2017 – Ecommerce View on India
2017 – Ecommerce View on India
2016 was an amazing year for the ecommerce sector in India. We have had a number of new innovations, seen the emergence of many new players, experienced a number of consolidations among existing players to stay relevant, seen billions of dollars of investment and finally moved to a cashless economy, thanks to demonetization.
In 2017, we expect to see more of the same. The battle for supremacy between Amazon, Flipkart and Snapdeal will get fiercer than ever before. Jeff Bezos has made it clear that winning the ecommerce war in India is his top priority and has announced investing at least $2 billion in the short term in Amazon India.
Sachin Bansal and Binny Bansal of Flipkart are not holding back. They have acquired Jabong in 2016. Jabong is a leading online fashion brand in India. This follows their acquisition of Myntra, the #1 online fashion brand in India just 2 years ago. Flipkart plans to invest a billion dollars of its own, in order to catch up with Jeff Bezos and Amazon.
Rumors are that Flipkart is lobbying with the Indian government to impose restrictions on foreign direct investment in Indian ecommerce. They say that foreign companies such as Amazon have an unfair advantage over their Indian competitors because of an unlimited supply of capital from their overseas operations.
This is true to an extent. However, one cannot discount the fact that Flipkart has an early mover’s advantage, having been the top Indian ecommerce company since 2009. Snapdeal, for its part, has fallen a bit off the limelight. We haven’t seen any major news from the company in the whole of 2016, but hopefully, 2017 will be different.
There are over a 1,000 eCommerce stores in India that sell everything from electronics and fashion to flowers and industrial products. The Indian eCommerce industry is arguably the most competitive one in the world.
The success of the online shopping industry has been so massive that shopping malls have gone out of fashion in India. Readers may recall that in the period from 2008 to 2014, there was a craze for shopping malls in India, with hundreds of large malls being set up in all cities in India.
Now, because of the demand for online shopping and the growth of online stores, footfalls at shopping malls have dropped drastically. In fact, in 2016, the rents at some of India’s swankiest malls have dropped by 30 percent.
Malls are today considered only good for window shopping, for outings with the family and as a cool place to hang out with friends or go on a date. People do check out the latest electronics products in shopping malls, but buy them on Flipkart, Amazon, Tata cliq and other online stores, where they can avail of the same product for a slightly lower price.
Now, with sites such as CouponClue.com, you can find exclusive coupons for more than 1,000 online stores in India and avail of the opportunity to get fabulous discounts on every purchase. You will find coupon codes, promo codes, vouchers, discount coupons and other amazing offers on CouponClue, why not make the most of it?
Finally, a word on the biggest financial event of 2016: demonetization. Prime Minister Narendra Modi took the most courageous decision in Indian political history when he banned the old Rs. 500 and Rs. 1000 notes on November 8, 2016, thus declaring invalid 86 percent of India’s currency.
There are many reasons for PM Modi to take such a decision, which is beyond the scope of this article. We would, however, discuss the implications of demonetization for ecommerce in India. What we expect to see is the death of the Cash on Delivery option, with more buyers using debit cards and credit cards to make their payments.
This is a net positive for online stores as managing cash was one of their biggest expenses, besides being a security risk. Credit card or debit card payments, or payments made using digital wallets such as Paytm, Freecharge and PayUMoney have simplified a lot of things for online stores.
So we begin 2017 on a positive note. We wish all of our customers a happy and prosperous New Year 2017!
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