India ranks among the most vibrant e-Commerce markets worldwide with recent years marking 67 per cent compound annual growth rate. Industry experts forecast annual turnover to clock 7.2 billion dollars this year, up from 3.9 billion dollars in 2014.
While most big e-tailers have been working on an inventory model which is quite expensive, the shift now is towards marketplace as companies try to maximise capital efficiency and customer delight as well as minimise logistical complexity which helps scalability.
Mobile revolution
Like elsewhere, an online marketplace enables sellers to overcome limitations of offline markets and helps them grow businesses with wider reach. Three years ago, less than two per cent of transactions were on mobile and now half the transactions are on mobile apps. By 2017, 70 to 80 per cent transactions could be via smart phones. According to a Boston Consultancy Group report, the projected fee-based revenue from m-commerce could exceed 4.5 billion dollars by 2015.
Helping Sellers
While most of the focus has been on the buying customer, a lot needs to be done to make sellers successful particularly in the marketplace model. The fundamental of the marketplace model is to have a wide choice, which comes from having a healthy seller ecosystem. This also helps drive true price discovery through marketplace dynamics when many sellers are offering the same or similar products.
Many sellers are new to online and need a lot more technology enabled products to help them with listing, pricing strategy and customer insight, which will enable them to grow their business economically. The e-Commerce industry in India has not yet focused materially on helping sellers to succeed since much of the attention has been on buyers.
The next big push, as I see it, will be on the seller side. A fairly large number of companies are investing to help their sellers succeed through education, technology and support. As a comparison, China has over 2 million sellers in the e-Commerce space, while India has 50,000 to 60,000 active sellers.
Analytics
Analytics is the study of data to derive insights, which can help describe events, predict what could happen and support prescriptive actions to enable the future. Traditional business analytics that is more commonplace is moving rapidly into predictive analytics and prescriptive analytics supported by big data and machine learning.