E-Commerce is one of the fastest growing sectors in India. The market size is expected to reach INR 3,500 billion by 2025. This fast growth is aided by a number of factors such as increasing internet penetration even in the hinterlands of the country, increased use of smartphones, governments focus on digitization of payments and liberalisation of FDI policy and shift in people’s mindset to buy products online due to increased convenience and sometimes lesser cost.
However, the sector still reels from major challenges, which must be overcome to continue the sector’s high growth trajectory.
India, Cash on delivery is the preferred payment mode:
In India, most people prefer to pay cash on delivery due to low trust in online transactions, and low awareness about online modes of payment, especially in remote areas. While government’s thrust of digital payments has changed this mindset to certain extent, cash still remains the preferred payment mode, and this adds to the cost, as manual cash collection is quite perilous, expensive, and laborious.
Internet Penetration is Lower than most Western Countries:
In India, Internet penetration is quite low as compared to several countries like the USA, UK, France etc. Moreover, the quality of connectivity is low in various regions. While this problem has been addressed to a great extent, it is still a work in progress, and high internet penetration with excellent connectivity is vital for the E-Commerce industry to grow. In a few years, this challenge is expected to be surmounted.
High Rate of Return of Items Purchased Online
Many customers are not sure what to expect from E-Commerce. Many people order online but after receiving the product, they don’t find it that great, or perhaps they buy just for the sake of it with the intention to return later. For E-Commerce retailers, managing returns are extremely expensive as it shows some unique challenges and it becomes more difficult in cross-border E-Commerce.
Postal Addresses are not consistent
Postal Addresses are often incomplete, or do not give the exact location. This becomes a major challenge for E-Commerce companies as the products are delivered by post or courier. If a parcel remains undelivered or returns due to incomplete address, it is an added cost burden.
Supply Chain Issues
Timely delivery is a major challenge faced based upon the infrastructure, location, and unavoidable roadblocks during transitions. Problems like late deliveries or damaged products are unacceptable to the customers, and lead to order cancellations and returns which cause a huge loss to the sellers.
While some of these challenges are endemic to the industry and shall be overcome only with time, Acutas can help online retailers overcome many of the challenges. With our best in class fulfilment services, warehouses at strategic locations across the country, timely payments and excellent returns management, our partners can scale their online business without getting into the minute details. This enables our partners to concentrate on their core strengths, while we leverage our experience to grow and manage their online business.
