Rural E-Commerce: An opportunity of gigantic proportion

Indian e-commerce has been growing at breakneck speed and is likely to overtake US to claim the position of world’s second largest e-commerce market by 2034. The number of India’s online shoppers is expected to reach 220 million by the year 2025. A study of the current trends show that a major section of these shoppers will come from the rapidly developing rural areas of India.

Internet penetration in India has increased from just 4% in 2007 to 52.08% by 2019 and is expected to surge up to 45% in rural India by 2021. Factors like better availability of electricity, data at nominal costs, low-cost smart phones are further expected to boost rural e-commerce phenomenally. Rural India thus presents a huge opportunity.

With better internet access, rural people have gained exposure to latest ads, films, web series, etc. and aspire to buy the products they see on-screen. Apps like Tiktok has garnered huge base of users further increasing the scope of e-commerce. The shops in the rural areas are unable to offer high-end apparel and beauty products that are in high demand. People thus have no choice but to turn to E-commerce sites to access the products they want to buy. And India’s e-commerce industry is increasingly expanding their reach to meet this demand. Currently online retailers deliver to as many as 15,000 – 20,000 pin codes of India’s 100,000 pin codes.

Technology is the greatest barrier for e-commerce in rural India. However, human intervention in this field has yielded great results. When companies like Paytm recruited employees to help rural people navigate an app, they witnessed multifold growth in usage. The crux of the matter is that Indian rural segment has disposable income and they have the intent to buy. Barriers like language and tech support can easily be overcome by innovation. Large organizations like Flipkart and Amazon are already making provisions to cater to this growing consumer base and the smaller players are expected to follow suit.

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[box type=”shadow” align=”” class=”” width=””]Reference: IBEF.org – https://www.ibef.org/industry/ecommerce-presentation[/box]