The eCommerce industry has disrupted the retail market and changed the face of consumer shopping forever. Where the industry’s market value sat at about USD 14 billion in 2014, it’s expected to touch USD 99 billion by the end of 2024.
However, as the industry is maturing, so is the competition.
Customer needs and expectations are also evolving at a rapid pace. To continue to sustain the growth rate, eCommerce businesses need to identify and invest in the right root drivers.
This blog is a TL/DR of a roundtable discussion between Siddhant Rana, Market Development Head (India & South Asia), Shopify, Garry Turner, Chief Operating Officer, Deskera, Kunal Tiwari, Chief Product Officer, GoKwik, and Manmeet Singh, Director Growth (SMB), Cashfree Payments.
The speakers walk us through their thoughts on:
- Current trends in the Indian eCommerce space
- Short-term and long-term strategies for sustainable growth
- Leverage automation tools and tech to transform growth drive
However, if you are looking for a quick 5 mins synopsis, we got you covered.
Q. The pandemic has accelerated the growth of the eCommerce industry in India. This growth has led to many merchants running their businesses on sites like Shopify.
What are some major trends that have caused the shift and how is the eCommerce industry expected to evolve in the next couple of years?
There’s been a major paradigm shift in the eCommerce industry. The outbreak of the COVID-19 pandemic has further accelerated the change. One big reason behind the shift was the dominance of the marketplaces. Half a decade ago, marketplaces generated nearly 80% of the revenue. Brands were at their mercy and had to abide by their changing rules.
However, in the last one year, 1 in every 2 businesses have started prioritising their stores. They’ve realised that having one’s own website gives them leverage.
In fact, even small businesses with no websites are taking operations online.
Here are some of the pointers that businesses need to keep in mind once they have an online presence.
- Diversify online presence
- Create a multilingual site and cater to a wider customer base
- Introduce great merchandise matching customer needs
- Use effective marketing strategies to increase sales
- Prioritise customer experience
- Personalise and customise customer journey
- Focus on content (images, videos, infographics, product descriptions, etc.)
- Pay attention to customer reviews and product ratings
- Give weightage to customer loyalty over customer acquisition
- Highlight brand uniqueness and enjoy the edge
- Perfect supply chain and replicate the marketplace experience- especially during festive rush
- Run and sustain the business at their own pace
Related Read: How to manage Payments and Logistics during festive rush
With such a mindset, in the next 6 months,
- 46% of eCommerce businesses plan to invest in enabling customers to recycle their products
- 39% of eCommerce brands want to improve the efficiency of their manufacturing processes
- 40% of eCommerce merchants aim to invest in natural, renewable, and recyclable materials
The adoption curve and revenue-generating potential of the eCommerce industry are extremely interesting. It’s only a matter of time to see this industry break its records and bring in more innovation to match the ever-evolving customer needs and demands.
“One in every two businesses are prioritising their own stores rather than depending on marketplaces to generate revenue.”Siddhant Rana, Market Development Head (India & South Asia), Shopify
Q. Customer experience is paramount, especially when it comes to driving repeat purchases and overall customer loyalty. How to drive customer experiences as an organizational goal and how checkouts can solve shopper experience problems for eCommerce and D2C brands.
While customers have moved from offline to online shopping, their underlying experience remains the same. India is a trust deficit society. Nearly 50-80% of people still transact in cash.
They’d rather opt-in for cash on delivery than pre-paying for online orders because of the lack of trust. This results in nearly 40-50% RTO (return-to-origin) transactions.
Building a level of trust in the minds of customers is where many new and upcoming eCommerce platforms face the major challenge. Listed below are some ways to solve the issue.
- Embed subtle trust elements on the checkout page or across the entire user journey. This significantly increases the chances of higher prepaid orders.
- Partner with trusted payment gateways like GoKwik, Cashfree Payments, etc. and reflect the same on your payment page.
“58% of customers were dropping off because they did not have trust in the merchant website.”Kunal Tiwari, Chief Product Officer, GoKwik
- Introduce certain elements on the checkout page to reassure customers that they’ve taken the right decision.
- Reduce a customer’s cognitive load
- Optimize RTO and other metrics to increase conversions and reduce abandonment
- Offer a liquid checkout process adaptive to every type of customer
- Create a seamless checkout around customer impulse or intent
- Embed multiple layers of intelligence to achieve operational efficiency
Q. The eCommerce funnel is very complex. It’s utmost essential for businesses to analyse and improve a customer’s journey at each step. Why is it important for businesses to track data around different touchpoints and how can it help in enhancing the bottom line?
Every business has a different conversion funnel depending on the audience they target and how the users navigate through their site. However, the staging principles remain the same.
It all comes down to data and leveraging the right analytical tools to understand customer psychology.
Data enables businesses to:
- Understand customer perception about your brand and their overall journey through the site
- Figure out frictions and pain points, and find solutions to smoothen customer journeys
- Optimize experience across all major touchpoints (end-to-end)
- Craft a seamless journey and reiterate the entire process at regular intervals to keep engagement intact
- Use the right messaging and marketing strategies to make a prospect move deeper into the conversion funnel and convert into a paying customer.
“Optimizing eCommerce conversion funnel is more than just improving a single metric, it’s about improving a customer’s lifetime value.”Garry Turner, Chief Operating Officer, Deskera
Meanwhile, analytical tools help businesses to map key business metrics and work towards their improvement. Common key eCommerce business metrics include:
- New vs returning customers
- Traffic sources
- Acquisition via different mediums
- Exit pages
- Site navigation
However, it’s essential to remember that data is just a tool. It takes the right strategy, planning, and a clear path to succeed. For, if a business doesn’t follow the right path to drive customers into the conversion funnel, they’ll end up confused and abandon your site, many times, forever.
“Optimizing eCommerce website conversion rate is a mystery. It just requires a healthy relationship with your analytics platform.”Garry Turner, Chief Operating Officer, Deskera
Q. Digitization of payments is getting a major push from the government as well as consumers. Keeping this in mind, most businesses today are moving towards adopting a D2C or subscription-based business model. How can digitization of payments help businesses in the D2C space and how different is it for subscription-based businesses with recurring payments?
Every eCommerce business is thriving to build a unique brand presence in the online market today. They want to control a customer’s journey end-to-end, including the way they make the final purchase. Here, digitization is giving them the means to accelerate sales.
UPI is a fair example of digitization. It’s surprising to see that UPI makes for nearly 60% of all eCommerce prepaid orders. The payment scenario has drastically changed in the last five years.
D2C eCommerce brands want to provide a seamless end-to-end experience. Fintechs are helping them achieve it.Manmeet Singh, Director Growth (SMB), Cashfree Payments
Many Fintechs and the government itself are taking many initiatives to push digitization. They’re trying to inculcate the habit of online payments among consumers rather than dealing in cash. Buy Now Pay Later is also helping eCommerce platforms boost sales exponentially.
Meanwhile, the introduction of offline digital payments in India is yet another part of digitization that is expected to disrupt the payments industry in the coming years. It’s a technique to enable Indians with no internet or telecom connectivity to make small-value payments (initially up to 200 per transaction) using their phone, cards, wallets, or UPI.
However, India is yet to cross the threshold where people fully adopt the subscription-based/ recurring bill payment model. OTT platforms like Netflix, Hotstar, etc., and many milk delivery service providers work on this model. But it’s not every man’s cup of tea.
With the pace at which the Indian eCommerce industry is growing and how it’s being backed by Fintechs to boost sales, it’s only a matter of time until many more innovations knock on your door.