New Delhi, July 12 2021: The online commerce industry is projected to hit $188 billion in 2025 from $64 billion in 2020 suggests a report by FICCI report: ‘A Progressive Shift from Transactions to Trust.”
The past few years have seen a marked shift in India’s retail growth story, as purchasing behaviours have progressed from primarily physical to “phygital” buying.
This has been a dual consequence of widespread internet penetration via Government efforts, smartphone penetration and cheaper, faster data availability driving mobile commerce, and on the other hand socio economic factors like a fast growing middle class community. Finally, the success of online commerce can be attributed to a key driver of online purchasing across populations - rising customer trust in online buying channels.
Nearly 75% of consumers surveyed indicate that their trust in online marketplaces gives them the confidence to make purchases online. Payment security is the number one trust parameter for online purchasing, followed by return/refund guarantees and clarity of information available. Now, with the advent of the COVID-19 pandemic, a new trust parameter has arisen – that of physical safety beyond the online marketplace supply chain. Customer centric online marketplace initiatives, in response to the pandemic and otherwise, along with government policies, are giving the Indian consumers a sense of security in the online ecosystem.
The government is attempting to bring in dynamic changes in the retail industry to protect the digital consumer. Online marketplaces are investing in technologies to putin place safety processes and practices, paying attention to customer concerns, and empowering brands and genuine sellers to protect their rights and grow their businesses online. Measures include seller verification checks, trust seals, better customer service, social proof enablement, brand IP protection, cybersecurity, and AI/ML tools, among others.
According to a survey, 68% more customers shop online now than pre-Covid 19 times. This surge is mainly due to an influx of first-time online commerce users. The onlinecommercesector grew 117% between February and June 2020,during the lockdown months. Online marketplaces invested in a host of new safety and hygiene practices to keep customers and employees safe, while extending a lifeline to brick and mortar kirana stores to help them transit to the world of online selling. The evolution of buyer and seller behaviour toward digital during the pandemic is likely to stay and strengthen the three tenets of trust - Widespread Awareness, Enhanced Security and Active Responsibility. Online commerce is expected to contribute nearly 4% of India’s GDP by 2025, and is expected to add another1 million jobs by 2023. The industry has boosted manufacturing, transport, sales and other related activities. Online marketplaces have empowered rural sellers, MSMEs, women, and entrepreneurs to develop their businesses and generate livelihoods. Creating an ecosystem of trust requires collaborative interventions between the government and online marketplaces. This is also required to strengthen the 3 key tenets of trust - widespread awareness, active responsibility, and enhanced security. 70% of consumers surveyed indicated that if more safety interventions are implemented, they would shop via online marketplaces more often. Along with greater customer and seller awareness, a new holistic policy framework can harness the true potential of online commerce.
Customer Trust Summit
Addressing the inaugural session on Building Customer Trust in a Pandemic Era at the Customer Trust Summit 2021 organized by FICCI, Leena Nandan, Secretary (CA), Ministry of Consumer Affairs, Food & Public Distribution said that there is some consumption of product or service that we are availing of consciously or unconsciously. As customers, we expect nothing but the right standards, the quality and value for money. Trust is a key aspect when it comes to transactions.
“There is a need for a continuous dialogue with the industry players and BIS and to understand what it is that they are doing in the area of creating a quality ecosystem. We are trying to educate consumers about the standards and value of ISI mark and industry collaboration and participation is the key to reach out to safeguard the interest of consumers,” she said.
Speaking on the role of government to protect the interest and changing nature of the transaction in the country, she said, “Our goal is to continue to focus on a consumer- centric approach to developing innovative newer products and solutions.” Government, Ms Nandan noted, will fail in its task if it is unable to make an ecosystem of competition so that the right value of goods and services can be offered to the consumers. “We are in the need of a competitive atmosphere and right competition for consumers to be able to take care of their concerns and interests.
The Consumer Protection Act, she further said, has opened up avenues for consumers in such a way that it is of benefit to the industries as well. “Our ultimate objective is that the consumer must be able to exercise their choice and that is when the country will be able to grow, as consumption is key for the vibrant economy to be in place,” said Ms Nandan. “If we keep our end of the bargain, satisfy the consumer needs, and adhere to genuine grievances and respond within time, we will retain the trust of the consumers, said the secretary.
Jamshed Daboo, Co-Chair, FICCI Retail and Internal Trade Committee and Independent Advisor - Consumer, Retail, Hospitality and Ex - Managing Director Trent Hypermarkets Pvt Ltd said that the vector of moving from transaction to trust is an all-important and an all-consuming task that both private sectors, as well as the government, need to undertake on a war footing.
Raghava Rao, Co-Chair, FICCI E-commerce Committee and Vice President Finance & India CFO, Amazon India said, “A customer-first approach in this accelerated digital era is imperative for both online and offline commerce. Customer Trust includes multiple parameters; with customer priorities changing rapidly, it is vital to track customer needs and satisfaction metrics more closely and strengthen the customer experience. The Government has already taken a series of steps to empower consumers through awareness and education. The Ministry of Consumer Affairs, Food and Public Distribution has been at the forefront of undertakings aiming to promote and protect the welfare of consumers and strengthen the consumer movement in India.”