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Indian ecommerce still 'nascent'

News, 07 January 2015

NEW DELHI: India's ecommerce space grew at an explosive rate during 2014 but it is still at "a very nascent stage" according to a leading industry figure.

Speaking to the Financial Express, Amit Agarwal, country manager and VP, Amazon India, outlined the "tremendous" opportunities. "There is room for multiple formats and players," he said, adding that there was "significant potential for innovation to improve customer experience".

A survey of 2,000 online shoppers by cashback and coupons site CashKaro confirmed the scope for different formats and players as it found that online shoppers favoured one website over another depending on the category that they were looking to make a purchase in.

Thus, Flipkart was preferred for mobile phones while Amazon was the choice for laptops and electronics, Exchange4Media reported. Consumers looking for fashion and accessories headed to Myntra and Jabong, while lingerie buyers looked to Zivame. For babycare, Firstcry was favoured and for home d├ęcor, it was FabFurnish.

The area of logistics has been a particular problem for India's ecommerce industry, highlighted in the number of complaints from consumers about non-delivery or wrong delivery during several heavily promoted sales during the final quarter of 2014, the so-called Diwali debacle.

Agarwal said Amazon's focus for the coming year would be on the customer, including a reliable online shopping experience and quick and convenient delivery. Rival Flipkart is reported to be planning to offer delivery within three hours, on certain products in certain cities.

The leading sites already offer same-day delivery in major cities, but faster delivery could give them a competitive advantage. It is by no means a straightforward strategy, however, as Karan Girotra, professor of sustainable development at Insead, explained to the Economic Times.

"First, they need to select a small subset of their offerings which are available with these time frames. Second, meeting this delivery promise requires organisations to build very different logistics and operational systems than those necessary for traditional delivery route-based delivery systems. For instance, retailers may need to have many more warehouses in central parts of the city to make these work."

Another potentially complicating factor for online retailers looking to improve customer service is that some brands are looking at differentiating the products they make available online and in-store.

Data sourced from Financial Express, Economic Times, Exchange4Media, The Hindu; additional content by Warc staff