Indians are known for their ‘street smart’ economic mindset that enables them to find solutions to impregnable challenges despite the constraints.
This is the similar ‘innovative mindset’ which is making Indian entrepreneurs embrace analytics, digitisation, and technology to develop platforms and deliver services and products to the end customer creating a new online buying behavior.
In the context, India’s retail opportunity is substantial and affected by several factors such as the rising standards of living, hyper-connected young population, upwardly mobile middle class, the explosion of social media platforms, deeper internet penetration, and increased smartphone penetration. So, a significant growth of e-Commerce is expected in the next two years.
Gaining Momentum of Government Initiatives
The Government of India has been active in leveraging and embracing e-Commerce digital platforms to transform and organize traditional offline markets such as those of agricultural product. The Government has launched an e-commerce platform to link the farmers with the vegetable markets of various states to sell the agro commodities. Also, flagship initiatives such as Start-up India, Digital India, Skill India, and Innovation Fund are contributing to the growth of the e-commerce industry.
Increase in the Internet Penetration
The e-commerce industry in India has been growing with the rise in the internet penetration due to major improvements in the telecom infrastructure. While the 3G and 4G services are making a way into India along with declining data tariffs, internet data spend is growing significantly. Even when India ranks the lowest in Asia in internet speed, the data rates in India are 3 times cheaper than in the US and 2 times cheaper than in China. Government schemes such as a National Optical Fiber Network (NOFN) can significantly increase the internet penetration in the rural communities as well as provide a means for e-commerce companies to tap the huge market potential there.
Growth in Smartphone Adoption
Smartphone growth has been massive over the years and is expected to exhibit more growth in the coming years. The smartphone’s adoption in India is propelled by several factors such as low prices due to high competition, ease of accessibility to content, and prevalence of internet enabled services. According to a report, India has the highest share of globally 41% of mobile based e-commerce sales. Almost 70-75% of the online traffic of e-commerce sites come from mobile phones, the leading e-commerce companies stated and thus higher revenues are coming from mobile applications like 50% for Flipkart while 70% for Quikr.
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