DNA Money Edit: A strong ecosystem vital for e-commerce growth

With the government reducing levies on digital transactions and aggressively promoting Digital India, the e-commerce market in the country is growing multifold. As per a joint study conducted by Assocham and Deloitte, the digital commerce market in India is expected to cross $50 billion in value by 2018-end from the current level of $38.5 billion, on the back of a growing internet population and increased online shoppers. Advanced shipping and payment options and exciting discounts are the other major drivers of the growth.

While everyone is excited about the growth, a strong and safe e-commerce ecosystem with banks and other players providing a secured online platform is extremely vital. The fact that more than 50% of online transactions are done on the cash on delivery (CoD) mode shows the lack of trust in online transactions and security concerns, apart from the limited adoption of credit and debit cards. The sector is heavily dependent on CoD mode of payment, the most preferred choice for Indian consumers.

Another important aspect is the slow growth in smaller cities and semi-urban areas. The study said one out of three customers that make transactions through mobile phones comes from tier-1 and tier-2 cities. Ordering on smartphones is increasingly the first option for most of the customers, with 82% of shopping queries made through mobile devices in 2017.