March 8, 2023 | Supply Chain

In recent years India has experienced a boom in internet and smartphone penetration. This has helped India’s digital sector and it is expected to reach US$ 1 trillion by 2030. This rapid rise in internet users and smartphone penetration coupled with rising incomes has assisted the growth of India’s e-commerce sector.

India’s e-commerce sector has transformed the way business is done and has opened up various segments of commerce ranging from business-to-business (B2B), direct-to-consumer (D2C), consumer-to-consumer (C2C) and consumer-to-business (C2B). Major segments such as D2C and B2B have experienced immense growth in recent years. India’s D2C market is expected to reach US$ 60 billion by FY27 The e-commerce industry has been on an upward growth trajectory thus favouring the best logistics companies in India.. Young demography, increasing internet and smartphone penetration, and relatively better economic performance are some key drivers of this sector. With 830 Mn users, India is currently the 2nd largest internet market.

Close to 100 per cent of pin codes in India have seen e-commerce adoption. More than 60 per cent of transactions and orders in India come from tier two cities and smaller towns. The e-commerce trend is gaining major popularity even in tier-2 and tier– 3 cities as they now makeup nearly half of all shoppers and contribute three of every five orders for leading e-retail platforms. The average selling price (ASP) in tier-2 and smaller towns is only marginally lower than in tier-1/metro cities.

Furniture & Appliances is the largest segment in in India and accounts for 37% of the eCommerce revenue in in India. It is followed by Fashion with 20%, Food & Personal Care with 20%, Electronics & Media with 15%, and Toys, Hobby & DIY with the remaining 8%.)

Since 2014, the Government of India has announced various initiatives, namely Digital India, Make in India, Start-up India, Skill India and Innovation Fund. The timely and effective implementation of such programs will likely support growth of E-commerce in the country.

The E-commerce industry has been directly impacting micro, small & medium enterprises (MSME) in India by providing means of financing, technology and training and has a favourable cascading effect on other industries as well. The Indian E-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest E-commerce market in the world by 2034. Technology-enabled innovations like digital payments, hyper-local logistics, analytics-driven customer engagement and digital advertisements will likely support the growth in the sector. India is also planning to introduce Open Network for Digital Commerce (ONDC). ONDC will enable e-commerce platforms to synchronize search results on all the e-commerce platforms and display products and services from every platform. This will further boost business for MSMEs and help fuel India’s e-commerce growth. The growth in the sector will further encourage employment, increase revenues from export, increase tax collection by exchequers, and provide better products and services to customers in the long term. The top logistics companies in India will be able to cater to the growing requirements of the ecommerce supply chain industry.

  • According to NASSCOM, India’s $14 billion Indian e-commerce market which started as a niche industry a few years ago has been gaining momentum and shows more than 25 percent growth. Online travel is the largest segment with about 70 percent market share, a figure that’s likely to escalate. E-commerce is expanding its reach to the general masses on the back of social media, which not only provides a mechanism for advertising but also for receiving feedback, building brand image, and promoting new launches. Online retailers also use social media to track the first-time and repeat buyers of a product. Social media has become a platform to study consumer lifestyles and spending patterns.
  • E-commerce, driven by digitization and internet penetration in the rural market, is creating huge opportunities for consumers. Competitive prices, deals, and efficient delivery coupled with the convenience of avoiding long queues have completely altered the buying experience. According to NASSCOM, India’s e-commerce market is forecasted to cross a whopping $200 billion by 2030 due to increased analytics, transactions, and internet penetration.
  • Among many other components, product availability is one of the primary drivers that cannot be overlooked. In smaller cities where the consumers may be confined to limited brands and availabilities, online shopping with the flexibility of delivery options and possibility of getting what they are looking for has a wider scope for international logistics.
  • A robust supply chain and a well-established reverse logistics network will enhance the success of e-commerce companies. Top Logistics Companies in India will be able to meet the requirement of the industry in fulfilling their needs.
    Other factors enabling growth of the industry include:
  • Ease of access: Growing internet usage at affordable rates and rise of smartphones lead to easier access. This connectivity enables other services like booking train/hotel/cab/movie tickets; mobile and electric bill payments, etc.
  • Connecting the financial system: People now use e-banking and other schemes. Soon, digitization of the financial system will become the norm.
  • Global reach of home-grown companies: Indian startups in e-commerce industry are utilizing global channels, thereby increasing their customer base and broadening the scope of growth via international logistics.
  • Attracting repeaters: A strong focus on customer service is the prime reason that attracts and retains buyers. Cash on delivery (COD), reasonable pricing, deals & discounts, faster delivery turnarounds with zero prices, and reverse logistics are some of the drivers transforming the industry into a booming sector. Top Logistics Companies in India are equipped to support the industry by providing adequate requirements at the right time and place in need.
  • Leveraging technology for innovation: Information sharing between all stakeholders in the supply chain is very crucial. The integration between various supply chain aspects will help the e-commerce company have an edge over the competition. Some of the initiatives may include the use of bar-coding in logistics systems by the best logistics companies in India: EDI for communicating between partners; visibility into the operations; tracking and tracing of the goods at any given point.
  • Analytics: Capturing real-time data and understanding purchasing dynamics form the crux of this industry. The buying preferences, tastes, and demographics of a customer can be addressed by gathering customer data. The volume and complexity of data require analytics to derive customer insights, optimize channels, and calculate ROI.
  • The future of the Indian and international logistics looks self-orchestrated, reducing human intervention (or ensuring human intervention only at places where it adds value), thus improving efficiency and productivity.
POSTED ON March 8, 2023