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As part of our #Outlook16 series, we asked e-commerce companies – Amazon India, Snapdeal and eBay India — about their focus areas for 2016, and the challenges that the online e-commerce ecosystem needs to address. Answers have been edited for brevity.

What have been the top developments for the sector in 2015? How has the sector changed from 2014 to 2015?

Rajnish Wahi

Rajnish Wahi

Rajnish Wahi, Snapdeal

2015 has been an exciting year for e-commerce players. Top developments for the sector in this year are:

– Smartphone led internet penetration continued to drive e-commerce growth, evident from the share of volume coming from tier 2 and beyond.
– Customer experience is becoming the key differentiator in the sector (as opposed to deals/discounts in 2014).
– Online shopping has broken age and gender barriers. More and more women are coming online to shop. The older population has also shown inclination towards making digital purchases.
– There has been a significant increase in high-value purchases online.
– There is a lot of willingness and proactive engagement by the government to identify and resolve issues that may stymie relatively young businesses.

Vidmay Naini, eBay

2015 witnessed e-commerce companies shifting focus towards a sustained growth strategy hereby moving away from heavy discounting and cash-back options.  

What were the biggest challenges for the sector during the year?

Rajnish Wahi, Snapdeal

– Last mile connectivity in many areas remains an issue. Limited air cargo capacity and gaps in infrastructure need to be plugged to meet exponential growth in demand.
– Data connectivity is still low or poor quality in many regions.

Amit Agarwal, Amazon

The challenges in the last year have not been very different from 2014 and largely focus on:

– How do we enable our sellers to offer a huge selection at low prices? What services can we offer them, so they are able to meet their and our promise of reliable and timely delivery?
– How do we continue to deliver to our promise of anything, anytime, anywhere in the shortest possible time?

Vidmay Naini, eBay

The growth in the ecommerce business is not at par with the growth of the ecosystem. For instance, logistics capacity and reach has not kept pace with the ecommerce volume growth. Another challenge facing the industry is customer loyalty.

What were the trends that surprised you in 2015?

Rajnish Wahi, Snapdeal

E-commerce has become an essential element of marketing mix. Even non electronic brands are now reaching out to us to help them launch new products.

Vidmay Naini, eBay

I was surprised to see the valuations of few companies that raised funds in early part of 2015 increase significantly within a short period of time where fundamentals of the business have not significantly changed.

How has your relationship with the brands changed in 2015? What are your observations?

Rajnish Wahi, Snapdeal

Brands have embraced e-commerce in 2015, recognising it as an essential element of marketing mix. This trend extends across categories such as electronics, FMCG and fashion. The most successful brand partnerships for us this year were Maggi, Micromax, Infocus, Coolpad, Xolo and others.

What were your key learnings in 2015?

Rajnish Wahi, Snapdeal

– The key learning in 2015 was that customer experience is going to be the prime differentiator in this market. We therefore refreshed our UI/UX completely and made significant investments in logistics and supply chain management.
– Another key learning was the importance of partnerships for building a digital ecosystem.

Amit Agarwal, Amazon

A global learning that we have is that India as a market is no different. Even though e-commerce in India is new, the customers are as evolved as anywhere else globally. They care about selection, low prices and fast and reliable delivery. Likewise, the small and medium sellers’ base here in India is as evolved in their thinking as anywhere else in the world, even though they are new to online retail. They care about sales, profitability and a fair and transparent platform to operate.

What trends do you expect to see in 2016 and why?

Rajnish Wahi, Snapdeal

On e-commerce, the percentage of repeat transactions will significantly go up. In terms of payments, consumers will move from the habit of cash to e-cash as they get used to a superior customer experience with digital transactions compared to experience with cash.

Amit Agarwal, Amazon

– Improving access to ecommerce for the underserved communities
– Mobile will continue to play a critical role
– Building the hyperlocal experience
– Improving the last mile delivery network
– Getting SMEs online

Vidmay Naini

Vidmay Naini

Vidmay Naini, eBay

– Majority, if not all e-commerce companies, will rush to pivot to an asset light model to shore up their operating margins.
– The number of offline players coming online would grow substantially and this trend will continue.
– A lot of hiring based on people’s capability and differential skills among top e-commerce players.
– Development of supply chain management and adoption of the omni-channel strategy.

Is your company still doing exclusive tie-ups with brands? How has it helped in 2015? Do you intend to continue with exclusive tie-ups in 2016 as well?

Rajnish Wahi, Snapdeal

Exclusive tie-ups with brands enable us to offer superior value proposition to our customers. In 2016, we foresee even more brands across categories partnering with us to offer exclusives.

What was the split for transactions and traffic for mobile, mobile web and web in 2015?

Rajnish Wahi, Snapdeal

About 75% of the daily orders come from mobile platforms today – but desktop still contributes to a big chunk of orders over Rs 10,000. We have also observed that the product discovery of 25% of the orders placed through mobile actually happens on desktop. Most of the growth in tier 2 and beyond is smartphone led.

Amit Agarwal, Amazon

Today 70% of the traffic on our platform comes from mobile. 

Vidmay Naini, eBay

The average mobile traffic is above 61% and the transactions continue to grow significantly faster than desktop.

What trends have you noticed in terms of the mode of payment used by customers? How have they changed since 2014? Please give us the percentage split for the orders segmented by different forms of payment methods (netbanking, wallet, credit card, debit card) for 2015. How do you expect this to change in 2016?

Rajnish Wahi, Snapdeal

In September 2015, we launched the Freecharge wallet and witnessed more than 10 million downloads in less than 10 weeks, the number of wallet downloads now stands at 12 million. In 2016, customers will prefer to do repeat transactions through digital wallets because of convenience and safety. Already, over 60% of Freecharge consumers are monthly repeats, with an average of over five transactions a month. Nearly two out of three visitors end up transacting and 86% of users are from mobile. These trends will further accelerate in 2016.

Vidmay Naini, eBay

Mobile wallets as a payment option has grown the fast in 2015 albeit still as small % of total online payments with significant headroom for growth in 2016. Now mobile wallets out number active debit and credit cards.

Which categories and sub-categories are likely to be the key drivers of growth for your company and for the sector in 2016? Why?

Rajnish Wahi, Snapdeal

Electronics will continue to have the highest share of volumes in 2016. However, fashion category has the fastest growth rate as of now and will continue to do so. In fact, fashion is the most popular category among first time users, therefore it will be a big focus for us.

Amit Agarwal, Amazon

Categories that grew disproportionately this year include Consumer Electronics & PC, Fashion, Consumables, Home & Kitchen. Fashion specifically grew at 500 % – 700% over the year.

Vidmay Naini, eBay

 I see refurbished and global supply grow significantly in 2016 especially in the unique inventory and details that ebay.in provides through global supply.

How do you plan to deal with the increasing pushback from physical retailers in 2016?

Rajnish Wahi, Snapdeal

Technology is rapidly blurring the lines between offline and online retailing. In October 2015, Snapdeal unveiled its omni-channel platform called ‘Janus’. In 2016, we are looking to expand our omni channel offerings with more partnerships.

 

Image SourceG L Barone under CC BY ND 2.0