OPPORTUNITIES AND CHALLENGES IN e-COMMERCE AND DIGITAL MARKETING

Indian economy has more than few reasons to celebrate its silver year of reforms driven by industry likeeCommerce. eCommerce in world’s fastest growing economy is expected to reach $38 billion (Rs. 211, 005 Crores) in 2016 and $1 Trillion (6,67,000 Crores) by 2020 well supported by declining broadband subscription charges and launch of 3G, 4G services at an affordable cost. eCommerce backed by digital marketing and social networking present unprecedented opportunity attracted tons of sellers across all regions and investors from across the globe. While eCommerce has present array of opportunities in India, it does come with handful of challenges some of them too serious to affect a major section.
Electronic commerce commonly known as eCommerce is not just about buying and selling products using internet, its an opportunity, a lifestyle, means of earningwhich touched all aspects of life and is tipped to be business model of future. The eCommerce and Digital technology have seen extra ordinary growth and transition in last few years and organizations involved are keep on innovating new means of doing business transaction like PayTm which started as mobile recharging company has grown to marketplace selling different array of products to India first payment bank and part of Bharat Bill Payment System. The impact of eCommerce in India’s lifeis such that leading eTailing companies like Amazon sold 15 million units while Flipkart earned Rs. 3,000 cr gross sales from 15.5 million units in 5 days sales event held in the first week of October 2016 promisingallied industries like logistics and supply chain, packaging etc to grow in its ambit. This trend will continue in years to come as total numbers of online shoppers are expected to increase to 220 million by year 2020.
eCommerce can play a critical role by presenting opportunity to Micro, Small and Medium Enterprise (MSMEs) which contribute to Indian economy by over 8% of GDP and employing over 22% of workforce. However the basic T3infrastructure like training on complicating factors like taxation, technology and transportation is still an issue, though worked on by companies involved and rightly supported by government through initiatives like GST, relaxing FDI norms, digital India initiative etc.
eCommerce and digital marketing industry in India is now growing at astonishing rate at expected to account for 1.61% of the global GDP by 2018.According to a report by Forrester, India is set to become the fastest growing market in the Asia-Pacific region with an expected growth rate of over 57% between 2012-2016. India retail opportunity is significant and continues to grow upwardly thanks to hyper connected young population, rising standard of living, deeper internet penetration, explosion of social media and other digital platform making growth imminent and expecting to become $100 mn plus industry by 2020.
This paper will discuss the Challenges and Opportunities and challenges in eCommerce andDigital Marketing in India.

Challenges:
Low Internet Speed and Penetration–Internet is backbone of eCommerce and Digital marketing without which the lavish internet properties created by eCommerce giants are useless. India at 2.8 mbps has the slowest internet connection speed in Asia Pacific. India occupied 115th position globally in average connection speed. This is main reason for increasing CARTABANDONMENT rate on eTailing websites as payment page that connects host website to bank or payment gatewayare built on secure connection that requires consistent internet speed in absence of which the chances of payment failure increases multiple times. Digital marketing is responsible for brand building and meeting sales target of any company fundamentally based upon high speed internet in absence of which most digital advertisement be it on Facebook or Google running through different scripts will not load on target audience devices like smartphone, tablets, personal computers etc. Opportunist Opportunity – eCommerce and digital marketing in India require infusion of huge funds be it the plateform itself like Amazon, Flipkart, Snapdeal or eBay, require substantial funds to run it operation and one with continuous inflow of capital will survive only. First 5 months of 2016 has seen over 18 shutdowns already. Digital marketing programs as Adwords are available with most eTailers provide opportunity for sellers to advertise their products by paying cost per click. This while proving beneficial for sellers that can afford are spelling doom for small sellers trying to earn their living from eCommerce. High Cost of Managing Payments – Managing remittancesrequires professional experience of accounting not available or affordable to small and micro businesses. The complex commission and payment system of eTailersmake it impossible for a commoner to reconciliation payouts against the product sold posing risk of such sellers to shun platform for more understandable ones. eTailers like Flipkart, Amazon, Snapdeal etc has complex pricing system with deductible factors like commissions, fixed costs, picking and packaging (if using fulfillment), shipping etc. A paradigm shift in thinking is required which eCommerce companies must see inclusions as opportunity rather than an obligation.
High Cost of Customer Acquisition
The focus of Indian eCommerce industry has changed from repeated consumption from loyal customers to acquiring new customers at irrational costs to show valuation for funding and investments. Companies are acquiring new customers through discounts, cashbacks and marketing spends to increase the valuation and not profitability. The whole industry has changed from increasing profitability to increasing GMV (Gross Merchandising Value). Regulatory Challenges
The biggest challenge so far for eCommerce in India is different tax structure in different parts of country that has resulted in significant business challenges. Uncertaintyof tax laws in case of eCommerce transactions coupled with delays in business clarificationsby tax authorities poses significant challenges to thee-Commerce companies.
Opportunities:

Ease of Doing Business
India’s rank for ease of doing business went up by 12 in just one year due to improved framework creating environment conducive for business. eCommerce in India has provided opportunity to everyone be it Large or Medium, Small and Micro Enterprises (MSMEs) to offer their products are services across the nation with just one click. Now a small business or individual in Andaman and Nicobar can sell its product to another person in other part of India. Unlike traditional businesses which require multiple licenses and permission, business on Internet can be start with just couple of documents.
Emergence of Omni Channels
The most important opportunity on the horizon is not growing online sales in isolation but rather helping traditional retailers or retail chain upgrade into a brand new retail model like Walmart or Staples in India to create unique customer experiences and gain customer loyalty.
Ease of Payment (Cash On Delivery) and Digital Payment
Cash on Delivery, first introduced by Flipkart as part of their strategy worked marvelously for the industry as whole. Cash on Delivery, the most popular mode of payment used in about 60% of transactions. COD on one hand helped eCommerce companies to acquire new customers, it also helped customers from Tier II and Tier III cities to connected with the eCommerce mainstream which was restricted the metros earlier. The Government of India “Jan Dhan” initiative to cover unbanked citizens has added over 110 million debit card and bank accounts connecting them with the electronic payments which will further add volume to eCommerce transaction.One of the fastest growing payment solution, currently 2% of total transaction, is catching us faster than expected providing ease of payment to consumers.
Last Mile Logistics and Fulfillment Centers
One of the most fundamental logistics challenge faced by an e-commerce companies was reaching Tier II and III towns as logistic and couriers were restricted to the Metros and Tier-1 cities but for an e-commerce company, the real business hails from Tier-2 and Tier-3 cities. Big players in Indian eCommerce integrating on their own by acquiring companies and hiring services from startups, opening fulfillment centers in different part of countries and connecting them for a proper and partnering with 3PL companies, prompt supply chain solution. Last Mile logistics and fulfillment centers is an opportunity not only for Tier 2 and Tier 3 consumers but also to the businesses who earlier in the absence of reliable logistics and courier company were restricted to their vicinity. Now they can either use the last mile services from eCommerce companies with confidence as their services include pickups, timely updates, insurance and prompt delivery or they can use the fulfillment options from these company and save the cost of storing the goods.The fast growing e-commerce sector will drive the $300-billion domestic logistics industry.
Employment
eCommerce and Digital marketing companies in India has been empowering MSMEs in India and has a favorable cascading effect on related and affiliated industries like logistics which will drive the $300 billion industry. eCommerce in India could create 20 mn jobs as pr HSBC with 70% in logistics and delivery, 30% in customer service, IT and management.
Government Initiative
Government of India has taken numerous initiatives to modernize and improve infrastructure of eCommerce an Digital marketing in India. Government proactively utilizing e-Commerce digital platforms to transform and organize traditionally offline markets such as those of agricultural produce, ets. Flagship initiatives such as Digital India, Start-up India, Innovation Fund, Skill India, etc. are contributing to the growth of e-Commerce industry eCommerce and Digital marketing in India promises to get bigger and wider in future and will be one of the major factor influencing MSMEs. eCommerce industry in India need to constantly innovate to present more opportunities and overcome challenges.