E-Commerce Opportunities in India

After several years of consumer use, e-commerce has fully arrived in India. While many people still prefer to shop at local mom-and-pop shops, shopping online has become an accepted practice. People know they will receive what they buy online, that it can be returned if necessary, and that the companies involved are reliable and can be trusted.

E-Commerce Differentiation

Among e-commerce businesses now, the emphasis is on differentiation. One major differentiator is speed. For example, in the early days of Indian e-commerce, it was very difficult to buy a homemade pickle and get it delivered before the product spoiled. But now, companies have figured out how to make same-day delivery possible from as far away as 300 or 400 kilometers. In Bangalore, some companies are boasting that they can deliver something in 10 minutes. So now there is a great focus on the technology needed to make possible and manage ultra-fast deliveries. Companies are thinking of the tech stack they need to build that can address not only customer-facing issues but also the operational issues required to make quick deliveries possible.

The pandemic has helped speed innovation in e-commerce because it changed payment preferences. The longtime preference for paying in cash and antipathy to paying online has reversed itself. In big cities, most people now realize that paying online is safer, easier, and faster than paying with cash.

Scaling E-Commerce for India

Of course, building all the necessary capability costs a lot of money. To earn an adequate return on the investment required, a company needs scale. So, all e-commerce players in India are intent on building scale, especially large companies that face big compliance costs and responsibilities. Smaller players have it easier. While they still must comply with government regulations, they can do many things faster, and compliance can always follow.

The investments in e-commerce technology have had the interesting result of unifying the country in some ways. Companies are seeing that people in smaller cities have the money and phones to buy online and want the same things that people in the largest cities are buying. They also want the same level of service that people in big cities receive. The technology also is expanding the access of smaller companies to the big cities. One small-town grandmother, for example, has a place called Lucky Sweets, which is very famous. People in Delhi want its products, and nobody cares that the sweets come from out of the city. In that way, e-commerce is bringing us together — and it’s doing that despite the country’s many languages.

The large e-commerce players can present their offerings in all the local languages. Since nearly everyone has a smartphone, the interface can be localized. Even the products offered can be localized with favorite local brands to complement the national or international brands being sold.

E-Commerce Technologies

For start-ups considering the technology they will need, the most important thing is to be clear about what you are doing. Are you going to be an aggregator, or will you sell directly to consumers? Are you going to buy and supply or produce and supply? Each role has a unique set of challenges.

If you are an aggregator, you’ll be investing more in supply chain empowerment. If you sell directly to consumers, you should plan on how you will be in the face of the consumer as much as possible. Unless a consumer has given you three or four orders, they tend to forget you. You need their stickiness, and that requires investment. Either route requires concentrating on serving the precise market that has been defined and not migrating away from it. You can’t do everything for everybody. You must stay focused.

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About Deepak D. Prakash

Most recently Chief Business Officer at Instamojo Technologies, Deepak D. Prakash is an experienced e-commerce executive. At Instamojo, a payment gateway solution, he was part of the leadership team building the e-commerce platform and was responsible for acquiring merchants of all sizes and building a sales and support ecosystem.

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This e-commerce industry article was adapted from the GLG Roundtable “Uncovering Opportunities in the India E-Commerce Enablers Space.” If you would like access to events like this or would like to speak with e-commerce industry experts like Deepak D. Prakash or any of our approximately 1 million industry experts, please contact us.