India’s ecommerce market in danger, say analysts
India’s online retail market in the country is heading towards the brink of collapse, with an estimated 75 per cent of consumers choosing to buy goods on Amazon, Alibaba and other online platforms.
“India is the biggest ecommerce hub in the world,” said Rakesh Sharma, co-founder and CEO of ecommerce consultancy F-Track.
“If we have a good ecommerce strategy, we can compete on a level playing field with these giants.”
But with ecommerce revenues expected to fall by 20 per cent this year, and the industry facing a crisis in terms of infrastructure, Mr Sharma said that ecommerce could be the biggest challenge India faces in the next 10 years.
The country has the second largest ecommerce industry behind China, which is expected to surpass $US1 trillion ($1.4 trillion) by 2025.
India’s population of 5.5 billion is more than double that of China, making it the world’s fastest-growing ecommerce country.
There are about 1.5 million online retailers in India, accounting for around 40 per cent.
Alibaba has the largest online shopping market in India with $US3.5 trillion in annual sales.
Amazon has more than $US9 trillion ($9.1 trillion) in annual revenues, and Alibaba has nearly $US8.4 billion ($9 billion) in cash on hand.
“It is difficult to imagine a scenario where Amazon and Alibaba can survive on the current scale of online retail activity,” Mr Sharma told the Thomson Reuters Foundation.
“The way India’s retail landscape is set up, they have to be able to compete and sustain the kind of growth that they’re achieving.”
I am not saying Amazon is a silver bullet.
But the way they are structured and managed, they are a lot better off than the traditional players.
“The ecommerce sector is expected by some analysts to be worth $US2 trillion ($2.1 billion) by 2020.
The challenge for the industry will be to find a sustainable solution.
The Indian government has been trying to address the lack of infrastructure and support in terms, from digital to ecommerce to e-commerce platforms, but many of these projects have faced delays and have not made it into the final version.
“We need to be the innovators and innovators that are going to build a sustainable economy in India.” “
One of the reasons we have had success in the past is because we have managed to find ways to support the retailers to operate in a sustainable way,” he said.
“We need to be the innovators and innovators that are going to build a sustainable economy in India.”
Mr Sharma also believes that the online retail industry has a lot of room to grow.
“There is huge potential in India,” he told the news organisation.
“Amazon is a great example of that.
The way they do it is very different to the way we do it.
The problem with us is that we are the traditional retailers.
So if we can find a way to support this online retail business in a way that is sustainable, then it will really make us a much better market leader.”