The Indian E-commerce Industry 

E-commerce is one of the fastest-growing industries in the world. In 2019, global e-commerce sales amounted to 9.09 trillion USD, and this number is forecasted to nearly double by 2024. According to the India Brand Equity Foundation, the Indian E-commerce industry alone is worth over 64 Billion USD in 2020 and is projected to be over 200 Billion USD by 2026. Increased penetration of the internet and smartphones has been a key driver of the growth of the industry. In September 2020, India had 776.45 million internet connections due to the Digital India initiative. Sixty-one percent of all internet connections were in urban areas, 97% of which were wireless.

Thanks to e-commerce giants like Amazon and Flipkart consumers have got used to the convenience of online shopping. You can get any product delivered in days, sometimes even minutes, with just a click or a tap. With the growth of trust towards online retailers and digital transactions, it’s becoming harder and harder to find someone who has never purchased anything online.

Online shopping, which has grown rapidly in its popularity, is good news for entrepreneurs with product ideas. But it’s not just this rapid growth that makes e-commerce a top industry for startups in 2020. Another major advantage is that setting up an e-commerce store requires relatively little initial investment. All you need is a website and a good strategy to cheaply manufacture or dropship your products.

Global e-commerce is a competitive market, there is no question about that. Rather than trying to catch up with the big players, find a niche to specialize in. If you nail the product-market fit, you’ll be on the right track to building an e-commerce empire.

Despite Flipkart and Amazon controlling over 75% of the market share, there are many e-commerce companies who are vertical players. You can find a lot of E-commerce businesses with a niche ranging from startups providing Kashmir made clothing to Indian handicraft products.
Is it a good idea to go Niche?

At a time when e-commerce giants are offering everything from a needle to huge machines in one place, is it a good idea to start a platform that serves a specific segment? The given statement is in fact true but given India’s population and demographic, even a niche e-commerce store can someday reach a scale they find rewarding.

The shopping experience needs to be more tailored and more personalized for each individual, so customized products are needed. Niche ecommerce players are specialized and focus on showcasing the products more effectively. There will be some players who won’t survive, but niche players are taking over where the big players can’t. The E-commerce industry is huge and it needs to be more personalized, therefore, a one size fits all approach by the incumbents won’t necessarily be the winning strategy in the long run.

And it is not that there is no competition in this segment. A lot of players are already providing massive discounts but as usual, it’s the customer loyalty and the shopping experience that would drive and retain customers.

If you bring something new to the table and then somehow manage to keep with that level of innovation, then you don’t need discounts to keep the engine running, they can be used more tactically in such scenarios. Customers are not averse to shelling out money for quality and novelty. If you can differentiate yourself from the rest of the pack, customers are more likely to remain loyal. To strike a chord with the customers, you need to emphasize the choices you are offering.