For a nation to be an eCommerce superpower it needs internet penetration and technology. Industry analysts say that factors affecting growth of eCommerce are rapid rise in internet use, tech savvy population and a rising uptake of mobile phones. Today, India is the world’s fastest growing smartphone market. Due to competition, data plans are cheap and India is also one of the world’s cheapest places to use the mobile internet.
Large Youth Population
There are various trends behind India’s high potential for growth in eCommerce in the next two decades. India is the world’s biggest consumer of mobile phones. With 3G and 4G plans offered at affordable prices, India is expected to see more mobile shopping. The recent introduction of Reliance Jio has caused massive disruption and is expected to further bring down prices of internet and data plans. India has the largest youth population. 70% of its population is under the age of 35 and this group is familiar with mobile and digital technologies. They are keen to participate in the online economy. These tech savvy young people shopping via smartphones are responsible for India’s increasing online spend.
The global eCommerce market is expected to reach USD 63.7 million by 2020. This will open up enormous opportunities for companies who sell online. Recently, Worldpay analysed 30 global markets including India and has said that much of India’s eCommerce growth is the result of rising internet penetration. It reaches about 350 million people currently and is expected to double by 2020. Huge uptake of mobile phones is one of the major factors driving eCommerce growth in India.
Mobile Payment Methods
Transfers and cash on delivery dominate the online payment scope with 27% of the market preferring bank transfers and 22% preferring cash on delivery. As the country’s payment infrastructure develops new methods could rise in popularity. Surprisingly, only 8% of online shoppers use e-wallets currently and the mobile wallet market is expected to reach $5.1 billion in 2020.
India is in the early stages of its eCommerce transformation and many people do not feel comfortable with online payments and mobile payment methods. Hence, in order to position their business for success merchants must recognise India’s potential for eCommerce growth and payment preferences. Leading eCommerce vendors like Amazon and Alibaba have already indicated their interest and are offering incentives for merchants so as to gain a foothold within India’s eCommerce market.