E-commerce firms leverage IT to drive growth

by Sohini Bagchi    Jul 27, 2012

ecommerceThe e-commerce industry in India is set for a boom time and the rate at which it is growing has prompted e-commerce firms to invest considerably in this space. A recent Zinnov study noted that in the next 12 years, e-commerce growth will increase from $10 billion to $125-260 billion with an increased usage of online shopping and purchase. In order to remain competitive, most enterprises in the e-commerce space are heavily investing in advertising, marketing as well as technology, noted Zinnov.

The study showed e-tailing is growing tremendously and will account for 50 percent of the e-commerce by 2015 as compared to the current 22 percent. “E-commerce has experienced stupendous growth in recent times in India and we do not see this growth slowing down anytime in the near future. Scale is certainly necessary to survive in this business and India presents that scale to anyone who is serious about this business,” said Praveen Bhadada, Director-Market Expansion, Zinnov.

The study noted that technology has turned out to be a key enabler for e-commerce players and an obvious answer to some of their problems. Zinnov believes that third party managed logistics services will prevail in the industry as most companies struggle to invest into inhouse logistics upfront and said that a number of specialist e-commerce logistic companies will evolve in the coming years to meet these needs.

Leading online e-commerce company Flipkart is building more capacity in supply chain and logistics, upgrading technology capabilities and expanding marketing initiatives. According to Sachin Bansal, CEO, Flipkart, with consumers increasingly shifting their purchases online, it is imperative for the company to take it to the next level through technology innovation. He added that the company would also invest in its social marketing initiatives to build a customer base across the country.

Like Flipkart, other enterprises in the e-commerce space such as Myntra, Indiaplaza, CBazaar and Homeshop18, among others, are also aggressively investing in upgradation of technology.

K Vaitheeswaran, Founder and CEO, Indiaplaza, a multi-products e-tailing site believes that there is a need to have a strong technical team in place to counter the common challenges facing e-commerce companies. He pointed out that in order to remain competitive e-commerce players need to integratie Web with the mobile, deliver better content and offer customised services.

Many e-commerce companies believe they are a part of the technology ecosystem, rather than retail. “We are a 60 percent technology based company and 40 percent retail entity. Technology plays an important role in every part of the business. We have deployed ERP, SCM and loads of inhouse applications to stock our products in the warehouse, connect with the customers, and digitise our marketing and sales,” said Rajesh Nahar, CEO of CBazar, an online garment store.

Security is another area that e-commerce players are looking into seriously. Sundeep Malhotra, CEO and founder Homeshop18.com commented, “As the fear of cyber crime increases, the industry must ensure that its online transactions procedure is secured. It is important to have a strong security mechanism in place if you have to run an e-commerce venture in India.

The Zinnov survey noted that mobile and social media platforms will continue to play a key role in driving the growth of the Indian e-commerce industry and e-commerce players are leveraging these technologies will stay afloat.

However, to maintain a sustainable growth in the e-commerce sector, Malhotra pointed out that the Internet is the vehicle on which e-commerce will reach the next billion population in remote areas of our country, and therefore, the need of the hour for the government is to provide subsidies and encourage growth of Internet to emerging markets within India.