What is the future of Indian eCommerce in 2021?
Reading Time: 7 minutesIndian eCommerce domain has seen new heights in 2020 and going to break the glass ceiling in 2021. As both consumers and sellers have looked at eCommerce as the safest medium to transact. And this eCommerce growth wave will continue in the coming 5 years.
Future of eCommerce 2021 – a report by Shopify has come up with some interesting insights based on global merchants and consumer data. It is about how the commerce landscape is most likely to change in 2021 and the opportunities it will create for small businesses to become a part of a new retail reality.
With this insightful report, Shopify has done an excellent job examining buyers’ and sellers’ varied perspectives, giving us a complete picture of the industry in diverse spheres. From the changes in consumer shopping habits to the importance of running a successful omnichannel business, the report caters to it all.
Shopify report’s data and insights can be extrapolated to predict the future of Indian eCommerce in 2021 and beyond. Let’s dig deeper into the 5 key predictions for businesses in the coming years based on Shopify’s report.
5 Key Predictions for Indian eCommerce Businesses in 2021
1. Young consumers will change the way businesses sell
Many countries imposed lockdown restrictions in 2020 and it is still on, due to which more people shifted towards eCommerce/online buying for their staple needs. It also made the global retail sales reach an all-time high of 16.4%.
While Millennials and Gen Z shoppers were the key driving force behind this trend, they also influenced other generations to go online. Shopify’s global survey across 11 markets also shows that more than 80% of consumers prefer shopping online during the pandemic.
Now, online buyers look for product delivery speed, efficiency, and overall shopping experience while buying. This will push the brands to improve the entire consumer experience cycle for better ROI.
This has highly impacted local businesses who were not yet ready for the digital transformation as they had enough customers buying in-store. Pandemic forced them to think of instant ways to drive business through online channels. The ones with plans didn’t find difficulties, but the decreasing sales during lockdowns impacted their marketing budgets.
But the best part is, today, online buyers are highly influenced by word-of-mouth publicity, and hence, businesses would need to invest a lot in influencer marketing. Local businesses can connect with the micro or local influencers to stay on top of their consumers’ minds. This could be an easy win with lower marketing costs.
2. Businesses with an Omnichannel presence will be able to serve their local customers better
Soon after the announcement of ‘Vocal for Local’ made by Prime Minister Narendra Modi, there was a sudden excitement among the Indian local businesses and there was a boost in social sharing of Indian products with #vocalforlocal. They got another opportunity to attract local customers.
But, the significant benefit of this announcement was to the businesses with an Omnichannel presence. At eComKeeda, we predicted that Omnichannel is going to be the major eCommerce Consumer Experience trend in 2019-
However, COVID-19 has made it essential for businesses to start with multichannel and aim for an omnichannel presence. Also, online merchants must improve the customer experience, which is affected by limited stock and longer shipping times.
According to the report, the top factors that made shopping online frustrating for consumers include:
- 42% say limited stock is a concern
- 36% feel shipping took longer
So, eCommerce brands would need to deliver on the current expectations that will most likely see the greatest returns in 2021.
The need of the hour is commerce optimization across channels, including online marketplaces, retail, social media, and wholesale. It also implies investing in the right technology to create unified experiences for customers.
The first step towards ensuring a consistent experience for consumers is to unify customer and product data. It involves syncing product and multi-store inventory levels automatically, integrating commerce platforms to both sales and supply sides, and using POS systems to connect retail outlets and digital storefronts.
That would happen only when the retailers would look at the transformation required to adopt Omnichannel practices. A major retail transformation is required at the delivery front.
Let’s take a look at the retail trends 2020 and beyond that will help retailers serve their local customers better,
- More of no-touch payments since the consumers are more cautious about staying safe
- Smooth local delivery to bridge the gap between the regional and bigger markets
- Buy Online, Pick-Up in Store (BOPIS) and Buy Online Return in Store (BORIS) model as a part of an omnichannel strategy to avoid loss of consumers that may result from high delivery charges or delays in product deliveries
- Provision of alternative pickup and delivery options for consumers in case a specific option does not fulfill their needs
Retailers being still skeptical of utilizing these Omnichannel strategies can experience a long way to eCommerce success.
3. Consumers want to shop independently – both from marketplaces as well as independent brands
Future of Indian eCommerce report also shares that 81% of consumers look for independently-owned businesses to support for reasons including supporting entrepreneurship, buying unique products, and experiencing good customer service.
Also, 86% of consumers support small businesses and 83% look for locally owned businesses to support.
But, that doesn’t mean consumers have stopped or reduced their buying from marketplaces. 44% of consumers purchased from marketplaces.
This means that consumers want to buy from marketplaces as well as independently or locally-owned businesses.
But here, local businesses would get the highest benefit due to the personalized customer service expectations, support to their community and trust.
The report also states that 76% of consumers are willing to shop at new brands or stores for the first time. This means that niche brands or the brands that are selling unique products will be able to take the benefit.
Three ways niche or new brands would be able to reach their target market-
a) Conversational Commerce
Brands can leverage marketing technologies such as chatbots to initiate conversational commerce. After all, 59% of eCommerce companies already plan to experiment with the same.
b) Social (Shoppable) Commerce
Local businesses or niche brands looking to enter the eCommerce market can leverage social media to grab early success in conversions. Create Facebook Shop, Instagram Shop, and now even a WhatsApp Shop because WhatsApp brings a Cart feature in India.
c) Sell on Marketplaces
Every brick and mortar business now would need to be present on marketplaces as their consumers are making purchases there. Their brand presence can help them improve their customer experience and boost customer loyalty across all channels.
So, it has become more than essential for businesses to understand where their customers are and sell products accordingly.
4. Brands must demonstrate authenticity, transparency, and accountability
As we said, Generation Z is making an impact and shaping the future of Indian eCommerce. According to Bo Finneman in the interview with Mckinsey,
“They’re looking beyond tangible products and actually trying to understand what is it that makes the company tick. What’s its mission? What’s its purpose? And what is it actually trying to build for us as a society?”
That’s what the eCommerce industry in India saw during the pandemic in 2020.
One of the stats reveals, 87% of Indian consumers prefer green or sustainable products, which is why more such brands would need to go in that direction.
For example, Zouk is a 100% Vegan & Proudly Indian brand. They sell bags for laptops & office, female wallets, mini wallets, sling bags, bucket bags, backpacks, travel pouches for women & men made up of vegan leather.
Another stats states, 80% of consumers respond positively to retailers donating to a cause with each purchase, and 27% of consumers shop at local or independent retailers to reduce their environmental impact.
During the pandemic, Gujarat’s biggest retailer D-Mart donated 155 crores to fight against coronavirus. Such contributions indeed influence Generation Z to trust these retailers for their loyalty-based shopping.
Trying to help society or contributing to make society better with environment-friendly products or initiatives, brands can demonstrate authenticity, transparency, and accountability among their customers.
5. Businesses will need to provide payment options to consumers that banks don’t offer
A few global statistics reports that since the start of the pandemic, a 60% increase in global Shopify merchants who offer buy now, pay later.
If you look at Indian marketplaces, they have been offering no-cost EMIs for a few years now. But, that won’t be limited to them in 2021.
Small or new online businesses in India would need to come up with the improved digital buying experiences with online payment facilities such as online banking, ‘buy now pay later’, mobile banking, and wallets.
Many businesses already offer mobile banking and wallets with the help of various payment gateways in India. They would need to take one step above to improvise by providing some short credits to their customers. This will help consumers buy from their favorite brands and stay unaffected by the changing economic conditions.
Future of Indian eCommerce is Booming, we are on the growth wave…
The COVID-19 lockdown restrictions pushed the consumers online, which has made the brands worldwide to follow the same route. Selling directly to customers in 2021 and beyond will be more about standing out in a crowded space. Brands need to invest in rich, personalized experiences for their consumers while also keeping the human factor in mind.
To survive in this new normal, brands across diverse industries would have to do the required hard work to attract and retain loyal consumers for a better tomorrow.
