How E-commerce Has Put India's Retail Industry on the Growth Path

Not too long back, shopping involved spending a leisurely Sunday afternoon in the mall or market, moving from one shop to another. Now all one has to do is peruse the web for their favorite e-commerce portal and with a few clicks, make an online purchase. 

Over the last two years, a series of lockdowns and social distancing norms have caused a bit of disruption to the Indian retail sector and driven an increase in e-commerce transactions. With no access to physical markets, people were left with little option but to use online platforms to make purchases, and online purchasing emerged as a lifeline for both the retailers as well as consumers. This has affected the Indian retail industry, one of the largest retail industries in the world, in more ways than one.  
 
Indian retail industry’s market size came down from US$950 billion in 2018 to US$883 billion in 2020, according to Statista. As the overall retail market shrunk in size, the outbreak of the COVID-19 pandemic also accelerated the adoption of e-commerce and m-commerce as people across all sections of society started using the internet to make essential and non-essential purchases. 

Today, India is home to the third-largest base of online shoppers of 140 million, only behind China and the US, according to Bain & Company’s report How India Shops Online. 

The growing preference for digital channels to shop is challenging the status quo. While there is little doubt that acceptance of e-commerce was growing even before the pandemic outbreak, especially in metros and tier-I cities, the pandemic has made retailers realize the many benefits of digital platforms. It not only provides new opportunities to acquire new customers but also allows them to engage better with existing customers and bring down the cost of running operations. 

E-commerce Relies on Robust Communication Network 

E-commerce growth rides on reliable network connectivity that facilitates the purchase and ensures that a shopper’s digital experience is seamless. While most consumers are unaware, the seemingly simple online purchase process involves volumes of data exchanges in real-time for hundreds and thousands of buyers. 

Right from payments processing, inventory updating, logistics tracking, and uploading of static to dynamic content for visual catalogs, everything needs to be orchestrated in real-time to ensure that the customer's digital experience is not compromised. Any slight delay not only impacts that particular transaction but may result in the permanent loss of the customer. Worse, the frustrated customer may leave a bad review, impacting future sales and the brand's reputation. 

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In the backend, a delay in inventory updates will result in an inconsistency between the actual stock availability and what's reflected online, leading to loss of sales and conflict with the customers. Further, a lack of a clear view of logistics leads to several operational challenges. Therefore, the real-time update is key to ensuring perfect coordination between online and virtual operations. 

Resilient and reliable digital operations are essential to succeed in retail now because of the growing use of mobile devices to make a purchase. According to Sensor Tower, mobile shopping app downloads reached 113 million in October 2021. 

Retailers can also leverage data analytics to analyze the data on their networks to enhance the customer experience. With data analytics, they can gain actionable insights to provide the right product to the customers just when they need it. Internet of Things (IoT) also promises to improve the retailers' supply chain and facility management.  

Smooth and efficient running of e-commerce operations requires the foundation of robust communications networks. Any downtime, minor or major, will not only impact the consumers but also prevent the country's retail industry from realizing the potential of mobile commerce. 

Bright Future for the Indian Retail Industry 

The future looks bright for India's retail industry, with GlobalData forecasting that e-commerce payments are all set to grow at a CAGR of 18.2 percent between 2021 and 2025, to reach Rs 8.8 trillion (S$120.3bn) in 2025. IAMAI and Kantar Research report says that India's internet users are expected to reach 900 million by 2025 from 622 million in 2020, growing at a CAGR of 45 percent until 2025. As the number of internet users rises, the Indian e-commerce industry will grow along with it. 

Soon, Indian retailers will also be able to use 5G-enabled Virtual Reality (VR), Augmented Reality (AR), and Artificial Intelligence (AI) to gain new efficiencies and competencies. India is about to conduct its 5G spectrum auction and commercial services are likely to be launched later this year. Globally, retailers are already using AR/VR to improve customer experience, which is likely to be adopted by Indian retailers over the next few years. As consumer technology firms globally continue their quest to create the required devices to make the Metaverse accessible, it won’t be long before the Metaverse becomes the latest shopping destination. 

As the number of online shoppers continues to grow and the e-commerce industry matures, service providers can look to virtualization and automation to enhance operational efficiency and reduce costs to provide the best possible network to the people and retailers. India’s retail industry has emerged as the economy’s growth engine with several new unicorns from this sector. The communications network infrastructure must adapt to enhance efficiency and performance to help the sector meet the growing demand and to realize its growth potential.