The growth of eCommerce in India is gaining the attention of many global market players. India is the second-most populous nation in the world with over 1.2 billion people. The eCommerce industry in India is growing rapidly because of the increased usage of the internet and advanced devices. However, the growth rate of eCommerce in India is lower than other developed countries. If you’re planning to invest in eCommerce website development services, then there are several challenges in eCommerce in India that you need to consider. In this article, you will learn about the biggest challenges faced by the eCommerce industry in India.

Major Problems Faced by the E-commerce Industry in India

• Lack of Knowledge and Awareness
  

Majority of the Indian rural population do not know about the internet and its uses. Also, the majority of the urban population is lacking knowledge of online businesses and their functionalities. Only a few of them know about online fraud and corruption. Surveys reveal that 50% of Indian online users do know about the solution of internet security.

• Online Transactions
  

Many Indian customers do not have plastic money, credit or debit card, and a net baking system, which is one of the main reasons for the slow growth rate of eCommerce. However, some of the nationalized banks are now issuing debit cards to all their account holders. This is a positive sign for Indian entrepreneurs who have invested in eCommerce website development services.

• Cash On Delivery
  

Cash on Delivery (COD) is the most common payment method in India due to less penetration of credit cards in India. About 30%-50% of customers prefer this mode of payment when purchasing products or services online. COD addresses the payment security issues of online transactions. However, this payment method is proving to be very expensive and a loss to the companies. The majority of the customers refused to make the payment at the time of product delivery. As a result, companies lose the sale as well as the product transit fees.

• Online Security
  

Startups and small businesses often ignore the importance of authentic and reliable software because of budget limitations. They are also failing to implement necessary steps to ensure the security and protection of their online business through the installation of protection services like antivirus and firewall protection. In India, many businesses use unauthorized software in their server which makes them vulnerable to malware, virus, and Trojan attacks. This makes it highly risky to make online transactions in the system and may disclose sensitive details of credit cards and online banking details of the users. Therefore, those investing in eCommerce development services must use SSL certification to make their online stores secure.

It is also wise to use eCommerce testing solutions to make sure everything is up-to-date and secure.

• Logistics and Shipment Services
  

Indian logistics and courier services need a lot of improvement. A reliable and strong logistics service is one of the major reasons behind the success of online businesses. However, India is lagging behind in this field as most of the cities and small villages are yet not covered under the serviceable area of many courier and logistics agencies.

• Tax Structure of India
  

The tax rate system of the Indian market is another challenge faced by the eCommerce industry in India. In developed countries like the USA and UK, the tax rate is uniform for all sectors whereas the tax structure of India varies from sector to sector. This factor creates accounting problems for Indian eCommerce businesses.

• Fear of Making Online Payment
  

Fear of making online payments is one of the biggest factors that are responsible for the lower growth rate of the eCommerce industry in India. The majority of customers are still unaware of online payments and their security. Hence, they are often reluctant to share their credit card or bank details and prefer not to shop from online stores.

As an eCommerce business owner, you should consider using eCommerce testing solutions to keep your eCommerce store and online transactions secure.

• Touch and Feel Factor
  

Indian customers prefer to buy products at physical stores as they get to touch, feel and try the products directly. Therefore, customers in India prefer to do ticketing and booking online in Travel sectors, electronics, and books. Companies selling products like apparel, jewelry, handicrafts, etc. are struggling to sell their products online as the customers want to touch and feel the product before buying it.

Wrapping Up

So, these are some of the eCommerce challenges in India. However, it’s a fact that many eCommerce giants are attracted to India. Global eCommerce in India is growing at a rapid pace and many large international enterprises are also making a considerable investment in launching a shop in India.

This has increased the demand for eCommerce development services in India. If you’re planning to build an online store, then you should make sure that you’re prepared for all the major challenges in eCommerce and build a powerful online store.