E-commerce in India has exploded in recent years, showing no signs of slowing down. This rapid growth has significant implications for how brands market themselves digitally to engage with online shoppers. In this article, we’ll delve into the key drivers spurring the e-commerce boom in India, look at relevant statistics that quantify the growth, and discuss how digital marketing strategies need to adapt to this shifting retail landscape.
The E-Commerce Landscape in India
India’s e-commerce sector has witnessed hockey stick growth curves, transforming from an nascent industry to a booming market projected to be worth $200 billion by 2026. While e-commerce currently accounts for less than 5% of total retail in India, it is gaining strong momentum and attracting big investments from major players.
The e-commerce landscape is dominated by two major players – Flipkart and Amazon. Flipkart was founded in 2007 as India’s homegrown e-commerce pioneer. Acquired by Walmart in 2018, Flipkart has continued to be the leading e-commerce platform in India. Amazon entered India in 2013, and has consistently invested billions of dollars to become a close second to Flipkart. Other significant players include Snapdeal, Myntra, Paytm Mall and niche players like Nykaa, BigBasket and Pepperfry.
What’s Fueling the E-Commerce Boom?
Several factors have aligned to act as key catalysts spurring the growth of online retail in India:
Increasing Internet Penetration As internet connectivity improves across India, more consumers are getting online to access e-commerce platforms. India had over 624 million internet users in 2019, second only to China. Falling data costs have also fueled greater adoption.
Smartphone Ownership Explosion Affordable smartphones have enabled internet access for millions of Indians. The number of smartphone users is expected to grow to 820 million by 2022. For e-commerce players, this means access to more potential shoppers.
Organized Retail Investment Large investments to develop organized, modern retail by players like Reliance, Aditya Birla and Tata Group have familiarized consumers with branded retail chains, prepping them for the shift to e-commerce.
Consumer Behavior Shifts Exposure to global trends on social media, and aspirational marketing by e-commerce brands has changed consumer attitudes. More Indians are now comfortable with online shopping.
Logistics Infrastructure Upgrades Major investments to strengthen last mile delivery networks by large e-commerce firms has enabled faster, more reliable deliveries even to smaller towns, building consumer confidence.
Government Initiatives Government programs like Digital India and demonetization gave a boost to digital payments. Policy reforms opened up FDI in e-commerce, and GST organized taxation.
Pandemic Acceleration COVID-19 lockdowns pushed millions of first-time users to shop online, rapidly accelerating adoption. New use cases like online grocery also emerged.
Growth in Numbers: Key Statistics
Let’s look at some key metrics that quantify the growth of e-commerce in India:
- The e-commerce market is projected to grow to $111 billion by 2024 and $200 billion by 2026 (Forrester Research)
- Online shoppers expected to grow to 220 million by 2025, up from 140 million in 2019 (Forrester)
- Flipkart and Amazon together had a combined market share of 80% in 2020
- Amazon grew by 61% in Q2 2020 amidst pandemic
- Online grocery expected to become a $18 billion market by 2024 (Google-BCG)
- Share of online retail as a % of total retail is 4% in 2020, projected to grow to 8% by 2025 (IBEF)
This data underscores the massive growth potential of e-commerce in a market that is still in its infancy. For digital marketers, the numbers signal the need to make urgent strategic pivots.
Strategic Implications for Digital Marketing
The surge in e-commerce has profound implications on marketing strategies for brands and businesses targeting Indian consumers. Here are some of the key ways digital marketing needs to evolve and adapt:
Embracing E-Commerce Channels
Brands can no longer adopt a wait-and-watch approach to e-commerce. To engage with consumers online, brands will need to embrace e-commerce, selling both on marketplaces and their owned online stores.
Content Marketers Pivoting to the Digital Shelf
Content can no longer end at generating awareness or interest. Brand websites and blogs need to create content to aid the buyer’s online purchase journey – from product research to comparisons to post-purchase support.
Social Commerce Gaining Traction
Creative digital campaigns on social media will need to include commerce-enabled content – shoppable posts, personalized product recommendations – to drive conversions.
Growth of E-Commerce Advertising
Search, display and video advertising on e-commerce sites is emerging as an important channel. Brands will need to allocate higher ad spends to online retail platforms.
Competing on Amazon and Flipkart Marketplaces
Brands can no longer ignore marketplace advertising and promotions to gain visibility and sales on Flipkart and Amazon, now central to online commerce.
Omnichannel Marketing Grows in Importance
As consumers move across online and offline channels, brands will need integrated marketing strategies that provide consistent messaging and experience across channels.
Optimizing for Mobile-First
With a majority of e-commerce happening on mobile, brands will need to optimize online stores and apps for mobile shopping through responsive design and app development.
The Need for Speed & Agility
Faster product launch cycles, real-time personalized campaigns and leveraging trends will be key as e-commerce mandates more nimble marketing.
While the growth of e-commerce presents an exciting opportunity for brands to engage with digital-first consumers, it also brings the risk of disruption for businesses that fail to adapt. Brands that make strategic moves early to align themselves to the new rules of the e-commerce game will be best placed to gain a competitive advantage.
Key Takeaways for Brands
Here are the top strategic imperatives for brands:
- Develop an e-commerce focused digital strategy encompassing owned online stores as well as marketplaces.
- Build branded websites and blogs optimized for e-commerce conversion through relevant, personalized content and journey mapping.
- Create social media and online video campaigns that integrate opportunities to shop and buy.
- Allocate marketing budgets to online retail platforms – search, display and marketplace advertising.
- Actively sell and promote products on Amazon and Flipkart marketplaces through advertising and promotions.
- Follow an omnichannel approach that provides integrated messaging and seamless experience across offline and online channels.
- Leverage analytics across platforms for actionable insights to engage consumers.
- Be agile enough to respond quickly to e-commerce-led shifts in consumer behavior and trends.
Conclusion
E-commerce in India is at an inflection point, and online retail is projected to grow exponentially in the coming years. For too long, brands have viewed e-commerce as a peripheral channel, but it is now firmly taking centerstage in commerce. Digital marketing strategies that were built for an offline world will need to transform and evolve quickly to ride the e-commerce wave.
Brands that take the plunge early to develop e-commerce and mobile-first digital strategies will be best placed to connect with their audiences online. They can gain invaluable first-mover advantage that will be hard for slow-moving peers to displace later. However, the window of opportunity is narrow, as consumer loyalty online can shift rapidly.
What is clear is that it will be an exciting and transformational time for digital marketers as e-commerce growth reshapes formats, platforms, and strategies. Marketers who embrace rather than resist this disruption, focusing on delivering value, convenience and experiences tailored for online shoppers will thrive in the coming years.
