The union government proposed several big changes it had planned for the future of eCommerce in India. The government said that these changes come in response to the effects of digitalization observed in the e-commerce ecosystem.
While the digital adoption by MSMEs saw a twofold rise, we believe the future is beyond digital! The next phase of e-commerce growth in India is expected to come through social commerce in smaller cities. A recent report identified social commerce as a potential source of competition to e-commerce giants in India.
How eCommerce grew in the pandemic
The growth of eCommerce is mainly driven by 2 factors – Digital adoption and integration of tier-2 and 3 towns in this digital drive. The growth is also facilitated by the increased adoption of digital payments by first-time users.
A majority of these users are MSMEs such as kiranas and neighbourhood shops like pharmacies and street food stalls. According to a forecast, the economy witnessed a 300% growth in merchant onboarding from tier-2,3,4 towns and villages as a result.
So how does this reflect on the future of eCommerce?
5 futuristic goals for eCommerce
1. Hyper-fast loan processing
Google had announced that it will invest $15 million to support SMEs in India, earlier this year. For this reason, the company tied up with a digital lending platform – FlexiLoans to enable small merchants and MSMEs to avail themselves of credit in a few taps. This collaboration will benefit over 50,000 small businesses in the next 12 months.
By 2023, the digital lending value is likely to be increased to around $350 billion, as per Statista.
2. Greater AR Penetration
Think about trying on clothes without even leaving home. That’s Augmented Reality for you! AR will emerge as one of the highly valued tools for brands, especially in eCommerce. It has already proven to be beneficial for attracting new customers, boosting sales, and generating revenue.
According to Businesswire, about 61% of shoppers prefer buying from retailers who offer AR over those who don’t. AR may unlock a large part of the market with its great benefits.
3. Increased Government marketplace access for MSMEs
The Government e-marketplace (GeM) portal guarantees better transparency and efficiency in transactions between the buyers and sellers. Currently, it has nearly 53,000 registered government departments as buyers.
This opens up a window of opportunities for sellers to land bulk government orders. In the past 12 months, amid the pandemic, the number of sellers has grown 5.2 times.
4. Creation of Open Network for Digital Commerce
Today, eCommerce markets operate in a kind of bubble. Each eCommerce platform only connects its own merchants and customers. Open Network for Digital Commerce aims to break this bubble.
This institution would offer an independent e-commerce channel for multiple providers. It will define the best practices and ensure their implementation across all sectors.
ONDC will also integrate closed eCommerce ecosystems and allow each player to be discoverable to a wider market. This will result in expanding the eCommerce market while retaining its competitive spirit.
5. Social Commerce: A New Electronic Commerce
In 2020, Facebook, Instagram, and Pinterest revamped social commerce tools to help retailers to sell online in the midst of the pandemic. Tools such as forums and communities are online spaces where buyers and sellers discuss their products, marketing, and online shopping experiences. Meesho pioneered social commerce in India six years ago, so did China.
By 2025, social commerce will be worth as much as $20 billion, as per a report.
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