In the next decade, India is expected to become the third-largest country in terms of consumer expenditure. In that time, India will also become an increasingly value-driven economy, and almost 75% of consumption will be fuelled by a middle-class population that needs to see a strong value proposition for its purchase decisions.
How businesses adapt to the ever-evolving needs and shopping behaviours of consumers will determine the pace of recovery and future growth. This has always been the case, but the Covid-19 pandemic has brought about far-reaching changes on both these fronts, and it will be interesting to see how they guide business decisions and innovations going forward.
Will OTT and video continue to ride the growth wave as vaccines kindle the hope of normalcy? Will EdTech retain its strong foothold once schools reopen? Has the pandemic forever changed the way people travel? Will the focus on health and well-being result in more mindful living?
As we contemplate the future, the one thing that’s clear is that the pandemic has redefined existing notions of “essentials”. With most people fulfilling their professional and educational needs from home, electronic items, smartphones, computers and wireless peripherals have become essentials for working and studying.
Similarly, with family members having different personal needs, there is a growing requirement for multiple screens in a single household, as is reflected in the high demand for mobiles, tablets, laptops, and televisions. And as people spend more time indoors, there is strong demand for work-from-home furniture.
The way people shop for the traditional “essentials” has also changed and e-grocery got an unprecedented boost this year. Pegged at $550 billion, the grocery market is unorganised and has very low online penetration. The pandemic led many consumers to move online to buy “essentials” during the lockdown.
This trend has continued and is attracting the interest of many retail and e-commerce players in entering the grocery market. Rural India currently accounts for more than half of the total consumption. The pandemic has accelerated the pace of digital adoption for first-time users and fence-sitters by quite a few years. E-commerce penetration as a percentage of overall commerce in India is expected to reach 10% by 2024 – somewhere between $95 billion and $100 billion, in terms of dollar value.
As e-commerce reaches deeper into non-urban India, 60-70% of incremental growth is expected from these markets in the next four to five years. In a multicultural country like ours, the behaviours, needs and expectations of people vary widely between and within socio-economic strata. Consumers expect personalised content and services, and the convenience of availing them in their native language. Multilingual interfaces, hyper-localised content, voice-enabled search, and gamified content will, therefore, become integral elements of online experiences.
The pandemic has given a boost to the government’s Digital India campaign, too, and accelerated India’s progress in digitising business processes and the delivery of services. The year witnessed a huge increase in the number of prepaid transactions at a time when consumers have been keen to maintain social distancing.
Flipkart’s The Big Billion Days shopping festival this year, for instance, saw a 55% increase in digital payments and a 60% increase in customer savings through various bankled and mobile-wallet-led offers as compared to the previous year.
All these trends and observations suggest that e-commerce could become bigger than modern trade five years from now. And consumers have much to look forward to.
(Source: Times of India)