Booming Indian consumer market comes with opportunities and challenges for e-commerce brands

Booming Indian consumer market comes with opportunities and challenges for e-commerce brands, as per Pallavi, SPPL

DQI Bureau
New Update

With a population of 1.2 billion people, India offers immense potential for e-commerce brands in the electronics industry. The market is one of the fastest growing in the world, although currently, only 6% of India's $900 billion retail market comes from e-commerce. However, experts predict that the number of online shoppers in India will rise to a staggering 500 million by 2027. This presents a significant opportunity for e-commerce brands to tap into this vast consumer base.


One of the key factors driving the growth of e-commerce in India is the increasing popularity of apps that offer quick delivery of groceries and other essentials. As more consumers embrace online shopping, the demand for electronics products is also on the rise. From smartphones and laptops to smart home devices and wearable tech, the Indian consumer market is hungry for innovative electronics.

There is an opportunity for e-commerce brands to focus on the production of smart TVs that integrate internet connectivity and streaming services. By capitalizing on the growing demand for mid-range smartphones and laptops, brands can leverage their expertise in electronics manufacturing to produce high-quality consumer electronics at value pricing. Additionally, the government's initiatives, such as the Production Linked Incentive (PLI) scheme, provide incentives for domestic manufacturers to invest in TV production. With strategic partnerships and a focus on innovation, e-commerce brands can tap into the potential of the TV manufacturing industry in India.


However, along with opportunities, e-commerce brands also face challenges in the Indian market. One notable challenge is the high rate of product returns. Consumer remorse is prevalent, particularly among new buyers in India. This poses a significant hurdle for e-commerce brands, as managing returns can be costly and time-consuming.


To tackle this issue, brands need to focus on improving product quality, providing accurate product descriptions, and enhancing the overall shopping experience. This should also be supplemented by setting forth guardrails for return of products by e-commerce platforms as well.

Another challenge is the preference for cash on delivery as a payment method in India. While digital payment methods are gaining traction, a significant portion of the population still prefers cash transactions. This poses logistical challenges and increases the risk of fraud for e-commerce brands. Finding ways to incentivize digital payments and building trust among consumers is crucial to overcome this challenge.

Furthermore, India's low Internet penetration and poor connectivity in certain areas present obstacles for e-commerce brands. While major cities have better infrastructure, smaller towns and rural areas often struggle with internet access. This creates a digital divide and limits the reach of e-commerce platforms. The government is working hard towards digitizing India and should also simultaneously work towards improving internet infrastructure in such areas as well as ground connectivity to ensure seamless delivery across the country.


Promising outlook

Despite these challenges, the potential for growth in the Indian electronics e-commerce market is promising. The demand for electronics products is expected to rise exponentially as more consumers gain access to the internet and embrace online shopping. Moreover, with the government's focus on digitalization and initiatives like Make in India, the electronics industry is set to flourish. E-commerce brands that can adapt to the unique characteristics of the Indian market and provide exceptional customer experiences will undoubtedly thrive.

In conclusion, the Indian consumer market presents significant opportunities for e-commerce brands in the electronics industry. With a rapidly growing market and a vast consumer base, brands have the chance to tap into India's booming e-commerce sector. However, they must also navigate challenges such as high product return rates, the preference for cash on delivery, low internet penetration, and poor connectivity. By understanding the market dynamics and addressing these challenges, e-commerce brands can establish a strong presence and capitalize on the immense potential of the Indian consumer market.

-- Pallavi Singh Marwah, VP of SPPL