Trends that will shape India’s ecommerce in 2020

Trends that will shape India’s ecommerce in 2020

With data costs plummeting, the average Indian user is very comfortable spending time browsing through hundreds of options before making a purchase.

India’s ecommerce sector has seen a hockey stick growth in the past few years. From the pioneering days of IndiaPlaza and Flipkart, which had to create the ecosystem from the ground up, to Walmart’s acquisition of Flipkart at a heady $16 billion valuation, India as a market has evolved tremendously.

Currently, the number of Indians with access to Internet is 481 million, an increase of 11.34% from 2016 as per Internet and Mobile Association of India (IAMAI). The number of online shoppers is estimated to be about 120 million as per an ASSOCHAM-Resurgent study; the number of credit card holders is 29.8 million as per RBI numbers. All of these parameters are still growing, albeit at a lower percentage given the higher base. The other building blocks of fulfillment centres, last-mile delivery infrastructure and a wide selection of products are all present. Here are the potential trends that will define Indian e-commerce in the coming three years:

Democratised discovery

With data costs plummeting, the average Indian user is very comfortable spending time browsing through hundreds of options before making a purchase. This inexpensive data, coupled with a growing body of online reviews will grow to be key enablers in purchase decision-making. In the US, the reviews have become such an important part of the shopping experience, that Amazon US has prevented anyone but a verified customer from posting a review for a product. In India, most marketplaces have an open review policy where a customer who may not be genuine can still post a review, thus diluting the value of all reviews. However, this is not a bad thing – this is a standard practice to build review content online, and once there is substantial content, then the AI-enabled weeding process will begin. Sooner the better for all the concerned so that the value of online reviews is very high.

Vernacular content to aid shopping

India’s literacy rate is at 74.04% and the English literacy rate is about 10% (125 million). While English literacy is picking up, it is a generational change and will take 10-15 years more to have a broad-based impact. This means that a large part of India still thinks and searches in their native tongue. Couple this with new vernacular social networks such as ShareChat that are fulfilling the need for regional language connections with their friends and family members, and we have the perfect recipe for growth. More and more e-commerce portals will start having content in major regional languages in an attempt to reach out to the affluent but non-English speaking population.

Voice-activated searches

Google recently made changes to its search results algorithm to ensure that more specific questions are answered with the right results. This is not a minor update. This is a change which reflects how the next generation of online users are interacting with the world wide web. Kids do not type anymore – they simply ask Siri or Cortana or Google or Alexa – and get the desired results. This essentially means that consumers don’t search anymore by typing, “buy Android tablet India”, but they ask “which is the best Android tablet in India under Rs 15,000?”. So the product discovery journey is going to be different and the corresponding content marketing strategies by e-commerce companies will change accordingly.

Product searche and search engine

Even till a couple of years ago, a large majority of product searches began on search engines, mainly Google. However, search and discovery has moved to social networks (e.g., Facebook, Instagram) and large horizontal ecommerce portals (e.g., Amazon, Flipkart).

Consumers are either discovering products based on interests or friends network in the former case, or by active search once they know the category they want to buy in the latter case. This is a change that will continue to happen in the coming years and the proportion of searches on search engines will reduce. This will have a cascading effect on advertising dollars too, with more brands willing to spend on other marketplaces.

Ecom will be preferred destination

For the longest time, the main categories for ecommerce in India were primarily electronics, apparel, and accessories, personal care & beauty products. The underlying insight is that all of these categories have big brands, standardised products with structured parameters against which to compare each other and make a purchase.

A mobile phone or a laptop has processor speed, RAM, HDD and so on; apparel has specific sizes and designs, which can be returned if they don’t fit well. Going forward, other categories where brands do not exist, the parameters are not directly comparable and the ticket size is higher. For example, furniture, groceries etc. will all move online as the comfort with ecommerce grows. Further, categories like mattress/furniture have introduced 100-day trial period and generous return policies to drive higher adoption.

Online, offline difference to blur

Customers will stop differentiating between online and offline and they will become mere channels. Consumers will seamlessly discover products online and buy offline or vice versa. So brands will finally make the transition to an integrated omnichannel presence or new brands will create a different cost structure even for an offline presence.

(The writer is Co-Founder,