1. E-commerce market to reach $6 bn in 2015

E-commerce market to reach $6 bn in 2015

The growth is pegged by a rising number of Internet users and lucrative offers by e-tailors

Updated: January 1, 2015 11:08 AM

E-commerce has revolutionised the way we live our lives today. It is the fastest growing sector in India and according to Gartner, the e-commerce market is expected to reach $6 billion in 2015—a 70% increase over 2014. The growth is pegged by a rising number of Internet users, advances in cloud computing and mobility, a secure and convenient online payment system, lucrative offers by e-tailors, a robust 24 x 7 delivery system and a burgeoning start-up ecosystem.

So what does this mean for e-commerce players or start-ups? With a highly competitive marketplace, companies that can quickly react to opportunities will beat competition. For e-commerce firms, this starts right from the time of seeding the idea and developing the product. There is high reliance on IT to create the product and get development environments off the ground—this can take weeks or months. During this time, utilisation of computing varies—on average, utilisation rates can be 10% or lower. Here, cloud solutions, and specifically platform-as-a-service (Paas) can be a great option since it provides access to a shared pool of resources, enabling higher resource utilisation, there enabling firms to get their solution to market faster and at a lower rate.

There is stiff competition in the industry and e-commerce players are stretched thin to stay profitable and balance back-end challenges while sprinting to deliver engaging, consistent user experiences. During an online sale, if an application is slow or the site freezes, the customer will abandon their shopping carts. An outage now is the equivalent to barring customers from entering a physical store. The social media backlash
regarding site failures and application crashes is immediate. This can not only impact immediate sales but also longer-lasting brand impressions.

In this context, the question e-commerce firms must answer is —is it sufficient to plan and invest in IT resources only for the average daily workload and just endure the ramifications of periodic spikes? Or is it better to over-allocate processing capacity, knowing that on most days they are paying for unused capacity? For many in the industry, neither option is good. A better solution is to use technology that can dynamically scale to absorb workload spikes, but shrink after the workload reduces to normal levels. That is why one sees a growing number of e-commerce sites including Makemytrip. com, Jabong.com, Bookmyshow.com etc. use cloud computing solutions. It allows them to strike the right balance, allocating appropriate capacity for normal workload while being able to capitalise on surges in demand.  Additionally, the pay-per-use model of cloud computing brings in cost efficiency in a space where profit margins are too thin to survive.

Contextual marketing is the next critical thing for e-tailors. Instead of assuming that customers will visit their website as against that of a competitor, they can track those customers across a variety of digital devices and serve up the right information at the right point in time through e-mail campaigns, search engine optimisation (SEO), search engine marketing (SEM), onsite search, and customised landing pages.

Business analytics is another area benefitting e-commerce players. Using analytical tools an e-commerce player can help tailor product-related recommendations and match each shopper’s current needs against their merchandising strategies to present customers with the right suggestions, at the right time, through the right channel.

Personalisation is the key. They need to leverage all customer data across their organisation to deliver highly relevant information on the customer’s landing page to convert shoppers into customers.

India is still at a nascent stage as compared to evolved e-commerce markets such as China and North America. By investing in the right people and technologies e-commerce players can have a promising 2015.

By Shailender Kumar
MD, Oracle India

Tags: E Commerce
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