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Technology revolutionizing the e-commerce industry in India.

Technology revolutionizing the e-commerce industry in India

We live in an era where digitization is driving transformation across industries and e-commerce is no exception. With increased internet penetration, there is a rampant shift in consumer behaviour, that has widened the operational scope of the industry. According to a report by FICCI, the Indian e-commerce market is projected to reach $120 billion by 2026. As per other estimates, the Indian e-commerce sector is estimated to surpass its American and Chinese counterparts by 2033-2034.

Retail players are now going head-to-head against each other by enhancing customer experience, easing access, using digital analytics and devising attractive promotional offers. Emerging and fast-growing technologies like Artificial Intelligence (AI), Data Analytics, and online payment gateways like Unified Payments Interface (UPI) are driving the next growth revolution in the e-commerce domain in India. With this, companies today are heavily leveraging these technologies to influence consumer behaviour, strengthen supply chains, and heavily upscale their businesses in Tier 2 and 3 markets in India.

Personalising customer experience with AI

AI is one of the main technology frontiers that has significantly transformed e-commerce in recent years. Today, consumers get best-in-class, customised, and seamless mobile commerce experiences, thanks to slick AI tools. E-tailers have greatly benefited from AI in ways including increased internal productivity, demand forecasting, business intelligence, improved pricing and better product positioning.

Thanks to cutting-edge analysis capabilities made possible using AI, now, e-stores never have too much or too little inventory. E-commerce companies and brands have used these AI tools to build intelligent warehousing and inventory control protocols. This tool further helps them maximise profitability and streamline the processing of product returns. AI tools are not only limited to inventory management, but they have optimised logistics and supply chains for efficiency. As per reports, AI applications in logistics and supply chains are growing at a CAGR of 24% projected to touch $12 billion by 2027.

Targeted approach with data analytics

Modern data analytics tools study consumer behaviour through their online shopping habits like product preferences, browsing history, and the time they spend on a webpage. Predictive analytics are then used to thoroughly customise marketing campaigns focusing on individual or group shopping habits. Such methods are successful in striking a chord with the consumer to increase sales.

For instance, if a certain group of individuals from North India generally search for air-conditioners or refrigerators during the onset of summer, e-commerce apps and websites will be quick to grab this data and use it to push sales. They will apply this consumer behaviour to curate special advertisement campaigns and offers woven only around air-conditioners and refrigerators for these people living in North India. Thus, as the website is able to pack such a narrative around what a consumer desires, the chances of converting sales increase.

Simplified and secure payments keep the registers ringing

Indian consumers majorly have a cash-oriented mindset and were reluctant to make online payments owing to the lack of secure gateways and complex payment processes. This was a serious challenge for companies trying to create an omnichannel presence for their brands. According to research, 52% of customers abandon their cart if the checkout and payment process is overly complex.

Third-party secure payment gateways and wallets have addressed this problem by making transactions safe and hassle-free. Additionally, UPI has revolutionized the payments system in India that allows large sum peer-to-peer and person-to-merchant transactions at zero charges. UPI, being an open-source application programming interface (API), and multi-platform compatible, empowers all types of businesses and consumers to make transactions seamlessly. As per the economic survey 2021-22, UPI is the only largest retail payment interface in India. Research also shows that UPI has increased the everyday spending capacity of its users, marking a massive shift in consumer behaviour.

Closing the ‘virtual gap’ with AR/ VR

Most of the checkout items do not convert into sold items and two-thirds of items get returned owing to incompatibility issues. Virtual reality (VR) and augmented reality (AR) have the potential to reshape the world of retail by providing a close-to-real-life look and feel of the products enhancing the entire online shopping experience. Online retailers can build virtual stores, offering customers a virtual experience that is just about as close to heading out to a physical store that one gets from the comfort of home.

IKEA already has an AR catalogue app running that allows consumers to check how certain items of furniture would look in their homes. Consumers can virtually visualise how these items will look and, more importantly, how they will fit in their homes according to the product’s dimensions and specifications.

To sum up

While the “E-comm giants” like Amazon, IKEA, and Flipkart have made significant headway in digitally optimising every aspect of their operations. Small players like Meesho and Shopify are also producing tech-enhanced solutions to individualize the online shopping experience and democratize online shopping by expanding in tier 2 and 3 markets.

Technology tools have created a win-win ecosystem for customers, businesses, and merchants in this space. With the increasing integration of big data, artificial intelligence, virtual reality and slick payment gateways, the e-commerce space has become bigger and business is booming more than ever. E-commerce is now not what made people apprehensive, but these tech interventions have made it more accommodating and popular amongst buyers.

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