Here’s How E-commerce Industry is Changing

During the pandemic, e-commerce companies in India earned immense revenue without spending much on marketing
  • BY Jaspreet Kaur

    Feature Writer, BusinessEx

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  • Aug 13,2021
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  • 11 Mins Read

In recent times, e-commerce has increased tremendously. It has outgrown as compared to other nascent industries. Due to the ongoing health crisis, it is estimated to grow further in the offing. Bounties of opportunities are available in the e-commerce industry; hence, various new e-commerce companies are emerging in India. Besides these merits, there are disadvantages of working in the e-commerce sector. Cut-throat competition prevails in this sector, in turn, a large amount of money is spent on marketing.  

During the pandemic, e-commerce companies in India earned immense revenue without spending much on marketing. Last year (2020) accelerated the e-commerce sector. According to a report by IBEF, the Indian e-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second largest e-commerce market in the world by 2034. The country’s e-commerce sector will reach $99 billion by 2024 from $30 billion in 2019, expanding at a 27 per cent CAGR, with grocery and fashion/apparel likely to be the key drivers of incremental growth. 

The Rise of E-commerce Sector 

In the first pandemic-led lockdown, people averted going out and purchasing food from local vendors. They rather procured commodities from e-commerce companies than going to traditional markets. The report by IBEF stated that as most Indians have started shopping online rather than stepping outside their houses, the Indian e-commerce sector witnessed an increase. India's e-commerce festive sale season from October 15 to November 15 in 2020 recorded INR 58,000 crore ($8.3 billion) worth of gross sales for brands and sellers, up 65 per cent from INR 35,000 crore ($5 billion) last year.

If the pandemic keeps looming over the country, many e-commerce companies may rise faster than others. The top e-commerce companies in India would be the driving force in this situation. Such companies create, as well as diminish competition, in the business market. New, emerging brands easily get recognition by making a virtual presence in the e-commerce platforms. Brands can gain immense prominence that they may not have achieved in the near future. Therefore, venturing into e-commerce platforms helps save a brand’s capital, marketing cost, and reduce risk factor. 

Problems in E-commerce Sector 

While the big companies manage to survive in the e-commerce sector, small players strive for survival. Several obstacles come on their way, in turn, ruining their customer base as customers shift to other e-commerce platforms having more stocks. Lack of working capital turns out to be an essential hurdle in their entrepreneurial voyage. This, in turn, affects the company’s storage capability. E-commerce firms hold less stock owing to the financial instability. So, stocks having a good demand get sold out faster than others; filling these stocks, in turn, takes time and money. 

Ease of using technology and the internet have turned out to be the second problem for the e-commerce business models. A wide range of online business solutions are available rendering business services to small traditional brands. These B2B platforms cater to the needs of the traditional brands and help them launch on the Internet. 

These developments show where the e-commerce industry is heading to in the coming years. 















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