In a remote part of south India, elderlies in my family have locked themselves in their homes, since the outbreak of the pandemic. With a hope to cheer them, I wondered if I could order something for them (from US). So I logged into Amazon India site and was surprised to see they would deliver to my village. I placed an order as a test and was pleasantly surprised to see it was delivered smoothly. And now this single order has resulted in a steady stream of orders on behalf of many family members.
The other day I was bragging to my family, how I can ship products home (in India) sitting in the USA and assuming I was probably the pioneer for utilising the e-commerce channels, at least in my village. Alas! That was not the case. To my surprise, I was told Amazon orders are delivered in our village every week.
What is driving e-commerce growth in the hinterland?
When the pandemic impact continued for a long time, most companies (especially in the IT/ITES sector) enabled 'Work From Home' for all employees. A significant portion of the employees moved to their hometowns/villages to live with their parents. This customer segment started using e-commerce deliveries and slowly started scaling up the orders.
As per a report in statista.com, the IT and BPM industry employs about 15 million employees (as of 2017) directly and indirectly. With an average of 8 per cent year-on-year growth, this number may be more than 17 million in early 2020. Even a fourth of these employees working from their homes in villages will mean about 4 million urban folks working from villages. This is an interesting case of reverse migration.
We may assume that this trend of rising e-commerce business originating from the hinterland will be steady till businesses are fully open. Even in that case, there may be a continuing trend for e-commerce orders for their family members.
What would this mean for e-commerce companies?
E-commerce companies are essentially filling in the space vacated by traditional retail, because of the restrictions placed on free movement of people. To continue to remain attractive to customers they may need to work on their delivery timelines and product assortments. India being so diverse, the needs are so varied from one region to the other. Large e-commerce folks may have to onboard more local sellers to cater to local tastes.
In addition, delivery timelines are quite critical. I noticed that some products are listed for delivery after 10 days or more. It is essential to bring down these timelines to be responsive to customer needs. Supply chains must be beefed up to cater to this rising demand from rural areas.
The reverse migration of people from cities to rural areas has set this interesting trend for e-commerce. How this would shape the retail industry in semi-urban and rural areas will be interesting to watch in the next few years.
Atmakur is a senior executive with passion for marketing and digital transformation.