What to Expect in 2018 from ecommerce Sector?
As Amazon and Alibaba (yes, though Paytm) gear up for a showdown in India, 2018 would prove to be an year prior to the showdown.
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The ecommerce industry is growing day by day as people prefer buying things online. This saves time and money as everything is available at anytime amd anywhere. There are many trends coming up in the retail and ecommerce industry, some of which have proved beneficial while some failed drastically. The ecommerce sector is expected to further increase in 2018 and in the coming years as it has become smarter, faster and digitalised due to artificial intelligence technologies like virtual shopping experiences. Such technologies will continue to trend in 2018 in an advanced form and will shape the digital landscape in every aspect like sensors to augmented reality where customers and brands can interact with each other.
So, here are some of the anticipated retail trends that are expect in 2018.
The bad news first:
1) Consolidations, M&As due to high revenues
2017 was a tough year for the ecommerce industry investments and most VCs have been treading quite cautiously in this sector. To say that the funding was hard to come by is a gross understatement. 2018 will prove to be an year of mergers and consolidations as most VCs and Angel investors try to find the profits in their investments. A lot of smaller me-too players will either be bought off by the stronger players or will be merged and sold off as larger combined entities. The investments most likely won't yield significant long term ROI.
2017 saw a preview of what 2018 holds in shutdowns. Players like ABOF shutdown even with considerable funding due to a general feeling in the investment circles that Indian Ecommerce industry cannot turn long term profits due to high expenses, low margins and generally indisciplined logistics.
3) Layoffs and Paycuts:
Due to high cost of operations for most ecommerce players (ecommerce being anything that has anything to do with electronic online transactions), many smaller players will see downsizing exercise and immense pressure from investors to turn profitable.
Now, the good news:
1) Many small Ecom companies have seen the peril in high cost of operations and hence, have started leveraging technology to find the efficiency, and profits. These companies will survive since they are being run as real businesses; and most don't aren't looking for quick buck by selling off and exiting. 2016-17 has given rise to many homegrown companies that are solving real problems with Ecom - and these will survive due to the value addition. Hyperlocal logistics companies are a prime example of such businesses.
2) Reality Strikes: overall 2018 will prove to be an year of reality as most companies wake up from a decade old slumber to find themselves in deep financial trouble. But, the good news is, as these companies try and develop efficiencies, the overall industrial outlook will become more realistic. Gone are the days of lavish spending and discounting in the name of customer acquisition.
3)Good news for the engineers and scientists:
With the ecom companies looking to hire more efficient talent - 2018 will prove a gold mine for engineers and scientists that want to work on real world problems and latest technologies. Don't expect to get paid a bomb, though.
4) most lucrative sectors would be agro-ecommerce and B2B (wholesale) ecommerce. Larger ticket size and lower number of transactions would mean a better ROI and efficiencies.
5) Customer wins:: As Amazon and Alibaba (yes, though Paytm) gear up for a showdown in India, 2018 would prove to be an year prior to the showdown. The customer will always will this price war as both these companies (also Flipkart) will be looking to woo the customer for repeat purchases.
It's going to be a very interesting year ahead!
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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