 "Non-English market holds $800-million promise for e-commerce: Study")
Making e-commerce accessible to the non-English speaking audience is an untapped market of $800 million, a study by EY (earlier Ernst & Young) has said. This potential market size is roughly 15% of the revenue generated by e-commerce companies in India in 2014.
The white paper also revealed that fewer women prefer to shop online but 80% of them recommend their purchase to others.
"The skew between men and women, especially on our website, is 65%-35%. We do digital campaigns regularly to encourage women to shop on the website," said Vikrant Mudaliar, chief marketing officer, Lenskart, a niche e-commerce portal.
The sector's growth has also been hampered by slow internet speeds as India has an average data connection speed of 2 Mbps as opposed to 3 Mbps in Brazil, 3.4 Mbps for China and 9 Mbps in Russia.
"It is a complaint of almost all e-commerce companies that the internet connections should be faster. It is one of the reasons why companies are focusing on their apps so much," Mudaliar added.
The paper also states that India also has the lowest average mobile connection speed at 1.9 Mbps, while only Brazil, with 1.8 Mbps, fares lower than India amongst BRIC countries. "Interestingly, not only does India have more internet-enabled mobile connections than Brazil and Russia combined, the time spent online using the mobile is also among the highest. However, the internet usage on mobiles is not resulting in online shopping," the paper stated.
Other hurdles that the country has to overcome to maximise its e-commerce potential include low credit card penetration. Currently, only 4% of India's population own credit cards. Brazil, on the other hand, has 32% penetration.
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"The lack of laws pertaining to the industry, and [a prohibitive policy] in foreign direct investment in B2C e-commerce is limiting growth for the sector. The e-commerce players also need to leverage analytics to increase conversion, improve efficiencies in the logistics cycle and the entire value chain, and look to localise content to continue on their current growth trajectory," said Milan Sheth, Partner and Technology Sector Leader, EY India.
Other challenges such as fragmented logistical ecosystem, lack of warehouse automation and a product return rate between 5-25% drive down consumer confidence.
The scope for growth, however, is huge as India has a high proportion of internet users between the age of 15-35 compared to other BRIC countries. Mobile penetration of 80% has given hope to mobile wallet companies and there is a change expected the payments landscape.