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Guest Column: Digital disruption - creative enough to warrant a new generation of companies: Varun Khaitan, UrbanClap

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Guest Column: Digital disruption - creative enough to warrant a new generation of companies: Varun Khaitan, UrbanClap

As the year 2016 winds down in a few days, Varun Khaitan, Co-founder, UrbanClap shares the trends witnessed in the e-commerce business this year.

Poised to form the largest chunk of the Indian Internet Market, the e-commerce sector is anticipated to be valued at approximately USD 100 Billion by 2020. Not only has the segment enabled the contemporary MSMEs to evolve, facilitating them with services like financing, technology and training, but has downright revolutionized the retail sector in India.     

The e-commerce sector is further segregated into B2C and B2B segment, wherein, the B2B e-commerce companies are touted to be relatively more profitable with greater Gross Merchandize Value (GMV). The segment, which was approximately pegged at USD 300 Billion in 2014, is expected to touch USD 700 Billion by 2020. The factors driving profitability in the segment are lack of heavy discount, greater emphasis on quality rather than on price and higher volumes of purchases. Apart from these trends, the Indian e-commerce segment, in the year 2016, was characterized with some key trends.

While the year 2015 was a standout year for the entire e-commerce sector, in 2016 it grew further and penetrated deeper in to the lives of the masses albeit in a different form. The industry drifted slightly from being ‘e’-commerce to ‘m’-commerce, which indicates more users. While these users directly contributed to the growth of a company or the sector as a whole, they had to adjust with few changing trends themselves such as:

Dip in discounts: This year companies were seen focusing more on profitability and growth rather than wooing customers with deep discounts. Comprehending the implications of offering discounts to a massive user base, these companies focused on profitable growth.

Alteration in preferred mode of payments: With ‘Digital Economy’ being the buzz word in the country, more and more users were observed, adopting and familiarizing themselves with using payment wallets and other modes of online payments to shop and pay bill. This change in consumer behavior had a direct impact on the ‘Cash on Delivery’ (COD) mode of payment, which used to be a preferred mode of payment for most customers.

Spurt in transactions: Google India’s Managing Director Rajan Anandan had predicted in the beginning of this year, "There were 50 million transacting users in 2015. This year, it will be at least 75 million." Adding to the insight, he also said that smartphones will drive maximum traffic.

Emergence of newer categories: With the influx of users online, while the companies had their hands full, more and more services emerged to counterstrike various customer-needs and pain points. For example, services like grocery delivery, on demand services like plumbing; salon services etc. were seen ushering in a new era of ‘e’-commerce or ‘m’-commerce to be specific. Services such as these mitigated the need to step out of the house at all.

More focus on rural areas: This year the e-commerce companies were seen panning their focus towards the rural areas. Galvanizing the rural region to go online for their various needs, the e-commerce sector was not only seen selling in these areas, but engaging farmers and local business owners to scale their businesses as well. Adding to it, the traditional biggies of Indian business ecosystem such as Tata Group and Reliance Industries were also seen aggressively entering the e-commerce segment.

Synergy between online and offline: Despite all the brouhaha smothering the conventional retail segment, the brick-and-mortar will not disappear. Making allowance for such actualities, the year 2016 witnessed a synergy between online and offline services. Many offline retail chains and stores were seen associating with online stores and vice-versa to offer and serve their customers better, giving them the best of both worlds.    

However, amidst these drifts and trends in the segment, the one trend that established itself as a niche category, is the on-demand segment. Currently buzzing the Indian economy, on-demand services in India has existed for years now. The segment owes its genesis to the Mumbai Dabbawallas who have been delivering lunches from customers’ home to their offices every day. There services have been legendary enough to become a topic of study for HBR case study, according to which around 5,000 Dabbawallas deliver meals with 99.9999% accuracy.

However, in this digital era, the digital disruption has been creative enough to warrant an entire new generation of companies. Leveraging the might of technology, on-demand services as a sector, has not only managed to garner interests from the masses, but has also shown immense potential, in terms catering to diverse client requirements and scaling the business. Be it dispatching somebody to repair faulty appliances, getting a maid, plumbers or fitness trainers; there are startups doing their bit to organize the highly fragmented sector and offering a plethora of services at the click of a button.

While rapid urbanization has led to an increase in the income, it has accentuated various other problems. Today, people are constantly busy and are willing shed extra bucks to ensure a certain level of service and this is what the on-demand sector is going to thrive on and continue growing.

(The author is Co-founder, UrbanClap)

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


Tags Varun Khaitan Co-founder UrbanClap

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