2020 has been a watershed moment for e-commerce and allied segments. The pandemic forced offline businesses to build or accelerate their online presence as a route to market.
In the past five years, the segment has consistently surpassed expectations regarding onboarding consumers, GMVs, adoption of new technologies, fundraising, and valuations. And now with the pace of digital adoption across sub-sectors. Let’s take a quick look at a few future trends that we expect will take shape in the eCommerce space.
Education no longer a child’s play!
This year education went online and how! The segment has proved its mettle by expanding its footprint and adoption across the ecosystem. With 3,500+ ed-tech startups in India today, the sunshine segment is growing brighter and meeting aspirational India’s needs. The segments cutting across – K-12, Coding, B2B (schools, universities), Test preparation, Upskilling, reskilling have all seen significant traction and growth. Companies are using deep learning insights and applying tech including AI/AR/VR, behavioural analytics, to improve product and monetization in early stages, deliver content through the human-centric design process, and gamify to increase engagement and enhance the experience. The segment is also likely to develop an omnichannel approach to scale up. M&A and consolidation will continue as players look to expand; both overseas and in India.
The fintech juggernaut
Adoption and expansion of allied services by fintech players have been remarkable, and some are on their journey to be super apps. The segment which previously relied mostly on payments, wallets, and lending is now witnessing expansion into insurance tech, wealth management, stock trading, neobanks, gold backed-lending, and. are expected to disrupt business, consumer banking, financing, and lending. Expect to see further expansion in sachet size products, including bite-size insurance, working capital/credit lines, wealth management, gold loans, payday loans, etc. This data-rich segment will have a significant impact and potentially give rise to more bespoke and innovative offerings, especially for tier-2 and beyond cities.
Here and now
Hyperlocal players have played a vital role during these testing in ensuring that products and services reach our doorstep even though we could not step out. There is a continued appetite for on-demand services given the strong adoption, habit formation, ad-hoc needs fulfilment, and general customer stickiness. Expansion of delivery points via the digitization of Kirana stores will be a crucial expansion strategy, including building a newer portfolio of services. Consolidation is expected to increase, including the entry of traditional players into space.
Doctors without borders
The pandemic has reinforced the proposition of health tech and healthcare at home. Companies are trying to shift healthcare delivery online, incentivize telemedicine, encourage e-pharmacy and e-diagnostics. In the future healthcare will be delivered to remote points using hybrid virtual-physical models. There has also been a rise in deep-tech and smart devices, including wearables, that will permanently change health management. This is another data-rich segment where we will undoubtedly witness predictive analytics and a data-driven approach to healthcare.
Online mega mall
The nation-wide lockdown took retail therapy online pushing the omnichannel and D2C approach at the forefront of retail expansion. With the rise in D2C, expect to see more niche and bespoke products. While the advantages are apparent, brands will need to ensure a consistent shopping experience across channels and keep customer acquisition costs low to rise above the crowd. Companies in the space are adopting innovative methods to attract customers and expect a rise in trends such as video shopping, social media/influencer-led shopping to become more mainstay and provide customers with a more immersive and in-store shopping experience online. Make in India for the world will pick up with export-led themes to international markets.
With a little help from friends
Social led models broaden the reach of eCommerce for Indian consumers and provide users with comfort and trust. The segment helps drive demand and empower millions of small and medium entrepreneurs who are a trusted middle source with curated products—connecting SME vendors and brands to their consumer cohort. These models have witnessed much lower customer acquisition costs yet ensuring high-quality customer experience, right-priced strategies, insight-driven demand generation, and seamless backend integration; this helps provide positive unit economics and hyper-scale. Expect trends such as video and picture tagging features to be more entrenched, along with increased features on chat platforms to enable a more seamless shopping experience. Vernacular will play a significant role as well in this segment.
Business and Agriculture goes digital
Digital enterprise solutions also witnessed ramp up and provide a significant opportunity for SMEs to scale, generate greater demand and sales. Companies focus on digitalization opportunities across the value chain – from procurement, compliance, end-to-end logistics, business process efficiencies, automation, etc. The retailer digitization journey has an essential impact on the B2B supply chain and an enabling driver for the growth of retailers to the consumer side. Supply chain digitization will be immense growth and efficiency lever and will also address the fundamental issue of product discovery.
Similarly, agriculture is getting a digital makeover to bring in much-needed supply chain and farming efficiencies and provide a gateway into the future of agriculture with tech-enabled farm-to-fork models both on the input and output side.
As heavyweights and new entrants make a more in-depth play into the segment, bundling and unbundling services, building diverse portfolios, bringing efficiencies into the game; bodes for an exciting road ahead for eCommerce companies. The pandemic has pulled forward the adoption of digital with consumers and shortened the time frame from Interaction to transaction. Integrated service offerings will likely keep new online consumers engaged and help grow the penetration and stickiness of the segment.
–Ankur Pahwa is an E-commerce Sector Leader at EY India. Views expressed are personal.