In the year 2015, near about 50 million people in India shopped online and as per industry experts, the number is touted to splurge 3 times and surpass 175 million by 2020. This hike in consumer base clearly means that these online retailers will have to increase their competence 5 times from what they have right now to meet the increased demand.
When we talk about the current eCommerce industry, the notion surely says that the ecosystem is moving towards its unprecedented best. With companies like Paytm, Snapdeal, Flipkart and Shopclues entering into the unicorn club, online retail is surely to see a great rise in the years to come. Now for these eCommerce companies to function efficiently and meet the increasing demand, it is very important to drive efficiency through a renewed focus on various segments of the business, logistics being one of them.
As per a market research by Novonous, the current logistics industry in India is worth $300 billion and is touted to grow at a CAGR of 12.17 per cent by 2020. Logistics is one big segment of online retailing that can surely help the online ecosystem to the distance. Clubbing logistics and eCommerce together, to meet the increasing demand, is surely the way forward for eRetailers to keep the balls rolling. However, logistics has always been one of the most challenging aspects of online retailing. It has been one prime reason behind the shutdown of many eCommerce ventures. With online retailing being in the midst of many innovative macro as well as micro trends, delivering a seamless logistics service to capitalise of these trends will be the key in determining the success of the industry.
Below mentioned are 5 elemental trends that can enable a flawless growth of eCommerce industry leveraging the logistics sector:
Rural Cities Turning Urban
The rising relevance of tier II and III cities clearly indicates the need of a wider presence of logistics network. Internet and smartphone penetration across the rural vicinity of the country has splurged the demand of online shopping. To cut down on logistics and delivery front, eRetailers are now aggressively opening warehouses in these areas to strengthen their operation across the country. The trend is likely to grow in the future as local networking for faster delivery is also gaining momentum. As online retailers now aim to deliver products quickly to their customers, there is a sense that the most important target consumers are in the tier-II and tier-III cities.
The CoD Factor
No doubt India is moving towards being a cashless economy. Mobile payments, online shopping and many of government initiatives such as 'Digital India' have been major factor behind it. Nevertheless, a large group of consumers are still tilted towards the traditional cash on delivery mode of payment. Rising eCommerce fraud and lack of touch and feel factor has kept CoD alive. The sheer volume of CoD orders will always be required for fundamentally different cash handling capabilities.
Everything Sells Online
A phenomena that was designed just for ordering books online, has now evolved and have become the DNA of every retail segment be it electronics, fashion, jewellery, automobiles and what not. But the liest doesn't ends here. The increasing preference of online shopping has injected the need of bringing every shopping category on a smartphone or a desktop. From high-end luxury products to refurbished electronic products to custom-made furniture. everything sells online. Emergence of these new categories has increased complexities in the online shopping model. To check these intricacies, requires services such as accurate weight reconciliation systems, dark store services, quick delivery, seamless payment gateways etc.