JOIN USThe country’s roaring ecommerce industry took a slightly meticulous approach in 2016, and a multitude of acquisitions played a rather pivotal role in the shaping of it.
The biggest was online fashion portal Myntra’s acquisition of rival Jabong for $70 million. Such consolidations were also witnessed when Oyo Rooms acquired Zo Rooms, FirstCry acquired Mahindra BabyOye, Foodpanda got acquired by Delivery Hero and QuikrHomes acquired Grabhouse, among others. Globally, in a year that did not see many new shoppers coming online, companies took the acquisition route to grab larger market shares and achieve mutual benefit in terms of leveraging technology.
Growth in 2016 was simply led by existing shoppers increasing their basket sizes, a good share of which was a result of ecommerce companies’ focus on delivering customised and personalised experiences to their customers. “While the journey of personalisation began two years ago, the role of analytics in the process improved in 2016, making it more effective,” said Nitin Kochhar, VP – Categories, ShopClues.
Role of analytics
“Big data analytics is increasingly helping companies cater to consumers through product recommendations in a more personalised manner by directly tapping into their buying behaviour. Analytics help in targeted customer engagement and also facilitates a personalised e-retail experience,” online grocery platform BigBasket said.
As focus on personalisation increases, cash burn by means of heavy discounting has started to become a fading reality. Having onboarded masses from the metros onto the ecommerce train, companies have consciously started shifting focus to tier-II and tier-III cities. As per industry reports, there has been a rise of 30% to 50% in ecommerce transactions in tier-II and tier-III cities.
Snapdeal Senior VP (Business) Vishal Chadha said, “2016 was an important growth year for the Indian online shopper — be it in terms of new customer segments adopting online commerce or increased acceptance of digital transaction methods. The delivery of functional benefits like speed, convenience and value also resulted in massive growth from non-metros in India.”
A good share of this expansion is driven by increased smartphone penetration, which is in turn causing a shift towards m-commerce. In 2013, only 5% of the ecommerce transactions were made through mobile devices, and that figure has touched 13% in 2016.
A jolt to ecommerce and online transactions came with the announcement of demonetisation, which slowed the industry down for about two weeks. Indian ecommerce is still driven by cash-on-delivery with over 50% of online shoppers opting for it. The teething period for demonetisation, i.e. the first two weeks saw the industry topline hit by around 30%, informed Kochhar.
“While demonetisation did have an impact, companies have been quick enough to take corrective measures. For Myntra and Jabong, if card machines were deployed for about 10% of the orders, we increased it to 50% to make it easier for the customer,” Myntra CEO Ananth Narayanan told DH.