e-Commerce has transformed the way business is done in India and offers the power to create innovative, sustainable, consistent and seamless shopping experience across all channels.
The CII-Deloitte Report on “e-Commerce in India – A Game Changer for the Economy” is a thought leadership publication that presents the e-Commerce landscape in India with key trends and brings forth the point of view of major stakeholders in the Indian e-Commerce industry. It also highlights the significant challenges faced by these stakeholders and key recommendations that will help strengthen this nascent industry to scale and sustain.
According to Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry, “E-Commerce industry has been directly impacting the MSMEs in India and has a favourable cascading effect on other industries. In the long term, it has the potential to generate employment, increase export revenues and enhance tax-collections”. Lauding the efforts of the Government to boost the growth of e-commerce sector in India, he says “CII is committed in its endeavour to modernize and improve sustainability of the sector.”
About the Report:
The e-Commerce B2C segment has grown significantly leading to creation of many Unicorns. However, the focus of Investors going forward seems to have shifted to profitable growth to achieve a stabilization of the economic model. Simultaneously, the e-Commerce B2B segment is showing signs of rapid digital adoption which is likely to feed the significant rise of MSMEs and entrepreneurs.
While the e-Commerce space has rapidly evolved, several challenges have surfaced primarily in areas of taxation, logistics, payments, internet penetration and skilled man power.
The lack of a uniform tax structure leads to issues such as double-taxation or impediments in the free flow of goods across the country. The ensuing Goods and Services Tax (GST) is expected to help in overcoming these challenges through a uniform tax structure.
Third-party logistics service providers have entered the e-Commerce space to provide customized last-mile deliveries. Increasing logistics costs related to last-mile delivery, especially on account of return orders, requires innovative and analytical-driven models that will enhance operational efficiencies in the logistics value chain.
Cash-on-Delivery (CoD) continues to dominate the payments for e-Commerce sales in India. Mobile wallets, mobile internet and the implementation of the UPI are expected to give further impetus to digital payments and cashless CoD transactions.
The Government of India has recently announced flagship programs like Digital India, Make in India, Start-up India, Skill India and Innovation Fund. The timely and effective implementation of these programs will support the e-Commerce eco-system to overcome challenges related to ineffective rural internet penetration and lack of skilled manpower.
Some areas which could facilitate a conducive and favorable e-Commerce ecosystem are deeper internet penetration, a robust infrastructure, promoting smart technologies, reducing counterfeits, enhancing data security, amongst others.
As the digital eco-system evolves in India, e-Commerce companies on their part need to continually innovate, embrace digitisation and analytics to remain relevant. In order to differentiate, e-Commerce companies will have to, in parallel focus both on business-as-usual and also on disruptive growth towards building legacy firms.
New Delhi