E-commerce Companies in India Are Facing Major Logistic Challenges (Content Princess)

Players all around the world have begun to notice the rapid growth of Indian e-commerce.  India is the second most populous country in the world.  The population is around 1.2 billion.

If you’re unsure how many people that is, think of it like adding together the people of the Netherlands, Greece, Germany, the United Kingdom, Italy, Belgium, and France.  Ok, once you have added all of those populations together, you will need to multiply the number by four to get all the people of India.

Everything isn’t easy for India, however.  Here are some of the biggest challenges for Indian E-commerce.

Most of the Items Indian consumers purchase online are returned

Many first-time buyers find their way into the Indian e-commerce world. First-time buyers are unsure about what they expect online stores to provide them.  Sometimes, first-time buyers are the victims of a hard sell. However, once the product reaches them, they realise they made a mistake and wish to return the product. 

Consumer remorse is a problem all over the world.  Even though this is true, the issue is more frequent in countries like India.  This is because of the dependence on new buyers to grow. 

In the e-commerce world, returns become costly.  This is because certain challenges come along with reverse logistics.  It becomes even more complicated when you look at e-commerce across borders.

Cash on Delivery

The preferred payment method is to pay cash once the item has been delivered when dealing with e-commerce in India.  This is because of the little trust that consumers have in online transactions combined with the low penetration of credit cards. Manually collecting cash is riskier, more expensive, and involves more labour than making payments electronically.

The High Failure Rate of the Payment Gateway

When you look at the global standards for payment gateways, India has an abnormally high rate of failure.  E-commerce companies that utilise these payment gateways lose a lot of business.  This is because many of their customers will not try and pay again if the transaction fails the first time.

Low Penetration of Internet

India still has a relatively low rate of people using the internet, especially when compared to western countries.  Not only do few people use the internet, but connectivity is not of high quality in a few regions.  These problems with e-commerce are beginning to rectify, however.  One day soon, connectivity will no longer be an issue when discussing issues that electronic commerce in India faces every day.

Feature Phones Are King

Mobile phone users in India remain high.  However, it is important to note that the majority of these are not using smartphones.  They use feature phones instead.  This means that most people cannot make purchases on the go.  Thanks to the decline of entry-level smartphone prices, the scale is beginning to tip in favor of seeing this change.  It is expected in the next few years that there will be tremendous growth of people who own smartphones.

Non-Standardised Postal Codes

If you live in India and order something over the internet, there is a significant chance that you are going to receive a call from the logistics company trying to find you.  Giving your address just isn’t going to cut it because there is virtually no standardisation in how Indian postal addresses are assigned or written.  Last mile issues are a major e-commerce concert.


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