faster and take on the untapped market in full stride. A few other major sectors that are witnessing slow growth and need the right push include food tech, financial technology and on-demand services among others.
4. Underdeveloped infrastructure and organised retail
In principle, there is no Walmart/TJ Max to beat or Starbucks to disrupt in tier II/III markets – which means various sections of the retail market are waiting to be tapped and captured. One of the biggest propellers enabling growth and allowing a mass-customer-acquisition is the rapid adoption of internet/digital mediums that are aggressively driving the demand for easier access to organised retail in rural areas. Thus, leading to a higher percentage share of digital commerce as compared to global averages in developed economies.
5. Winning the talent war on the global front
India is clearly becoming a frontrunner in the e-commerce space with its wedge formation of young engineers and technologists. India ranks as the second largest programmer community currently and is expected to become home to the largest number of software developers by 2017. Undoubtedly, it is this young talent who are and will continue to drive disruption in this space.
6. The rise of mobile banking
The mobile is evolving into our 24×7 banker, thereby, succeeding in directing the Indian populace, especially the youth, towards the cashless payment route. According to the RBI, in FY15 cashless transactions accounted for Rs 92 lakh core, whereas mobile banking accounted for Rs 1 lakh crore during the same period. While the latter isn’t a great number, there are projections of growth in the mobile banking space due the increasing usage of mobile wallets (which is expected to reach 100 million customers in the next five years).