4. 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 experience. Involvement of strong brands such as Amazon has played a role in engraving trust for online shopping among consumers. These brands have a great reputation in different countries; hence consumers feel safe while dealing with such companies. The presence of strong marketing campaigns has also played a significant part in this realization. When people keep seeing something every now then, they get curious. In the long-run, they end up giving it a chance, and if the experience is good, they become habitual users.

4.2 Customer Profile/Demand Analysis

India has not yet “matured” when it comes to online shopping. This brings the question whether namshi.com will be accepted by the masses. One thing that is clear is that e-commerce has revolutionized the way that business is conducted in the country. Most people are embracing the concept in their everyday activities. This is a favorable moment to join the industry since most of the consumers conducting online shopping for the first time have not yet established their preferred company.   Namshi.com offers a convenient and attractive shopping option hence it is likely to bring a favorable appeal on the side of consumers. This will mean that it can capture a sizeable market share if it devices an appropriate entry strategy.

Indian consumers are known for their trust issues when it comes to quality of products that they are purchasing. This has been among the reasons why some people are yet to embrace the concept of online shopping. Namshi.com is likely to traverse this notion based on the products that they offer to their consumers.  It has the reputation of offering both international and local fashion brands. International products entail popular footwear brands such as Adidas, Nike, Lacoste, Skechers, Timberland, Puma among others. Designer brands such as BKNY, Michael Kors, Calvin Klein, Tory Burch, Tommy Hilfiger among others are also included in the company’s offerings (Dixon 2016). These are brands that have already made a name for themselves. This means that people trust these brands, and are likely to purchase without feeling skeptic. This aspect will enable namshi.com to prevail among the online shoppers.

Most consumers in the country also like to pay for goods after they have been delivered. This is a model that namshi.com offers in most of the markets that they operate in. The concept will auger well with the Indian population because they will feel safe while transacting with the company. The trust issues that are usually prevalent will have been eliminated since people will pay once they have seen the products that they have ordered.

Preferred mode of payment by India’s online shoppers

Source: yourstory.com

The population of India is currently experiencing an improvement in the standards of living. This means that there is sufficient amount of funds that can be used for the sake of purchasing various fashion accessories. In recent years, explosive growth in the usage of smartphones has been experienced in India. The young adults have embraced this concept more. This means that they spend a significant amount of their time browsing the internet. Their probability of making online purchases is, therefore, high. Almost 80% of Namshi’s purchases come from mobile devices. This is to show that the company is well in line with the liking of the Indian population (Dixon 2016). Almost 50% of the online purchases made in India take place through mobile devices. Namshi also concentrates on targeting consumers within the 20-something age cohort. Such consumers are likely to make their purchases online hence they are very likely to embrace the concept being offered by the company. Namshi is also very active on its social media platforms. This will enable them to connect with the young adults since this is where most of their online buying decisions are made (Dixon 2016). This is without mentioning that online platforms such as Namshi are known for offering competitive price compared to the brick and mortar stores.

4.3 Competitive Situation

Entry of large retailers such as Amazon has helped in bringing the desired credibility and investment into India’s fashion e-commerce industry. The Indian population is embracing online shopping at a favorable rate. E-commerce has managed to bridge the gap and bring fashion closer to the consumers that are in smaller markets. Through online stores, there is convenience when it comes to accessing a variety of styles and brands across all price-points, in one place with a click of a button (Joseph 2015). This has resulted in significant growth of the e-commerce fashion industry. As a result, several retailers have joined the market in order to share the profits. This has intensified competition in this industry.

As a result, Namshi will be joining an industry with competitors that have already established themselves. Among the major players in the fashion sector there is Limeroad, Myntra and Jabong. Other niche players in the segment include Mr. Button and Creyate. Caratlane also joins as one of the best dealers when it comes to online jewelers. The huge opportunity that has been created by the fashion e-commerce market has also promoted big names such as Tata, Reliance, Birla among others to take their businesses online. Reliance entered the e-commerce market with the objective of becoming the leading online luxury fashion.

These retailers have already captured their market share, and are quite knowledgeable on matters regarding the Indian market.  This would lead to the notion that Namshi would have a problem in joining the market, but that is not the case. One reason that will make Namshi prevail despite being a new entrant is that e-commerce in the fashion industry is something that is still developing. There are a lot of people that are yet to join, and they are likely to follow suit based on current statistics. Sales in this industry are increasing with every year, something that has been projected to continue for the coming years. Namshi tends to put a great emphasis on localization. This means understanding and respecting the cultures of the countries that it works in (Dixon 2016). This will go a long way into convincing people to purchase their product since they can identify with their values. It might seem like something simple, but it carries a lot of weight on the side of consumers.

Namshi also offers internationally recognized brands hence it will not need to convince consumers since they are already familiar with the brands. The company should also bring the concept of allowing cash on delivery in India as they do in other markets since it will help in dealing with competition as it acts as a form of guarantee to skeptic buyers.

References

Dixon, Lucy. 2016. “How Namshi Has Grown To One Of The Region’s Biggest Online Fashion Retailers”.Businessreviewmiddleeast.Com. http://www.businessreviewmiddleeast.com/technology/515/How-Namshi-has-grown-to-one-of-the-region’s-biggest-online-fashion-retailers.

Joseph, P. T. 2015. E-Commerce: An Indian Perspective. 5th ed. New Delhi: Phi Learning.

Nair, Athira. 2016. “Indian E-Commerce To Hit Rs 2,11,005 Cr In 2016: IAMAI Study”. Yourstory.Com. https://yourstory.com/2016/06/e-commerce-iamai-211005cr-2016-study/.

Purple Stores. 2016. “Fashion E-Commerce In India: The Present And The Future”. Onlinesellertips.Com. http://www.onlinesellertips.com/fashion-ecommerce-in-india-the-present-and-the-future/.

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