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Growth of Ecommerce in Rural India

Update On :10-August-2016

Growth of Ecommerce in Rural India

Earlier it was thought that eCommerce companies have no reach to the villages of the India. However, in the recent past there have been certain developments in the country, which have connected even the villages to the latest technological trends.

The postal service is one system that has the power to connect the whole of the country. It has reached to almost all the villages, even those in the remote locations. The past two years have witnessed dramatic growth for the Indian postal service. The reason is that the department which had been in losses since many years has now collaborated with more than 400 eCommerce websites that also includes big ones like Amazon and Flipkart for goods delivery.

There are around 1,55,000 post offices in India and they are now connected to deliver the goods to customers in otherwise remote areas.

There are many eCommerce companies which have reached the villages of the country. They have supported the country in becoming digital through their strong logistics channel. In some locations, these companies use their own delivery services, however, at most of the places third party delivery is used which includes postal service as well. We analysed the services of various eCommerce companies to know whether they have access to the Indian villages or not. We randomly checked 100 villages’ pin codes for a specific product from the biggest players of the eCommerce in the country which are Flipkart, Snapdeal and Amazon. The villages were taken to be from Haryana region. 

These are the biggest online retail stores of the country and they have increased their revenue many times with the coverage of cities, towns and now the villages. Other online stores such as Myntra, Jabong and Voonik have also started their deliveries in many villages and towns of the country. However, some of the eCommerce websites have not yet covered the villages. They are still in the process of giving their coverage in the major cities. With the availability of online delivery, the villagers have started gaining benefits from these companies. With more penetration of internet, more people are now able to order their goods online. In addition to the above players, Shopclues cater to 8000 pin codes across small towns and villages. The companies have noticed that there has been high demand of goods such as electronics and utensils from the villages.

The rural area is a fascinating sector for all the eCommerce companies owing to the factor that return rate is almost zero in these locations. The customer is highly need based and they do not order things which are of little use. Thus, companies save hefty amounts of money in logistics charges spend on taking back the delivered goods.

There are some of the eCommerce companies that are targeted only to the rural markets, such as Ipay, Inthree – Boon Box, Storeking, MVikarsha, eDabba and the likes. These companies have made certain innovations to their designs and working keeping in view the limitations with the internet connectivity of the rural areas of the country.

The majority of rural buys are from the categories of electronic appliances, stoves, wet grinders and baby products. This population mainly buys need based products. Their buying capacity is no less than the urban population however, there is always a factor of lack of trust among the rural population. This is the reason they mainly opt for cash on delivery option.

There is a huge opportunity in this segment. More than 65% of our population still lives in villages and 138 million of them are well versed with the usage of smartphones and computers. Internet penetration is certainly on a rise. It is expected that within next two years all the villages will be connected to the eCommerce. It can be said that Indian eCommerce still has a long journey to go.

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