Trends for Indian E-commerce in 2016

By | Feb 02, 2016 | 917 views |
  • Trends for Indian E-commerce in 2016

E-commerce is now a regular part of an Indian digital consumer. The growth in the sector has been driven by increasing penetration of smart mobile devices, improved broadband and wireless internet access, introduction of 3G/4G technologies, fillip to digital payments as well as aggressive customer acquisition and retention strategies by online companies. The present Indian government initiatives like ‘Digital India’, ‘Make-in-India’, ‘Startup India Standup India’ and plan to develop ‘Smart Cities’ across India have further bolstered the growth of the online sector.

The Indian e-commerce market is both massive and competitive. According to an ASSOCHAM study, India’s E-commerce market is likely to touch $38 billion mark in 2016, a massive jump over the $23 billion revenues clocked by the industry in 2015. “Increasing internet and mobile penetration, growing acceptability of online payments and favourable demographics have provided…the unique opportunity to companies to connect with their customers,” said the study.

Also read : Indian e-commerce sector set to register fast growth

Experts feel that 2016 will see more consolidation of online companies and more number of startups will join the Indian E-commerce sector. Focus will be on Digital payments, customer –centric strategies, omni-channel and O2O (online-to-offline), multilingual approach, rising influence of social media and efficient logistics system.

Hippo examines the trends which will dominate the Indian E-commerce sector.

Digital Payments

In 2016, Digital Payment Technologies will give a stiff competition to the traditional payment ecosystem. Companies like Flipkart, Snapdeal and Ola will come up with their own mobile wallets and this will give some fierce competition to leading payment firms such as PayU, Paytm,  MobiKwik, Oxigen, Citrus Pay and traditional banks. Digital Payments ensure a better experience for the consumers and thus this year we will surely witness introduction and adoption of more efficient digital payments solutions.

Forecasts suggest the mobile wallet market in India is expected to reach $6.6 billion by 2020 (India Mobile Wallet Market Forecast and Opportunities, 2020) which indicates greater adoption of wallets as a simplified and secure digital payment option. Other payment solutions like HCE (Host Card Emulation), NFC (Near Field Communication), BLE (Bluetooth Low Energy) and QR (Quick Response) code, have added greater value for digital wallets through single touch and secure payment solutions and cash-back deals. We are likely to see solutions like ‘On the go Pin’ which complies with RBI’s two-factor authentication mandate and is also faster and safer than existing technologies.

Also read : The emerging m-commerce marketplace
Omni channel and O2O

Omni-channel is an approach that reflects the fact that retailers interact with customers through countless channels-websites, emails, social media, offline stores, kiosks, direct mail, mobile devices, televisions, networked appliances, and more. It is important for the retailers to adopt a multi-channel approach since the customer has many choices for completing his purchase and marketers cannot afford to undertake the risk of investing in only one channel while ignoring the potential of another. Retailers will develop a robust omni-channel strategy to drive repeat purchases, cut costs, trigger conversions and, at the same time, meet the customer’s needs and expectations.

Also read : Adopt the omni-channel route for success

Indian consumers still prefer the touch and feel factor; thus Online to offline commerce will gain precedence in order to cater to diverse needs of the consumers. To provide an intuitive O2O experience, retailers will need to use analytical tools to examine customer buying behaviour and deliver customized experience at different points of access.
Increased focus on multilingual interface

The Indian E-commerce focus has now shifted to tier 2 & 3 cities and smaller towns. People residing here wish to take the online route but are not fluent in English language; so retailers will create stores in regional languages and tap these segments of Indian population to increase their market share. A recent example is of Snapdeal, which has launched a UI in 11 regional languages.

Also read: Benefits of a Multilingual Website

Significant impact of social media

Social media has fast emerged as a preferred source of information to find out about the latest products, get ratings and reviews about products. The e-tailers can promote their sales, discounts and offers through social media pages and easily reach their target customers. Deloitte India has predicted that the future of e-commerce in the country is expected to be m-commerce, and elaborates further that the boom in m-commerce will be powered by social media, and is likely to become the need of every business. As many customers are buying products through help of social media, the online retailers will devise strategies centered around promoting their brand with effective use of social media channels like Facebook and Twitter. Further, the rollout of 4G in India will bring about faster net connectivity and ease of surfing on social media apps- which points towards digital-first brands being increasingly promoted through social media towards 2016.

Also read : How social media helps to engage customers
Consumer centric approach

2016 will be year of enhanced customer experience rather than discounts. Companies will adopt a more customer- centric approach and seek to address the pain points of the online customers. E-tailers will spend time and effort on building trust and loyalty of the customers. It will be important for a company to offer a fast and intuitive website to offer enhanced customer experience, attract new ones and also increase repeat customers. Retailers are likely to adopt innovative techniques like engaging on social media, and offering offline-like buying experience. To enhance customer engagement, E-commerce businesses in 2016 will adopt analytical tools, SEO techniques and big data to track customer behaviour.

Also read - How to attract customers to your e-store


Logistics, the backbone of E-commerce, will play a key role to win customers in 2016. It is all about speedy and efficient delivery of products. We will see online retailers tying up with more logistics firms to ensure delivery of products. It is safe to conclude that logistics will play a vital role in determining the success of an E-commerce entity.

A case in point is Flipkart Ltd, the country’s largest online retailer, which has recently thrown open its logistics services eKart to third-party e-commerce firms even as the company is gearing up to roll out an inter-city customer-to-customer courier service called eFlash.

Also read : The role of logistics in E-commerce
Startups in E-commerce sector

We will certainly see many new E-commerce firms jumping the online bandwagon, either on their own or in partnership with other companies. Buoyed with the recent government initiatives announced under the ‘Startup India’ plan we will see many new acquisitions as well as consolidation of companies in the E-commerce sector.

Also read : Startup India Stand Up India

Recently, we saw Dubai-based Landmark Group and Mother's Recipe (a part of Desai Brother's Ltd – food division) join the E-commerce sphere. Also, top industrialist Ratan Tata has invested in baby care E-commerce platform FirstCry, continuing the slew of investments he has made in various startups like Snapdeal, CAshkaro, Urban Ladder, Bluestone, CarDekho, Xiaomi, Ola and There are bound to be further acquisitions and consolidation in the industry.

Hippo concludes that the e-commerce sector is set to evolve at a fast pace with innovative techniques and strategies likely to disrupt the traditional retail market landscape, bring about the success of E-commerce firms and play a critical role in strengthening the economic growth of the country.

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