> Step-by-Step Instructions for Starting a Business in India, Focusing on E-Commerce Trends in India and New Business Models
> India has welcomed investments into the e commerce industry with arms to spur its rapid development and growth trajectory a hundred percent Foreign Direct Investment (FDI) under the automatic route scheme is authorized for B2D e commerce and marketplace-oriented e commerce structures.
> For food retailers operating businesses to receive direct investment (FDI) they can avail of a 100 percent allowance through government approval as long as the goods being marketed are made or crafted within India.
The business scene is experiencing a shift due to the increased use of smartphones and the expanding number of internet users alongside the growing affluence of consumers, within India In todays organized retail market scenario E commerce platforms have played a role and are expected to hold a 37 percent market share by 2030 as opposed to the current 25 percent.
Indias e commerce sector has a lot of promise. It benefits from a market and the growth of smaller cities and towns (Tier 2 and Tier 3) a young consumer base, with trendy tastes and growing incomes to spend online through various digital payment systems and improved delivery services from local startups nearby. Moreover the pandemic has sped up the move towards shopping in areas where popular online marketplaces like Amazon, Zomato and Myntra are integrating more with social media giants such as Facebook and Instagram. The rise of this trend has also led to an increase in the sectors such as gaming and fitness services.
The changing habits of consumers and the shifting market conditions offer chances, for firms that might have hesitated to step into Indias conventional retail sector before this.
How to sell online in India
Step-by-step guide on how to sell online in India
Discovering market niche
Firstly, you need to figure out which items you want to sell and then do some in-depth market research on them. Once you’ve checked if the costs make sense it’s important to put a catalog that lists important information, like the item code, name, description, category, price any promotions available, brand, color and other important features.
Choosing a business model
Building an own e-commerce website
Creating your e commerce platform is perfect for sellers who have something to offer customers. Yet it can be quite expensive and time consuming since gaining a foothold in the market takes time. This includes setting up a store and making sure payment transactions are secure well as setting up a reliable delivery system, among other key tasks. This approach works best for sellers who are looking at the picture and want to establish a brand identity over time.
Sell on a reputable online marketplace
Selling items on platforms like Amazon and Myntra is a straightforward and convenient method to step into the world of e commerce easily. These platforms take care of shipping logistics and payments processes for sellers so they can concentrate on perfecting their products. International vendors can seamlessly become part of these marketplaces by fulfilling some requirements like registering their business entity obtaining a tax ID number and setting up a bank account. Once enrolled the platform handles all the details related to shipping logistics and processing payments.
Promote your products via social media
Social networking sites such as Facebook and Instagram along with chat apps like WhatsApp and Twitter have gained popularity among users for their wide audience reach and interactive features. They play a role in the marketing efforts of offline stores by enhancing their visibility and connecting them with their desired customer base.
Registering the business
To set up a business you have three options;
>Sole ownership
>Private or publicly traded company
>Limited liability partnership, also known as LLP
Smaller businesses and foreign companies usually opt for a company due to its simpler and more cost effective registration process, with fewer document requirements compared to an LLP that faces stricter FDI regulations.
Logistics
A recognized market usually takes care of the transportation aspects to make things easier for businesses to operate efficiently and effectively. However, if a company decides to set up its online selling platform managing the logistics side of things can become more taxing and expensive. Nonetheless making an investment in logistics can greatly improve the reputation of the brand over time. Leading logistics companies such as FedEx and UPS are already active within India alongside players, like DTDC, Delhivery, Bluedart and DHL all of whom have established strong supply networks throughout the country. Furthermore, the advancement of logistics technology and the emergence of startups such, as Swiggy Go and Dunzo are enhancing delivery services greatly by extending their reach to the remote areas of India including Tier 2 and Tier 3 cities and towns.
Payments
Setting up an e commerce website requires incorporating a payment gateway as a step; however, it’s equally vital to provide the Cash on Delivery (COD) option to cater to the preference of consumers who still favor this payment method. Nonetheless COD can be expensive for sellers due to charges they need to bear besides courier fees. Nevertheless, with the increasing trend of digitalization digital wallets and payment platforms such as Paytm and Google Pay are gaining popularity among users.
The transition was hastened by the COVID‐19 outbreak when concerns about surface contact prompted a surge in digital payments adoption by the populace. This rapid adoption has reduced the time and resources required to overcome consumer doubts. Has led to an acceptance of online transactions, among Indias cash dependent population.
India’s e-commerce market: Size, trends, and major participants
The e commerce industry, in India has experienced expansion with players such as Amazon India and Flipkart at the forefront alongside Myntra due to an increase, in consumer activity since 2005 supported by favorable market conditions and policies. As of 2018 the market was estimated at US $50 billion. It is anticipated to reach US $200 billion by 2027.
After experiencing a temporary setback in the pandemic (except, for daily consumption items) the industry quickly bounced back on its feet again. With the COVID related restrictions easing up and more people turning to shopping during lockdowns and curfew periods e commerce has seen a surge in activity that has brought both experienced buyers into the fold. Concerns about health and safety have led city dwellers to stay from physical stores prompting a continued rise in online shopping trends.
The BCG Retailers Association of Indias report “Moving Towards the Future of Retail, in India” predicts that the Indian economy will experience a recovery driven by consumer spending growth. The retail sector is projected to achieve a worth of US $2 trillion by 2032. In this sector specifically e commerce is anticipated to reach US $130 billion by 2026, an increase, from US $45 billion recorded in 2021. Industries such, as food and grocery stores and quick service restaurants have shown recovery after the pandemic period has passed; however, areas like jewelry and fashion accessories are also showing growth potential, alongside consumer durables and footwear sectors.
The surge of online shopping after the COVID pandemic is supported by the 2021 Global Payments Report, from Worldpay FIS which forecasts an 84 percent increase e commerce market to possibly hit US $111 billion by 2024 due, to the rise of mobile shopping habits.
The scale of the e commerce market, in India is significant.
In Indias shopping scene electronics and clothing are the players, with each taking up 40 percent of the market share The clothing industry is growing steadily at a rate of 11 percent per year while online fashion is ahead with a 32 percent growth rate Leading platforms such as Myntra, Jabong, Ajio and Limeroad are paving the way, for bringing fashion to a wider audience. In the year or so known clothing and beauty names such, as H&M, Uniqlo, Zara, Marks & Spencer and MAC have increased their digital footprint within India. Particularly noteworthy is the approach taken by H&M and MAC—utilizing platforms, like Myntra and Nykaa for sales while also introducing their online stores to build their brand presence over the long run.
The online food and grocery industry is becoming more competitive as new startups such as Flipkart and BigBasket challenge established players, like Amazon and Swiggy in the market.
Consumers have a selection of items. Offers available on various platforms that aim to foster customer loyalty. Only the e grocery sector was projected to expand from US $1. 9 Billion in 201 8 to US $2. 5 Billion, by the end of this year according to research firm RedSeer and online grocer BigBasket. Leading factors propelling this growth consist of the government’s approval of direct investment (FDI) into the food retail industry.
The pandemic has changed the way family owned kirana shop owners think and behave as they are now more willing to embrace the e commerce trend that they once hesitated to join before this period of crisis hit us hard. The kirana stores are a part of Indias industry and have started collaborating with online shopping platforms to expand their customer base and presence. Flipkart has established partnerships with 27 thousand kirana stores spread across 700 cities while Amazon has also teamed up with 20 thousand stores. Reliance JioMart has also offered aid to support these shop owners in handling stock and making purchases, from its wide ranging wholesale connections.
India’s e-commerce industry’s driving forces
Indias rising market is known for its population. Experiences an increase of approximately 10 million new internet users daily each month. The expanding population and rising incomes in cities and rural areas present prospects in industry. Smartphone usage has soared from 5.4 Per 100 individuals in 2014 to 26. 2 In 2018 with internet usage growing from 560 million in 2018 to 760 million in 2020. The progress of payment methods such as BHIM/UPI and NEFT has boosted the expansion of online shopping by making transactions easier to handle for consumers. Emerging digital wallet firms, like Paytm, PhonePe and MobiKWik are also catering to the requirements of the number of people who do not have bank accounts.
Moreover, the e commerce sector has experienced growth due to postal services that guarantee smooth deliveries and improved accessibility to banking services through initiatives such as the JAM trinity (Jan Dhan Aadhaar Mobile).
Government policy support
The e commerce draft policy, by the government aims to encourage Foreign Direct Investment (FDI) for the marketplace model of online commerce, within India mandating that e commerce platforms must have a registered entity to function legally within the country.
As a part of the Digital India effort led by the government of India various initiatives, like UMANG and BHIM have been rolled out to boost digitalization. BHIM has transformed payment methods by enabling bank transactions to do away with the requirement to transfer funds to wallets first, which was previously a must with platforms, like Paytm and PhonePe. Several private companies have embraced UPI for transactions. In the year of 2021 to 2022 in Indias budget plan includes a significant amount of US $95 million specifically aimed at advancing mass digitization efforts, in the country.
The draft of the National Retail Policy encompasses enhancing business practices across sectors such as streamlining licensing procedures and promoting digitalization within the industry while emphasizing reform initiatives and establishing an inclusive platform, for online commerce integration to synchronize offline retail operations with e commerce activities.
The rules introduced under the E commerce Consumer Protection Guidelines of 2020 dictate that e commerce platforms must show the country of origin for all products listed on their websites or apps. Additionally, these guidelines call for transparency regarding product details such as images, titles, descriptions, features, ratings and reviews to improve product presentation on shopping platforms. The purpose of these regulations is to establish trustworthiness among sellers and boost consumer trust within the evolving landscape of retail.
The E commerce Landscape; In order to make sure that everyone can participate easily, from traders to producers, the Department for Promotion of Industry and Internal Trade (DPIIT) put together a steering committee back in November 2020 to manage the creation and execution of the Open Network for Digital Commerce (ONDC). This unbiased platform is set to create guidelines for organizing product listings and finding vendors and prices so that all players in the market have a level playing field – including consumers.
Indias government has invested heavily to build a fiber network for 4g technology which is anticipated to enhance the growth of commerce, within the nation.
The business strategy centered on social commerce
According to statistics provided by research findings; it is shown that retail websites that engage with social media observe an increase of 32 percent sales than those that don’t interact online with their customers via social networks like Facebook or Instagram. The rise of media as a player within the realm of digital marketing seems like a natural progression given how much time we dedicate to our mobile devices each day. What’s more fascinating is witnessing how these platforms are evolving into modern day marketplaces where commerce thrives.
Social medias extensive presence has led to the emergence of a field called social commerce that provides online business opportunities tailored for small and medium sized enterprises (SMEs). The Indian government reports that popular platforms, like WhatsApp (530 million users) YouTube (448 million users) Facebook (410 million users) Instagram (210 million users) and Twitter (17. This large audience creates chances for discovering products. Enables direct interaction between buyers and sellers.
Instagram provides a platform for businesses to post photos and videos and interact with customers through polls to stay updated on trends and customize their offerings accordingly—a resource for social commerce ventures that typically face constraints in their operations. Moreover, the growing influence of social media personalities enhances the exposure of social commerce enterprises, as a marketing tactic. According to a study conducted by Bain & Company the social commerce industry is currently valued at US $ 1500 million to US $ 2000 million with predictions indicating an increase, to US $ 20 billion over the next five years and US $ 70 billion, by the year 2030.
Many conventional online shopping websites are also adjusting to this trend by introducing programs aimed at assisting medium enterprises (SMEs) and local businesses into their platform offerings as Flipkart is a prime example of this shift, with its recent efforts. For instance, Flipkart’s 2GUD platform links brick and mortar shops, with shoppers and presents products using videos.
In addition, reselling and group buying models in the social commerce ecosystem are on the rise well. Platforms like Meeshoo and GlowRoad, Shop 101, Bulbul, and SimSim are popular among resellers who use these apps to sell products sourced by them.
These online platforms provide benefits, like having a catalog of wholesale items available for purchase and delivery services for orders placed by customers. They also offer customer support services help with integrating social media accounts and the option to create custom online stores with features, like GlowRoads complimentary sub domain offering.
Meesho is an app based in Bengaluru that offers a way for suppliers to showcase their products so that independent entrepreneurs can buy and sell them through their circles. As, per reports from YourStory about the companys claims Meesho has created a network of two million ” sellers ” with 80 percent being women, who are selling goods from over 15k suppliers over 700 small towns. Meesho’s app is accessible, in seven dialects and 40 percent of its users come from communities where English is not the primary language spoken daily. Meesho is well supported by investors such as Facebook, Sequoia Capital, Shunwei Capital, SAIF Partners, Y Combinator, others making it one of the financially backed startups, in this field.
