Role of E-commerce in the new era of Rural India
Introduction
India is the most diverse country in all over the world and around 70% of the population of India lives in rural areas. In rural areas the main earning source of people is the agro-based products and the regular crops they are producing. The agro based sector has shown huge growth since independence, it contributes half of the total economy of the country and most of the people generate their livelihood from this sector. However, India is yet to see the sun of development in agribusiness and agriculture sector because most of the people living in rural areas have marginal land on that they don’t know modern methods of farming and does not have adequate facilities to utilize its land in full potential. To develop through agro based economy exploring agricultural potential is a key for economic growth, agribusiness expansion, which is the dominant source of recent growth, should be seen as a main engine of further development.
Mobile Penetration In Rural India
In rural India around 18% of population people are mobile user and it was seen that around 15 % growth in the number of users last year and mostly people were below 25 years. It is reported this percentage will increase upto 45% by 2021. This penetration trends shows that in rural areas also reflect an increase in the range of buyers also. This upward trends will make the retailers to make their products online presence so as to make their business more prosperous.The increase in mobile users in rural India also shown an aspirational shift in the lifestyle of the people and makes the easy availability of online services.
E-commerce in Rural India
Online shopping has become a habitual practice in India as on a daily basis people are purchasing different commodities and availing different services from online source. This habitual practice is not limited to urban areas but now in rural areas also this practice is carried out with full fledge as due to high penetration of mobile and internet users in rural parts of India. The Government of India is also focusing on digital India on a high scale by connecting every village and small towns with optical fiber so that every citizen in rural India can also avail the benefits of online services.
The e-commerce has shown great growth in the sale in the past few years as it was noted that in 2018 the total sale through e-commerce is about 38.4 USD so as per this data it is quite sure that every retailer must get their product online presence so as to make their business more prosperous. The below visualization shows the percentage of village covered by some of the e-commerce giants companies in India.
Nowadays the major e-commerce companies like amazon, flipkart have their delivery in small villages which has taken an aspirational shift in the lifestyle of the people of rural India as they also get the availability of all brands at their place only with minimum effort.
Effect of E-commerce in different sectors of rural India
The e-commerce had very effective role in different sectors of the rural India and it leads to the aspirational shift in the lifestyle of the people also. The different sectors in which the e-commerce are prevailing in high scale are as follows:
Agro-based Products: The agricultural products are now getting online presence and making a great difference in the style of rural business.Nowadays we can seeds of different crops, fertilizers and different other products are now available online and make an easier way for farmers and rural people.
Handicrafts: We had seen that in rural India there is new source income is the handicrafts. Many people, especially women are making different types of handicrafts from different agro-based materials and creating a source of income for them. Now these handicrafts materials are also getting available online and creating a huge customer base for the rural people. The penetration is not high but yes this will increase in upcoming years.
Household Products: The people of rural India now getting every household products on their place which leads to an aspirational shift in the lifestyle of the people. The data shows that Amazon had covered about 90% of villages for delivery. The return process in the villages are less in comparison to urban areas so the logistic cost for the e-commerce companies is less for rural area in comparison to urban areas.
Scope of E-commerce in rural India
In the past few years we had seen their is tremendous growth in the digital India program through which every village is connected through optical fiber leading to presence of internet in every village. Due to the presence of internet the rural people are availing every online services on their place which changed their lifestyle and also created an opportunity of employment for them. Presence of internet created a great scope of e-commerce in rural area as the people are getting all their household products at their place and retailer can also have an online presence of their product which create a huge customer base for them. There are certain areas of rural in which the e-commerce had a great scope that are as follows:
Availability household products: Due to the presence of internet in rural areas the people are getting every product at their place which create the great scope for the people to change their lifestyle and also for the companies related to e-commerce to create a huge customer by supporting rural people needs.
New opportunity: E-commerce in rural areas create a new opportunity for retailers and small scale industries like handicrafts to get their product online and make their business more prosperous. The online presence of product support the retailers in creating the demand for their product and create a customer base. E-commerce basically give a new area of hope for the people who want to create a new business and get the online presence for their product.
An area of social reform: The e-commerce had created a social reform in society, especially in the rural areas. The internet users in rural areas are mostly below the age of 25 so in the youth their is new scope of getting better products as per their need which changes their lifestyle and also create a hope for their grooming and creating new opportunity.
Challenges in rural India for E-commerce
There are certain challenges for the e-commerce companies are as follows:
Availability of internet : Right now only 18% of the rural population have access to internet which is really a great challenge for the e-commerce business. This percentage will increase in upcoming years but right now this is a major challenge for the business.
Lack of awareness: In rural areas, many people don’t know about the online purchase which also make a challenge for the business. So there must be a method for the awareness for the purchase of online products.
Trust factor: Generally people of rural areas doesn’t trust on the online product due to chances of damage, trouble of return and many other issues so the companies must create a trust base before proceeding to a rural areas.
Payment methods: Cash on delivery method doesn’t available to every village so for that we have to create awareness of online transaction as this will also have a trust issues regarding making money transactions online.
Conclusion
Beside having challenges for the e-commerce companies in rural areas there is a still a great area for the business of e-commerce as we had seen in the past few years there is tremendous growth in online sales. In villages of India, there are many small scale and medium scale industries related to agro-based products and these industries are now creating online base so that they can sell their products online and can gain maximum profit. The e-commerce had played a very vital role in changing the lifestyle of the people of rural India to a great extent.
