E-commerce Industry

e-commerce  industry in india:E-commerce had a standout year in 2016, when it grew in size — from $5 billion to $8 billion — and pervaded every aspect of our lives. In 2017, it will grow further and sink deeper into our lives, albeit in a different form. The industry is set to become more 'm', or mobile, than 'e' commerce. That means more users. No doubt, more users will help companies build scale, but they will embrace a few changes themselves.

Here's a look at 7 key trends for the Indian e-commerce industry for the year 2016...

fewer discounts in companies will go after profitable growth rather than wooing customers with deep discounts (in other words, running on losses). A bigger user base will just be the cue for companies to reduce discounts and focus on profitable growth.

"Building scale won't be a challenge for the large players," says Sandeep Aggarwal, founder, Shopclues. Six of the large e-commerce players — Flipkart, Amazon India, Paytm, Snapdeal, eBay.in and Shopclues — together have about 85-90% of the e-commerce business in India.

Cash on Delivery to decline:

Cash on Delivery (CoD), a preferred mode of payment for many customers, will decline as more and more people familiarize themselves with using payment wallets to shop and pay bills.

More transactions:

"There were 50 million transacting users in 2015. This year, it will be at least 75 million," says Rajan Anandan, managing director, Google -- South East Asia and India.

He sees more users coming via smartphones. In China, for example, users browse on the desktop, but they transact via smartphones -- due to quicker linkages to payment gateways.

Newer categories:

Companies will have their hands full as more users come on board, but they will be up to the task of serving the needs of customers. That will lead to the emergence of new categories of services -- like delivering even milk and water -- which Paytm founder Vijay Shekhar Sharma believes "will replace the neighbourhood store." "You won't need to step out to shop."

Synergy between online and offline:

Brick-and-mortar will not disappear, but "there'll be more fusion between online and offline services," he adds. Here is a tantalizing possibility of how this and then walk down to the store to pick up the product selected.

"Self-logistics will be an option," says Sharma. ShopClues' Aggarwal says the ecosystem is healthier and is maturing. "There will be higher adoption of m-commerce and mobile wallets."

Survival of the fittest:

For companies, it will be a year of unit economics and strong focus on (profitable) customer acquisition, revenue and margin, says Anandan. "Only the fittest will survive." Anandan believes that unlike 2015, which saw multiple players in each category — in food, there were 20-plus startups for instance — 2016 will see the going getting tough for smaller players. "I don't see any major funding squeeze but it won't be easy to get money," Anandan adds.