Biggest Challenges Faced by E-commerce Industry in India  

21 Dec, 2018
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E-commerce Industry Challenges

With the e-commerce industry in India rising at a booming rate, more so with the invasion of highly-sophisticated gadgets and faster-than-light internet. However, still, the e-commerce industry in India lags far behind compared to the western countries. There are several challenges faced by e-commerce industry in India that come in the way of Indian online stores and merchants.

Among factors that bother India online shoppers, safety and security of online money while transacting is the biggest concern. Apart from them are quality of products as the online shoppers can't really touch and feel the products they want to buy.

Although the majority of e-commerce platforms in India have been hit by the challenges I am going to discuss below, there are a few like Snapdeal, Flipkart, Myntra, Yatra, and more have overcome these challenges and appear fairly victorious.

 

6 Challenges Faced by E-commerce Industry in India

 

1.         Lack of Awareness

 

When it comes to the ratio of people having awareness of internet and online shopping, the scenario isn't quite flattering. Majority of Indian population is still not aware of internet's existence and its uses. Even when you talk about the internet savvy urban population that are having smartphones, awareness of online shopping and its functionality is still a far cry. Most of them aren't aware of the online fraud and corruption while making online transactions and thus the darkness prevails. This is by far the biggest challenge faced by e-commerce industry in India.

 

2.         Inadequate Plastic Money Holders

 

While all major e-commerce platforms require a debit card, credit card, net banking, and mobile wallets to operate; there aren't enough plastic money holders in India. This is one of the biggest challenges in the growth of the e-commerce industry in India. While on the upside, all major nationalized banks have started giving out debit cards to all its account holders and encourage its use. This is definitely a positive sign to overcome challenges faced by the e-commerce industry in India.

 

3.         Cash on Delivery

 

In order to curb the problem of security of online transactions, all e-commerce portals started this option of Cash-on-Delivery (COD) wherein an online shopper can skip paying online while placing an order and choose to pay at the time of delivery instead. Although this initially seemed to be exciting for the e-commerce platforms as well as users slowly it became a boon for them.

 

Many of the customers refused to pay money at the time of product delivery which resulted in heavy losses incurred in product transit and eventually losing out on sales and revenue. It is one big challenge faced by e-commerce industry in India that has both its pros and cons.

 

4.         Online Security

 

While big e-commerce players can afford to have security software that offers enhanced security for its customers while transacting online, many small e-commerce setups and small business owners ignore the importance of authentic security software.

 

Transacting at such platforms can be extremely risky and is prone to the Trojan and malware attacks comprising a user's financial details' insecurity. To overcome this challenge faced by e-commerce industry in India, SSL certification must be made mandatory for all e-commerce platforms.

 

5.         Touch & Feel Constraint

 

India buyers demographics is such that they want to touch and feel the product before buying it to be assured of its looks and quality. However, online booking and ticketing business in India grew as it didn't suffer from these constraints but e-commerce platforms selling apparels, jewelry, cosmetics, and accessories are still struggling with these challenges faced by the e-commerce industry.

 

6.         Fear factor

 

Despite the awareness happening in the world of e-commerce and online shopping, there are still many not able to overcome their fear of transacting online. They are usually reluctant of disclosing their credit card, debit card, and net banking details online due to the fear of being duped. This largely remains as one of the biggest challenges faced by e-commerce industry in India.

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