Times are changing in India. The population is swelling, and so too is its use of the Internet for more and more facets of everyday life. We investigated the rise and effect of social media in India in a previous post, but what was not discussed was how the economy of the subcontinent is being digitized just as much as its social space.
Whilst the west has embraced ecommerce with open arms, enabling retail monoliths such as Amazon and eBay to grow and grow, Indians have not been so trusting of online shopping. Astoundingly, the majority of online sales in India still take place using cash on delivery, where the buyer pays the courier at his door.
As K Vaitheeswaran, founder and CEO of Indiaplaza quite rightly notes, ‘people shop online for three reasons: selection, pricing and convenience, nothing else. Cash on delivery basically knocks the last one out of the park.’
There is little doubt that cash on delivery is here to stay in India, but nowadays as consumers become more trustworthy of online retailers, the number of traditional credit or debit card sales are rising. In Europe and North America, consumers have benefitted from the protection afforded by online payments with credit or debit cards for many years. It is likely that India will eventually follow this direction.
Small businesses in Mumbai have already been hit by the online retail phenomenon, and have had to become used to customers requesting discounts to match those which can be found online. For many small businesses, the only way to compete may well be by embracing online retail too. Not only that, but as more and more businesses enter the online retail space, they will be made to find their niche and offer higher and higher quality goods.
The stage is set for ecommerce in India, and many believe that its time has already come. Those who do not generally think the day will come soon when the Indian consumer opens his or her browser rather than heads for the brick-and-mortar store.