The E-commerce Boom: From strategies to profit

Everyone here knows what e-commerce means but let’s discuss it in brief. E-commerce technically refers to electronic commerce. That means buying and selling products online on mobiles, laptops etc. The only requisite is the internet accessibility. It also includes the transaction of funds or data over the internet.

Let’s see how it works? When the user places an order, his browser will interact with server of the e-commerce platform. The order manager first checks the inventory using the order data and then updates the database to manage inventory records. E-commerce websites now integrate online payment processing applications to manage money transactions. After completing the payment and confirming the inventory, the system processes and validates the order. Then, the system notifies the user that it has processed the order. The system sends the order data to the warehouse, confirming that it can now dispatch the order to the customer.

The user completes this entire process in just a few clicks, which is the primary reason for the rapid growth of e-commerce in recent years.

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Few examples of such e-commerce platforms:

WebsitesMonthly Site VisitorsRatings
Amazon210M4.3/5 (Glassdoor)
Flipkart215M4.2/5 (Glassdoor)
Myntra51.1M4.2/5 (Glassdoor)
Meesho23.3M3.8/5 (Glassdoor)
Ajio13.7M3.5/5 (Glassdoor)

The factors behind the E-commerce growth:

  • Increased internet and smartphones usage: The data charges are cheaper than before and most of the population of India now has smartphones.  
  • Digital Payments: The rise in the use of payment applications such as Paytm, PayPal, GPay has eased up the payment process. 
  • Change in the consumer behavior: Influential buying and raise in incomes has increased the demand of online shopping.
  • Competitive pricing: Due to increase in competition among the e-commerce platforms, They sell the products at most reasonable prices and also offer heavy discounts and prizes or cashbacks to the customers.
  • Supply-chain: The supply chain has become so strong nowadays due to increase in the number of warehouses and the increase in the number of transport facilitators such as Delhivery, Ekart, Amazon logistics etc.
  • Sellers Gathering: These e-commerce platforms have united millions of small businesses, enabling them to sell their products online and benefit in return.

The challenges within,

  • Delivery issues: Rural areas mainly face this challenge due to damaged roads or a lack of logistic facilities for transport.
  • Cash on delivery: More than 60% of Indian users opt for cash on delivery which leads to risks in returns, refunds, failed deliveries or refusals.
  • Competitive prices: Heavy discounts during festivals leads to low profitability but at the same time providing no discounts can diverge the customers to offline stores or other online platforms.
  • Cybersecurity: There is a risk of customer’s data leaks or any breach in money transactions.
  • Customer acquisition costs: Heavy spending on online advertising and influencer marketing makes it expensive to drive customers.

The Future beyond,

  • Growth of tier-2 and tier-3 cities: Companies will now focus on regional language support and local deliveries which will result in the increase in number of customers from rural areas.
  • AI and personalization: The recommendations will become more precise and personalized and Augmented Reality(AR) will let users to visualize products before buying.
  • Quick Commerce: 10-min delivery apps such as Zepto and blinkit will try to be present at every location in the country. Currently they are present only in the metro cities such as Ahmedabad, Mumbai etc. 
  • Voice assistants: These platforms will enable voice searches so that illiterate or disabled people can also make use of these e-commerce websites.
  • Social commerce: People have now started selling products on social platforms such as Instagram, Youtube and Facebook. This will lead to higher adoption and and real time sales of products.

So, if you are thinking of starting an online business, then this is the best time to kickstart it. Low investment, higher potentials, multiple business models and growing online customer numbers everything is in favor.

Start with small, Brand it wiser, Focus on niche, and grow bigger!  

e-commerce
Published: February 5, 2025