The e-commerce market in India is expanding and growing at an exponential rate. The market is attracting retailers to start their online stores to boost their sales and at the same time, it is attracting consumers to shop from their homes at their convenience. Although India is the second most populous country in the world, the per-capita purchasing power of the country is lower but still, it is emerging as one of the top grossing and trending e-commerce markets in the world.
Although India’s e-commerce is constantly growing, e-commerce businesses and retailers are facing major problems in the market due to which it is not easy for them to place their legs comfortably in the market and do business. To promote awareness among people regarding the challenges that e-commerce businesses are facing in India, we will be discussing a few of them below:
Cash on Delivery Is Still The Preferred Mode Of Payment
The first major and common challenge faced by e-commerce and online retailers is the preferred mode of payment. For a huge majority of online consumers in India, the most common and preferred mode of payment still remains Cash on delivery to this day. In India, most consumers prefer to pay cash once they receive their package. It could be because of low credit card diffusion in the country, low trust in online transactions, and people not being aware of the convenience of e-wallets.
Unlike electronic payments which are easier to manage and deposited directly into the bank account, manual cash collection is a tedious and laborious problem for delivery riders, especially when they have to search nearby areas for change.
Low Internet Penetration
Compared to the likes of western nations such as the US, UK, France, Germany, and many others, internet penetration in India is quite low. Even if we compare the internet penetration in India to its population, the numbers are still quite low. Only a small percentage of the total population in the country can easily and readily access the internet. Moreover, the internet quality is not uniform in all regions of the country. In metropolitans and major cities, the internet is quite fast but in rural areas, users face a lot of connectivity and speed problems.
However, this is a problem of the present only as this is soon going to disappear in the upcoming years. In the past couple of years, internet penetration has improved substantially in the country and as internet prices have decreased in the country, it is expected that this problem will soon disappear from the list of challenges faced by the e-commerce industry.
Customers Returning Packages
Since a lot of consumers in India are first-time buyers and not return buyers, they are not aware of what kind of products they will be getting and whether the products they are ordering will meet their expectations or not. When such first-time buyers buy from e-commerce websites, they fall prey to the product listing, feel regret about the product they ordered, and return the package.
It is not that the retailers are sending the wrong products, it is just that first-time consumers are not aware of the product quality, size, or color due to which they opt to return them. Returns are extremely expensive for online retailers, especially in cross-border online shopping.
Incomplete Addresses
This problem is faced mostly by delivery companies & couriers and not e-commerce retailers. Nevertheless, it is a huge problem as many times consumers forget or fail to mention their complete postal addresses due to which it can be difficult for delivery riders to deliver the order to the exact location, which is why you usually get a call from the company asking about the exact location.
A Huge Number Of People Still Own Feature Phones
The number of mobile phone users in India is extremely high and most might think that it is a good thing as most people can access the internet and order from the internet but that’s not the case. Although the number of mobile phone users in India is high, a huge number of people still use feature phones instead of smartphones. The group of people who own feature phones are the ones who are not able to make purchases from their mobile phones.
To be able to access the internet and shop from the internet, you need to have a smartphone. A feature phone will at most allow you to make calls, send messages, or play simple games like Spider Solitaire that come pre-installed.
The good news regarding this challenge is that the number of smartphone users is rising in the country. Many foreign manufacturers have started smartphone production in India. India is capable of manufacturing highly powerful smartphones at affordable prices, which means that soon this problem will also disappear and the demand for online shopping will increase as did the demand for board games like Solitaire during COVID.
Delivery Issues
Delivery issues still persist in the country, even after the e-commerce industry became so popular. Timely delivery is a problem in the country because of incomplete poor infrastructure, roadblocks, and remote locations which can lead to consumers becoming angry & frustrated and canceling the order. An annoyed and frustrated customer base can be a considerable problem if packages are not delivered to them on time.