E-Commerce and IndiaIndia has an interesting and a fast moving Ecommerce story. Billions of dollars are raised in last couple of years and who knows what lies ahead. 10 years ago E-bay entered India by acquiring bazee.com, as a first mover they had too many advantages and challenges. Since then Indian Ecommerce industry has matured a lot, the faith of customers has increased multiple times. Beginning from small items customers are buying mobiles, LEDs and furniture.

The pace at which Ecommerce industry developed in India is amazing. At one hand, it took US 50-60 years to come to this level and on the other hand, it took only 15-18 years in India. Industry is moving at a whooping 55-60 percent year-on-year Growth. If it will grow at this pace, it might outnumber the retail sales in a few years. Slowly the confidence of customer is increasing on Ecommerce and hence the sales. It is estimated that E-shopping will become a basic behavioral phenomenon in coming years.

A lot of investment guys and VCs are eyeing the Indian Market for new and fast growing ventures. Some of the reasons of this are:-

1. New Internet Users – Around 200 Million people will be exposed to internet and will use it. Mostly these will be young people.

2. Tier 2 Cities – Tier 2 cities are adopting ecommerce as a preferred mode of shopping. As the infrastructure will increase this will be a great opportunity.

3. Fashion and Women – Fashion ecommerce has doubled in past one year and is expected to grow almost 400% by 2016. So if you are planning to start an ecommerce store in this area don’t wait.

4. Numbers – By 2016 number of shoppers will double to around 40 million and spending will be four times to $8.5 Billion.

According to study by Forrester, Indian Ecommerce Industry is set to grow fastest at 57% in Asia pacific region between 2012-2016 and we are seeing this.

Indian Ecommerce is a great place to be but here are some of the challenges of Indian Ecommerce Industry:-

1. Failure rate of online transaction is considerably high as compared to developed countries.

2. Low internet speed is also one of the factors which discourage buyers from shopping online.

3. Low margins of ecommerce industry because of high operating costs are a discouraging factor for new entrants. It’s very difficult to enter this market if one does not have a VC fund or some kind of backup.

Having said everything, it can be said confidently – Indian Ecommerce Industry is Expanding. As the internet will grow and penetrate into people’s lives Ecommerce will boom. Affordable smart phones, interactive websites and application will also play an important role in Ecommerce success. Indian Ecommerce is on a nascent stage as the online buyer penetration is still under 25%. Only 16% of population is online and only 14% of that shop online. With Flipkart, Amazon and EBay the journey has just begun.