The rise and rise of e-commerce in India

I was recently at a boardroom and a discussion here centred on how big e-commerce is, and how it is going to take India by storm in the future.

Not only is the industry predicted to grow at 40%, but also that there are new players foraying in the business on a daily basis. An equal amount of investors are willing to put in their money, waiting to reap benefits when e-commerce and online trading makes in big in India. The e-commerce in India is still at a nascent stage – surrounded by potentials and projections – but the real performance of the current market leader, Flipkart, does have a success story to tell.

Just like any industry, one success story has investors and their business interests sit up and take notice. Take, for example, Educomp in India. Though it’s tottering and dealing with many financial issues, Educomp’s early success paved way for investors to look at the education industry with a certain degree of seriousness.

Flipkart today is valued at Rs1,000 crore, and speculation is rife that the e-firm, in fact, is worth at Rs5,000 crore. It recently raised $20 million. Other Indian players – Myntra, Jabong, India Plaza and Junglee – are also eating into the e-commerce pie.

Rural India, too, isn’t untouched by the phenomenon that is online trading. Penetration of World Wide Web and number of users is on a continuous rise, which in turn is aiding online purchases among the rural populace. There are some statistics that claim that online buyer space has increased by eight-fold, in past few years.

This industry does follow rules of demography, and also has its share on issue. Amazon, for instance, is the global leader in e-commerce, but is now plagued by issues of credit cards being hacked.

Hackers track closely non-functional accounts and no sooner a purchase is made, they make another purchase within 24 hours using the same credit card number. These hackers, most often, aren’t very notorious and can be simply collegians looking for purchases of a few hundred dollars. But there have been cases of thousands of dollars being siphoned.

In such cases, the online security mechanism of the credit card does kick in and a complaint can be lodged, but the investigation process is long drawn. One has to make the payment before cancelling a credit card – thus, an added woe.

But a big advantage, which these online marketers have, is that they can cater to a worldwide consumer base. It’s easy, saves time and makes global trade easier.

The industry is clearly on an upswing, and one can only hope that it is not overrated and overused… that company valuations aren’t irrational and speculative, so that the industry doesn’t end up like dot com did.

The writer is  an entrepreneur and educationist