Last year was interesting for e-commerce, with companies expanding services, global expansions becoming a reality, consolidation playing out, and players being funded to create deeper pockets.
By Ankur Pahwa/ Partner & national leader, E-Commerce & Consumer Internet, EY India
Last year was interesting for e-commerce, with companies expanding services, global expansions becoming a reality, consolidation playing out, and players being funded to create deeper pockets. While headlines were dominated by Walmart-Flipkart, Udaan reaching unicorn status at lightning speed, Bengaluru ranked in top-3 cities globally for the launch of tech start-ups, significant strides were made in creating new avenues and approaching existing/established sectors with the intent of driving innovation and growth. Here are a few trends we are likely to witness in 2019.
* All data is good data: Data consumption in India is at 8GB per month per subscriber. It generates huge opportunities for data-led personalisation that enhances customer experience and improves conversion rates. In India, with varying preferences—sensibilities, languages, taste, behaviour—businesses have been able to tweak products and services with degrees of success. With user data, businesses can cater to individual preferences and also see what is working in a segment/region, down to a level of detail that was earlier not possible. This will lead to greater degree of personalisation and lead to more usage, satisfaction and penetration.
* Here, there, everywhere: Online-to-offline and offline-to-online is becoming relevant. While India’s retail space is dominated by physical stores, we are witnessing bigger brands take the omnichannel approach that provides for confidence and assurance of the offline world and the ease and convenience of the online world. This helps companies allow for greater reach by creating multiple touchpoints with a consistent and unified experience of the brand.
* Star tech is the future: A few years ago, words like AI, AR, VR, IoT, cloud, blockchain were heard in tech conferences, not in daily conversations. We are seeing adoption of these in e-commerce businesses, effectively transforming the interaction between customers and brands. Virtual tours, smart mirrors, AR-based learning, 3D modelling, automation, smart home devices are examples of the things to come.
* Speak the lingo: English and Hindi power e-commerce in India. But most of these speakers are already online, and for successful interaction with new users, businesses need to provide services in local languages.
This will provide for easier adoption of digital services, information sharing, and creation of a larger customer base. Voice search is another trend that will enable access for products online. There is a need for players to optimise voice listings. Another trend will be image search enabled shopping. Language, voice and picture will be the levellers to bring down barriers for adoption.
* Network effect—it pays to be social: Social commerce takes advantage of the tight social fabric and entrepreneurial spirit we have. With WhatsApp and Facebook, influencers are acting as resellers of products within their networks. Since influencers know the people they are selling to, they also have an advantage of knowing their preferences and style, and recommending products. This area of e-commerce helps target those customers who are not comfortable shopping online. Language will be an important enabler here.
* Go deep, go wide—Bharat beckons: While some are going deeper into top-100 cities, others are addressing untapped markets, and the major hurdles here are volume and logistics. New e-commerce players helping make rural a lucrative opportunity. With limited availability of branded products coupled with the aspirational rural population, entrants should see their efforts rewarded.
* Bundle of joy: A disadvantage of inexpensive smartphones is the lack of storage space. Some companies are starting to turn this to their advantage—bundle it all, aka super aggregators. Companies are providing a single gateway to a host of online services. This helps users who are not comfortable with varying interfaces—super aggregators provide for a unifying experience while providing services.
* B2B—the unheralded segment: Unlike B2C—where decisions are driven by impulse, popularity, aesthetics—B2B marketplaces are driven by price and margins. Digitisation of supply chain ecosystem along with leveraging AI, analytics around buying behaviour, technology-driven inventory management allows for a more customised experience and quicker turnaround. B2B sales already outpace B2C sales in the e-commerce market, and this trend is likely to continue.
The wireframe of this digital network has been taking shape and the launchpad for faster trajectory is in place, and these are interesting times for the sector since the enablers of digital adoption and growth are falling into place.