Technology Trends Driving India's e-Commerce Date:   Monday , September 28, 2015 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. Predictive analytics tell what could happen while prescriptive analytics makes decision what could happen. As an example, you may predict that customers may be looking for a certain type of item in large numbers. But what are you going to do about it? So you start to source inventory ahead of time. When users search, they are sure to find it thus preventing loss of goodwill. Predictive analytics is going to be a key driver in the management of e-Commerce platforms. It will also help in automation of various processes which requires a lot of people to do manual work that is non-scalable. Cloud computing Traditionally, we talk about cloud as a storage medium which it is more of infrastructure. At e-Bay, we think of cloud as an operating system a service-driven architecture under which a lot of services can be consumed to achieve a goal, with services being provided by multiple companies. An example is risk management since Trust is the lifeblood of vibrant marketplaces. As an e-Commerce platform provider, one is constantly balancing the equation between buyers and seller based on their trust factor to keep the quality of experience healthy. Every company today is doing it over and over again building risk models and managing reputation. Potentially in the future, I would imagine there could be aggregators who will actually start creating these models. There is no such unified risk model in e-Commerce industry at present. This will emerge in future. You dont need to own it and it could be consumed as a cloud service in the future. These are early days for India to make such services available though they will start to emerge relatively soon as every e-Commerce company is doing it despite being very expensive. Social media This is a very tantalising space and every company wants to crack the social buying. Communication applications out there like WhatsApp have a huge amount of audience but there is no way to buy out those platforms. In future, the whole social model will change and evolve. It will play two roles. One: on trust, so that a person can\'t hide behind. The other: a lot of referral traffic which can come through social media. In the next three to five years, social and communication applications are going to be fairly large in terms of driving traffic. Payment models Traditional payment models like credit and debit cards are still nascent or not used very often for online transactions. This gave rise to Cash on Delivery (COD) which enabled growth of commerce but is expensive and inefficient to manage at scale due to logistical challenges. On the other hand, new payment wallets are capturing millions of customer transactions per month and transitioning to dis-intermediate e-Commerce platforms by offering products and services. Digital India Recent government announcements of focus on startups, manufacturing and digital penetration across the country will further fuel the growth of online commerce. Every touch point connected to the internet is a potential customer. This will create new opportunities for innovation in areas like local language products, logistics and payments besides creating an immense treasure trove of data about consumers in various socio-economic categories. We are just seeing tip of the pyramid for e-Commerce in India. The real story will get played out over the next decade. So, stay tuned.