India is the fastest growing internet market in the world with an internet penetration close to 10%. E-commerce is definitely poised to emerge as the preferred mode of shopping for Indian internet users and this past year we have already seen it going mainstream for most net users in India.
The year 2012 essentially saw many new consumers, who were once wary of buying online, try out online shopping and, more often than not, come back for more. The coming year will see this trend increasing, as more and more customers discover the convenience of buying products from the comfort of their homes and offices.
Additionally, the range of products they get without having to visit multiple stores will just continue to grow until almost everything imaginable becomes available online. As choices and availability increase, so will various channels for online shopping. E-commerce will no longer be restricted to just the personal computer.
We see 2013 as a big year for mobile commerce. This past year, mobile shopping has experienced exponential growth. As mobiles continue to be the only medium of internet access for a large customer base, the revenue from m-commerce will continue its upward spike. Its early days yet, but the potential is huge. E-commerce firms should look at leveraging their technology strength and knowledge of consumer demographics in improving the mobile shopping experience to capture this market.
Another platform for online shopping that will be looking to come into its own will be social commerce. It has been a fast emerging channel of business for a number of brands in the international market.
The domestic market is yet to really exploit this medium. However, platforms such as Facebook and Pinterest are being recognised as being more than mere channels of engagement and online retailers are exploring these mediums for ways of advertising to a socially connected consumer base and, in some cases, even inducing sales.
While its true that these trends may be driven by an internet savvy crowd, the influence of such developments on those who have been predominantly offline shoppers is not far away. The online revolution has been encouraging more and more retailers to shift to online formats and with this we have been seeing a movement amongst consumers as well. In a kind of evolution, standalone stores have led to malls and now that is morphing into a virtual mall culture that has spread its wings to tier 2 and tier 3 markets as well. Consumers here have more disposable income today and an increased exposure to quality brands. When this awareness and purchasing power is coupled with the restricted choice in offline retail in these cities it translates into an immense opportunity waiting to be tapped by the Indian e-commerce industry.
The difference in revenue earned between the urban and rural market is thinning rapidly and if this continues, then very soon the rural market will overtake urban markets in terms of the revenue it brings to the e-commerce industry. Features such as the cash-on-delivery payment option will provide a further fillip to this trend.
Apparel and electronics will be the biggest growth drivers across different categories for e-commerce in India. The digital content space is another category to watch out for in the year 2013.
The undeniable result of such a boom in e-commerce is, of course, the emergence of a number of players in the market. We have already seen this happen in 2012 with customers being able to choose from a wide range of online outlets, both in the niche and mass category space. 2013 might be the year we see consolidation in the online shopping space as players combine their respective strengths, thus contributing to the improvement of the overall e-commerce eco-system. This can only spell good news for the end-user as offerings and services become smoother and more comprehensive.
And this is something I have always maintained is the core to the growth of any industry the focus on the end-user. Trends are ultimately decided by the customer. E-commerce companies can take a giant leap in reaching out to their customers through various modes of personalisation. Understanding customer requirements and aligning the brands offerings to these preferences will be a vital aspect in ensuring top-of-mind recall in a brand heavy market.
The author is CEO of Flipkart.com