Unsustainable business models, discount-driven marketing and lack of product and service differentiation have made India's e-commerce sector a gruelling battleground. Gurgaon-based Wazir Advisors discuss the probable fate of this sector.
The e-commerce segment has caught the fancy of Indian consumers for buying all sorts of consumer items, from groceries, furniture, apparel to electronic products and tickets for movies, trains and flights. The rise of e-commerce mirrors how opportunity is being leveraged by e-commerce companies, even with a relatively small base of 500 million Internet users.
In the last few years, key players like Flipkart (including Myntra and Jabong), Amazon and PayTM backed by big funds have shown a substantial growth in gross merchandise value (GMV). This growth is an outcome of rising middle-class consumers and changing shopping habits that are adding to the online shopping demography. Increased access to global products and services at a click of a button and delivery to even remote locations has further driven up this number.
At the same time, improving internet connectivity and mobile commerce is adding fuel to the fire. The e-commerce companies have been luring consumers to visit their portals, buy and become a repeat customer by aggressive online and offline marketing, high decibel sales events, attractive discounts and deals, exclusive brand launches, cash-on-delivery payment option and easy returns policies.