eCommerce Shopping is Now Emerging in Rural Parts of India

In the past few years, India has seen something akin to a revolution in the online shopping market. Many Indians are moving online and they are spending money on stuff. However, in spite of India’s massive eCommerce boom, the country’s tremendous eCommerce growth has not reached rural Indian where the concept of online shopping is still largely unheard of in some villages. Yet rural Indians are buying things even if they do not know about online retail websites, VISA or MasterCard or even PayPal.

Because the majority of Indian population still lives in the rural areas, the true potential of India’s online shopping will only be unlocked if Indian retailers can figure out ways in which to reach out to the often underserved rural market that is a fast gaining currency is a viable online market to be reckoned with.

It is not all a lost cause as far as rural Indian eCommerce penetration is concerned, however. There are certain large Indian e-retailers that are slowly making some inroads into the Indian rural market. These include the big players such as Amazon, FlipKart and Snapdeal. On the other hand, there are various Indian start-ups that have solely focused their efforts on the country’s rural market such as Inthree. Players like iPay offering cash payment & fulfilment which also creates opportunity for rural customers to buy products without plastic money online.

Government has a Role to Play

In India, there is a tie-up between eCommerce companies and the Indian government in order to roll out eCommerce services into the rural areas. This is because it might not be quite profitable for eCommerce companies to go it alone in places with poor infrastructure and where they are likely to spend more money on marketing and penetration. These tie-ups smoothen the way for these online eCommerce shopping companies to roll out their services in places that they would ordinarily ignore.

The Indian government has also made it easier for foreign eCommerce companies to come here and set up shops in the country, particularly in the rural areas.

The Role of Indian Postal Services

In the urban areas of India especially the big cities such as Mumbai, New Delhi or Bangalore, eCommerce companies can simply charge low and competitive shipping costs and deliver the products themselves. However, in the remote rural villages in India, this business model is not necessarily feasible. It would amount to very high shipping costs that either drive down the margins or drive away the customers. For many of these companies working hard to penetrate the rural Indian market, the Indian postal service has come to the rescue. Traditionally reliable and cheap, the Indian postal service infuses the much-needed reliability and competitiveness when it comes to shipping eCommerce products to end consumers in the remote villages in rural India.

Global e-retailer Amazon has found great uses for India’s postal infrastructure in its eCommerce deliveries. Most of Amazon’s deliveries in rural India are done via India-Post which has a ubiquitous reach in the country. It is important to note that a whopping 89.7% of post offices in India are situated in rural India which gives eCommerce companies a vast infrastructural network to work with. Thanks to these new opportunities in eCommerce, India-Post has also increased its reliability and quality of service substantially. For example, buyers are able to track their consignment sent via India-Post online and they are able to send stuff all over India.

Required Improvements in the Indian eCommerce Landscape

A lot of challenges facing eCommerce growth in rural India are infrastructure-related. Thus, when addressing the problem of growth in rural India, it is important to bring in the government and infrastructure providers into the discussion. There is a lot that needs to be done in order to boost rural eCommerce growth. These include the following:

• Making strategic investments in internet/broadband penetration in rural India. The government can, for example, provide strategic incentives to internet providers in rural India.
• Develop strategies and roadmap for promoting eCommerce growth in rural India. This should be a multi-stakeholder effort incorporating the Indian government, eCommerce companies, local state governments and infrastructure providers. Even consumer advocacy groups should be involved in the process.
• Using available resources and data in order to promote policy development and initiatives to boost rural eCommerce. For example, the use of the India-Post logistical infrastructure.

One of the initiatives that have taken off in the recent years is the campaign to connect every village in rural India with broadband which is spearheaded by BSNL. So far, more than 600 districts have been covered.

Explore the Opportunities of Mobile Internet

While the vast majority of Indians may not have broadband connections, they access to mobile phones which can present a unique and massive opportunity e.g. through a retail shopping mobile app which can be used anywhere in India. With the mobile internet users growing by 33% in the rural areas of India, this is an opportunity that cannot be missed.

When all these efforts are synergized, the Indian rural market will undoubtedly emerge as the next frontier in eCommerce.