India’s E-commerce Market

  1. Service Factors

4.1 Service Analysis

India’s e-commerce market remains to be underdeveloped since the digital commerce amounts to a smaller piece of the total retail sales in the country. However, this aspect is likely to change based on the current trends. People have started to embrace online shopping in the country as the number of consumers that purchase their products online for the first time continues to increase. In mid-2015, the country had over 350 million people using the internet. By the end of 2016, the number is expected to be over 500 million (Joseph 2015). Based on these figures, it is apparent that e-commerce penetration in the country is quite low compared to leading markets such as the United States and France. Despite the slow growth, there is a notable increase in the number of people that have embraced online shopping in India. Every month there is around 5.5 million new entrants (Joseph 2015). With this industry, growth seems to be at an inflection point.

According to Assocham study paper, in 2010, India’s e-commerce industry was estimated to be worth around US$4.4 billion. There was a significant change in 2014 since it was now valued at around $13.6 billion. There is estimation that sales in India emanating from e-commerce will reach around $38 billion by the end of 2016 (Purple Stores 2016). The growth is expected to increase as the years pass by. This is because more people will continue to embrace the use of the internet, while others get more information about online shopping. China and other western markets have realized a slowdown in their economies, but India is expected to actualize a healthy GDP growth rate due to various infrastructure investments and current economic reforms. Also, India has a huge population that comprises a young median age. When this cohort joins the labor force, they will be adding to the country’s expanding consumer class.

There are various factors that have resulted in the growth of e-commerce in India and will continue to push the industry even further. Among them is the increased number of Internet users. The internet has become an essential element for the metropolitan Indian populace. The driving factors have been the decreasing broadband subscription costs being experienced in the country. The introductions of the 4G services have also seen an increase in the number of people that use the internet (Joseph 2015). Availability of reliable and faster delivery options have also played a part in ensuring that e-commerce is gaining popularity in the country. Ordering an item and getting the delivery within 24 hours based on an individual’s location has come out as a fascinating

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