Technology September 21, 2015 Last updated September 18th, 2018 1,926 Reads share

What Kind of eCommerce Software Solution Can Enable Bottom Line Growth?

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eCommerce software solutions that can drive bottom line growth are a rare species to come by. The eCommerce vertical in India is seeing some busy days ahead of the festive season this year. This is not just a sudden spurt in activity. eCommerce has been in presence in India for more than fifteen years.

There has been tremendous growth in this vertical in India over the last five to six years. A report published by the finance giant Ernst & Young states that the eCommerce industry has seen a phenomenal growth rate of nearly 50% over these last five years. The report estimates the number of online consumers to have grown from 11 million in the year 2011 to 38 million in the year 2015.

This growth momentum has found ample support from angel investors and private equity firms as well. Investments in eCommerce for the year 2011 stood at US$305 million. The close analysis of the data for the last three years shows an even more impressive story. A KPMG report states that in the last three years the market size in India has grown by an astounding rate of 150%. Traditionally India has been a consumption oriented economy and the current scenario only promises further growth in India’s eCommerce investments and revenues.

Economic Drivers of Growth

At the back end of this growth story has been a combination of diverse factors. These factors may be summed up as follows. India’s disposable income for the household sector was estimated to grow by two and half times. Consumption spending in India forms a lion’s share of the expenditure incurred by the household sector. There has been a great growth in the sales of computing devices like desktops, laptops and tablets and this proliferation is expected to sustain in the next ten year horizon.

At the micro economic level there is data that shows that the average time spent by Indians online has increased and this boils down to more opportunities for eCommerce sector in India. There are string expectations that the internet user base in India shall replicate the growth of the voice user market. The volume and average of the transactions done by credit cards is higher than the same for debit cards.

The banking sector advances have also helped matters by bringing a plethora of payment modes. These are just some of the economic drivers of the eCommerce growth.

Institutional Drivers of Growth

At the institutional level there has been a positive market sentiment about the series of economic reforms that have been undertaken by successive governments. The general outlook of the regulatory environment has seen a restoration if confidence. Government initiatives to invest in infrastructure creation including communication and connectivity have in general been good.

The government has also taken initiatives to bring the micro, small and medium enterprises to the eCommerce bandwagon. It has been found that over 30,000 sellers in India sell their products on eBay and 15,000 sellers in India.

Challenges to Growth

Despite these encouraging signs there are numerous challenges that constrain the growth of eCommerce enterprises in India. To make matters worse these challenges are all technology driven and eCommerce is essentially a technology driven vertical.

  • First the average internet speed and the broadband speed in India is very low.
  • Online payment transactions in India have high failure rates in comparison to other nations like China and the U.S.
  • The online payment landscape is marred with low usage rates of debit and credit cards.
  • Fourth eCommerce enterprises in India do not have the required back end processes to optimize on logistics, supply chain, recurring billing and payment.
  • Another major issue is the quality of commerce payment gateway development and integration.

eCommerce software vendors in India need to offer solutions to the challenges that they face so that they can earn a higher profit margin.

eCommerce Payment Gateway Development for Seamless and Fast Payments

eCommerce software companies in India need to focus their energies on developing payment gateways that can seamlessly integrate over portals and consume less loading time. With slow internet and broadband speeds, customer bounce rates can wreck havoc on eCommerce enterprises. It has been observed that end users in India expect a payment gateway to load in less than 14 seconds. In fact bounce rates become high even at 10 seconds. This means that payment gateway development and integration has to be fast enough to retain the excitement of Indian consumers indulging in impulse purchases.

More over it has been observed that online purchases that are financed by the usage of debit and credit cards report lesser volumes of reverse logistics and higher customer loyalty owing to the fast and simple shopping experience. It is in this perspective that eCommerce payments gateway assumes the role of a technological driver of business.

eCommerce Software for Streamlining Supply Chain and Logistics

Despite the Indian economy being a consumption driven one, there are local issues that need to be taken into account. The most preferred mode of purchases online in India is based on cash on delivery meaning that a deal is closed only when the merchandise is shipped to the doorstep of the consumer. This means that traveling through busy roads and traffic jams in cities, the teams of safe delivery persons need to fight time and costs in reaching out the goods from the nearest warehouse or buffer point to the consumer.

To a great extent costs of supply chin and logistics can be streamlined by making use of eCommerce software that enables them to optimize on the inventory models, supply chain points and integration of billing and inventory systems. This harmonization of sales and supply chain can enable firms in the vertical to reduce costs significantly and thus enhance their margins.

eCommerce Portal Development with Responsive Design

Given the data on opportunities that is available it makes enormous good sense to develop eCommerce portals that are dynamic and obey responsive design. To be able to tap the opportunities that are emerging in the mobile internet space, eCommerce portal development has got to embrace the user interface, navigation and loading time that are unique to smart phones.

While the web will stay relevant, volumes of online business are bound to grow in the near future. First, mobile internet connects the deepest pockets of India. Second, portability and purchase on the move is the next big thing and third, the most important factor is the higher cost value that smart phones command over personal computers and tablets.

There is a need to address these specific issues with better and more quality oriented eCommerce software solution products and services. This calls for software development companies in India to understand the business landscape, local challenges and offer solutions based on local innovation. While the list of opportunities and challenges that is discussed here is by no means exhaustive, there is crystal clear appreciation of the fact that rhetoric, opportunities and challenges need to be viewed in a fresh light to enable eCommerce companies in India to grow.

Images: “concept of e-commerce or ecommerce, electronic commerce, with message on computer keyboard./


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Zeba Warsi

Zeba Warsi

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