Guest Column: 2016 brought the heterogeneous shopping habits of Indian consumers to the fore: Sumit Bedi, Indiamart Intermesh

Sumit Bedi lists top 5 trends of e-commerce in 2016 that will impact us this year too

e4m by Sumit Bedi
Updated: Jan 13, 2017 8:32 AM
Guest Column: 2016 brought the heterogeneous shopping habits of Indian consumers to the fore: Sumit Bedi, Indiamart Intermesh

Sumit Bedi lists top 5 trends of e-commerce in 2016 that will impact us this year too.

In 2016, we surely witnessed several trends like surge in senior level exits, shutdowns in foodtech space, newer categories coming online, Jio's launch etc. However, my top five trends will surely impact us in 2017:

1. Mobile grew stronger but, desktop is here to stay

We saw moble traffic taking over desktop traffic for most brands in 2015 including giants like Google and Facebook. With affordable smartphones and data prices resulting in mostly mobile-only internet user base, many had expected mobile to wipeout desktop platform leading to the rise of app-only or mobile-only businesses. While low retention rates ensured app-only was a complete no-go, faster loading time and smarter caching in mobile browsers lead to a huge surge in mobile web usage. Google’s search algorithm update (Mobilegeddon) and Accelerated Mobile Pages (AMP) project too encouraged every business to think mobile-first. There is no doubt that mobile devices remain the primary point of Internet access for most individuals and account for 75 per cent of the usage but, 2016 brought the heterogeneous shopping habits of Indian consumers to the fore. Many user cases emerged, highlighting the fact that the desktop will remain a “secondary touch point” for a large percentage of digital audience. In some cases like high ticket items people still prefer a larger screen. At homes and offices, most users in metros access websites using the broadband on their desktops. Most ecommerce platforms get around two-third traffic from the tier 2 and 3 cities, that is predominantly mobile-only but, that doesn’t mean that you can ignore the remaining audience that either prefers desktop or switches across platforms.

Bottom line: 2016 proved that a multi-platform strategy is critical for businesses (unless you are Facebook or Uber, of course)!

2. Video consumption went through the roof

With every passing year, we are writing lesser and lesser. And earlier last year, when one Facebook executive said that Facebook will be all video in next five years, it made so much sense. It was already getting over 8 billion video views every day by the end of 2015 (globally) and with Facebook Live they have already taken it up a notch with people spending 3X more time watching the live videos vs others.

In India, the huge success of Hotstar that hit 100 Mn in viewership last year and also won Apple TV’s app of the year in India, lead to the advent of a number of OTT players like Voot, TVF Play, Spuul, Ditto TV, Yupp TV etc. The international players were not far behind. The year began with the arrival of Netflix in India and is ending with the launch of Amazon Prime Video. I guess if someone had doubts whether OTT would be the next big thing in India, the answer is loud and clear for them.

Bottom line: OTT players are providing consumers with multiple choices around content consumption. Marketers have a tougher job ahead with one more piece getting added to the media mix.

3. Consolidation started to change the face of Indian E-commerce

With easy money drying up and FOMO waning out, funding rounds beyond Series A were getting difficult towards the last quarter of 2015 and many felt that the e-commerce industry was poised for consolidation.  The early signs were there in 2015 when players like Commonfloor and Carwale got acquired by Quikr and CarTrade respectively. The burn rates had to go down meaning deep discounting was no more possible. Then with the announcement of the new DIPP regulations, the era of the ‘Great E-commerce Discount’ was finally over. Focus moved away from growth in GMV at any cost to KPIs like unique transacting users, Net promoter scores (NPS), repeat users etc highlighting need for building brand stickiness that barely existed earlier evident by the uninstall rates of top ecommerce apps.

Last year has seen 148 M&As so far vs 115  in 2015. While many have happened due to lack of funds resulting in smaller/poorly performing players getting attached to the larger ones, some were more strategic in nature. Some made sense as it helped the entities build more value for the end users (Ola acquiring Qarth), some happened to speed up the entry of the offline player in the online space (Tata acquiring Caratlane) while some eliminated competition for one of the players (Myntra-Jabong, MMT-Ibibo). Globally too, offline players made big acquisitions to step up their game in the online world – Unilever acquired Dollar Shaving Club for $1bn while Walmart bought for $3.3bn. Microsoft’s biggest acquisition yet – Linkedin was a surprise and it remains to be see how it turns out.

Bottom line: It’s going to be survival of the fittest with more M&As emerging in 2017.

4. FinTech is ready for take-off

With over $1bn investements in the space, fintech startups emerged in huge numbers in 2016. Though PayTM got the majority of that, investors are coming to terms that fintech is more than just payments technology and in 2016 we saw funding in a variety of sub-segments such as investing, lending, wealth management, credit reporting among others.

Moreover, the government also seems to be taking notice of this space. The National Payments Corporation of India (NPCI) launched Unified Payments Interface (UPI), earlier this year. Further, the RBI is looking to regulate the P2P lending platforms and get them to register as non-banking financial corporations (NBFCs). Government’s efforts through schemes such as Jan Dhan Yojana, Digital India and Aadhar’s Unique Identification system are creating important enabling systems for technology innovators.

And now with the demonetisation drive and focus on digital transactions there are no prizes for guessing which industry is benefiting the most right now!

Bottomline: It’s just the start. Across the world there are already 27 fintech unicorns and only one is from India. 2017 might see some more Indian names getting added to this list.

5. Regulators enter the e-commerce fray

2016 also saw increasing involvement of Government and its various regulatory authorities in the e-commerce sector. Whether it was marketplaces, e-wallets or insurance players, the influence was quite evident and dictated the economics of business models. The incumbent players had to change their strategies according to the new policies and adapt quickly.

Among all the announcements, the most talked about was the new policy by DIPP in March impacting players like Flipkart and Amazon. It clearly outlines how a pure online marketplace is supposed to act. It should function by matching demand and supply between buyers and sellers who transact on a platform. It creates value by bridging the gap in the market and succeeds by achieving scale that kicks in the ‘network effect’. The marketplace is not supposed to control the prices or distort the demand side.

While the new regulations could have come as a surprise for some players, I believe the intent has always been good. DIPP’s intent was to level the playing field between offline retail and online retail, IRDA’s effort was to bring the cost of transactions lower and in the payments space, safeguarding the user was given the utmost importance.

Bottom line: As the e-commerce industry grows further and contributes more to India’s GDP, 2017 will surely see the introduction of new guidelines and policies from the regulators.

(The author is Vice President - Marketing at Indiamart Intermesh Limited)

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of

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