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Indiaexportnews.com

India's e-commerce stymied by poor infrastructure

  17.06.2014    

India's US$13 billion e-commerce trade is being held back by inadequate, antiquated transport infrastructure, poor rail service and congested roads, according to Shipping Gazette.
As a result retailers are resorting to the more costly option of flying out packages in passenger cabins. The cargo, however, often gets bumped off, reports Reuters.
India's largest domestic e-tailer Flipkart as well as bigger global rivals such as Amazon and eBay are widening suppliers networks or building logistics alliances to circumvent crumbling infrastructure.
They are keen to attract customers by shrinking delivery times to same-day or even as short as nine hours. For now they remain at the mercy of commercial airlines that may remove parcels to make room for passengers.
"It is unfortunate, but offloading does happen and we have to make sure our delivery promises take that into consideration," said Flipkart vice president Rahul Chari.
Experts say the e-commerce market is growing at a compound rate of 34 per cent a year, with online retail sales amounting to $1.6 billion last year.
Up to 90 per cent of goods ordered online in India are moved by air, which increases costs 50 per cent. But road and rail remain woefully underdeveloped and entangled in graft and bureaucracy.
With a population of 1.1 billion, a burgeoning middle class and better Internet access, India's e-commerce potential is huge. Online retail sales are expected to hit $76 billion by 2021, according to consultants Forrester.



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