Drivers Promoting the Growth of India’s E-commerce

By | May 13, 2011

In India, e-commerce is growing significantly year on year. Online advertising and purchasing has been increasing in India with increase in Internet penetration rate. The growth of e-commerce in the country is further expected to increase. However, certain major drivers like easy Internet access, Internet penetration growth, payment security, and increased brand trust promote its growth.

a) Easy Internet Access
Internet access has become easier than before. This has increased the number of people using the Internet in India. Internet has become the efficient platform for collecting information, sharing information, reading and writing reviews, and comparing features and prices of the products and services for taking right decisions. Many people in the country are interested to purchase various standard commodities through the Internet. Though online shopping does not provide the feel and touch of the product, it is used by most of the people in India too. Increase in awareness of the importance of Internet also promotes the growth of Indian e-commerce.

b) Internet Penetration Growth
According to the Internet World Stats of 2010, India is the 4th largest country in terms of Internet users. 8.1 crores of people were using Internet as of 2010 in India with a penetration rate of 6.9%. According to the IMRB international’s estimates, the claimed Internet users number will reach 30 million and the number of active Internet users (who have used Internet in the last one month) are expected to touch 24 million by December 2011.

Many people are realizing the benefits of the Internet and they share the information with other people. Also, the growth of broadband connection is also one of the major factors that help in increasing the growth of Internet penetration.

c) Payment Security
The main reason for not using Internet in India is lack of awareness of the importance of Internet. The next major reason is the payment security. Most of the people are afraid to buy a product or service online because of the payment security. But security payment gateways protection from online fraud of theft of data. Also, security checks built in the payment process give a feeling of security about e-commerce to people. So this is one of the drivers which enhances the growth of e-commerce. There has been an improvement in payment security issues. Online payments evolved from merely having to remember a single password to validating the password on multiple platforms including mobile phones, mails and other smart devices.

d) Increasing Brand Trust
This is the other key factor increasing the growth of Indian e-commerce. With increase in trusting brands for online transactions, there are more chances of purchasing the products or services online. Various companies have been promoting their products and services through online advertisements. This in turn enhances the growth of e-commerce in the country. In India, online banking and traveling transactions have become more prominent.

With these factors, it is estimated that the e-commerce business in India will grow in future.

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