Search for

India’s digital economy: 8 changes you shouldn’t miss

Here is a look at how various internet companies are faring in various sectors of the economy. Be it transport, food or clothes find out what works what does not. 

 

This cool button delivers CIO stories to you on Facebook:

How Digital economy is fairing in 2017?

How Digital economy is fairing in 2017?

After spending initial years on customer acquisition, internet technology companies are now focusing on profitability. E-commerce portals have reduced discounts, cab aggregators have reduced incentives, food tech has expanded base and charge for deliveries. 

E-commerce’s focus on profits

E-commerce’s focus on profits

Research firm Hurun says the e-comm companies have shifted their focus from sales to profits by ceasing subsidised unprofitable sales and concentrated on limiting their losses. In terms of adoption of the portals, only 1/5th of the total population of India, shop online. 

E-comm deliveries take longer

E-comm deliveries take longer

RedSeer Consulting says that the volume of orders has increased approximately 10 to 12 percent in the last four months making deliveries slower. The spike in the orders can be attributed to the festive season sales. This has lead the average time of deliveries increase. 

Fashion e-tailing

Fashion e-tailing

It is predicted that the high margin category of fashion is expected to make a total consumer base of 100 million this year, according to ASSOCHAM. As of March 2017, fashion accounted for USD 7 to 9 billion in the online commerce space, according to a study by Boston Consulting Group and Facebook. 

Higher discounts, lesser margins

Higher discounts, lesser margins

The fashion e-tailing industry has seen various new entrants into the space, creating greater competition. In an attempt to attract customers and create a portal loyalty, there has been higher discounting by players. RedSeer says while the volume of orders increase, the increased discounts, supply chain cost and lead to lower margins.

 

 

Online cab aggregators

Online cab aggregators

In 2017, cab aggregators had to face major backlash from drivers. The year saw several strikes as incentives and total earning of the driver partners fell. However, Uber hit the mark of 500 million rides in India along with revenue growth of 2.5x as of June this year. Ola on the other hand has around 6 million rides per day spread across 102 cities in the country. 

 

Driver partners quit, lesser cabs

Driver partners quit, lesser cabs

Due to the steep cut in incentives and driver partners earnings, several drivers quit the cab aggregators. Driver associations in states like Delhi, Mumbai and Bangalore have started or plan to start their own platform. Reduced number of driver partners has led to non-availability of cabs during peak hours. RedSeer says that the customer satisfaction index and booking experience for the current quarter has declined drastically.  

Food tech reduces losses with more adoption

Food tech reduces losses with more adoption

During a dull period in 2015 and 2016, several food tech companies shut shop. Seems like slowly, with logistics worked out, food tech has found more adoption among users. Companies such as Zomato have turned profitable this year.

 

 

Order volume decrease while users increase

Order volume decrease while users increase

Interestingly, while the order volume has decreased the number of users using the online food ordering platforms has increased. Also, in terms of funding, Swiggy raised USD 80 million, while FoodPanda got acquired by Delivery Hero. Swiggy clogs one million orders a day while Zomato has over 2 million orders each day according to the companies’ last quarter filings