Mobile commerce sales likely to hit $638 billion by 2018: Study

NEW DELHI: Global e-Commerce sales made via mobile devices are expected to cross $638 billion by 2018, according to a joint study by ASSOCHAM and Deloitte.

"Currently, the availability of e-Commerce applications on various mobility devices is helping to drive sales and revenue. E-tailers like Flipkart, Amazone and Jabong now get 50% of their revenues from consumers shopping on their mobile phones. Predictive analytics is helping the e-tailers to provide better solutions in real-time enabling compelling user experience even on mobile screens," said D S Rawat, Secretary General ASSOCHAM.

The e-Marketplaces are growing significantly with the increase in the Internet penetration and Smartphone usage. Internet enabled mobiles are making shopping a unique experience for buyers. e-Marketplaces provide a technology platform for sellers to participate and a trusted environment to scale up rapidly, increase profit and is highly valued by the customers.

The launch of wearables, such as Google Glass and Apple Watch, opens new opportunities for reaching out to customers. E-tailers would keep an eye on developments in this arena, although it might only be an urban phenomenon at the moment.

The non-inventory led B2C model also allows the e-commerce players to provide attractive discounts and offers which are difficult for inventory led brick-and-mortar shops as well as for pure e-Tailers.

According to a joint study “Global Powers of Retailing 2015,” online marketplaces rather than pure inventory-led companies tend to serve as the primary e-commerce model in Asia. The high costs of holding inventory, poor logistics and supply chain challenges in India are shifting the inventory-led companies and new entrants to adopt marketplace model. Also, e-Marketplaces work well in India due to high fragmentation on supply side.

The rise of online sales in the developing markets is encouraging retailers to go online for global expansion. The e-retailers are becoming exclusive partners for different brands. The Chinese Smartphone manufacturer, Xiaomi, entered Indian market through Flipkart e-Marketplace that helped to reach a large customer base in a short time. 43 Similarly, OnePlus teamed up with Amazon India for exclusive partnership.

Cash on Delivery (CoD) is the most preferred mode of payment in India with 45% of the shoppers using it while 21% shoppers opt for debit cards and another 16% go for credit cards. CoD mode has many issues ranging from high direct and indirect costs, security, or time taken to reverse logistics arising from CoD defaults.

More people have banking access due to the financial inclusion project - Jan Dhan Yojna of the government. Digital companies such Paytm, Videocon D2H, and telecom operators such as Airtel, Idea are entering the banking arena with payment bank license. Emerging cashless payment solutions will boost the e-commerce sector.