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E-commerce in Rural India: The Untapped Market


Photo by NASA on Unsplash

The Internet is certainly the most significant invention of all time. Rightly said by Stephen Hawking — ‘We are all now connected by the internet like neurons in a giant brain.’

It has proved to be beneficial for almost all industries and led to major changes between businesses and customers.

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Since 1990, E-commerce industries have started to come up. It was surely a revolution as those companies have made a big name now.

Now the question arises, what exactly is E-commerce? E-commerce or electronic commerce refers to all the business transactions which are conducted via the internet. Its easy accessibility, 24 × 7 availability, fewer costs in comparison to physical markets, and so on are some features that have led to the immense growth of e-commerce entrepreneurs.

The Internet plays its role by facilitating communication between businesses and customers. Verghese Kurien once stated — ‘India’s place in the sun would come from the partnership between the wisdom of its rural people and skill of its professionals’. This statement is true as rural India is full of potential, talent, and infinite capabilities of taking the E-commerce sector to a whole different level! More than 70% of India’s population lives in rural areas. The main source of income in these areas is agriculture, crops, and handicrafts work done in villages. As per reports, in 2018 the Agriculture sector employed more than 50% of the Indian workforce and contributed 17–18% to the country’s GDP. Thus, it is very clear that there is an urgent need to accelerate the expansion of commercial enterprises and e-commerce businesses in rural areas.

Even though the contribution of rural India is high in the country’s economic development, their role in the E-commerce sector is not much as of now but things are slowly taking a leap and as it is rightly said — ‘growth is a gradual process’.

As per IAMAI, India stands at second rank in terms of the number of internet users at 451 million active users of the web. This number includes urban as well as rural areas. The government initiatives concerning the picture of digital villages where maximum people can enjoy internet facilities have led to a substantial rise in the number of internet users.

With modernization and globalization, increased use of technology, government initiatives, the people in rural areas have become increasingly interested in the E-commerce industry to be a buyer, as well as to collaborate with sellers to sell their products and earn.

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The E-commerce industry surely requires striking a balance between both sections of the population. So, it is important to understand the various concerns and challenges in rural India’s E-commerce sector to bridge the gap between them.

Due to a lack of knowledge, the rural population is concerned about making online payments and the risks associated with it. Customers may be apprehensive because of the lack of on-ground presence in their area and limited reach. The transport infrastructure is also important as this will create a deep impact on supply chain efficiencies.

The language also stands to be an important barrier as most of the E-commerce websites are available in English, thus the firms will need to consider e-commerce development with vernacular languages to speak with the audience in their local language.

But the bright side is that it is pretty clear that the rural sector is eager to enter into the E-commerce world and understand it.

In the rural regions of India, more than 18% of the population is using mobile phones. By 2021, this 15% figure will touch the figure of 45%. Let us not forget to know about the various sectors where the E-commerce industry is booming and has a large scope in the future too.

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Talking about the HOUSEHOLD SECTOR industry first, E-commerce giant Amazon is piloting mass distribution in the rural market for benefitting the small-town customers. The data shows that Amazon had covered about 90% of villages for delivery. The return process in rural areas or villages is a smaller amount compared to urban areas, therefore the logistic cost for e-commerce companies is a smaller amount for a country than in urban areas which is sure, a plus point.

Next comes the HANDICRAFTS INDUSTRY.

Rural India is full of talented people, especially women. They produce various types of handicrafts by utilizing agro-based materials and giving way to a source of income for them. Nowadays, these handicraft items and products have also started to be available on online platforms and creating a mass customer base for the people living in rural regions and people from marginalized communities. The penetration is not high, but it seems to increase in the years to come. The bright ray of hope comes from some E-commerce companies like Indian Roots, Craftsvilla, CraftedIndia, and Engrave who are even willing to pay higher prices and develop the rural sector.

Next comes the AGRO BASED PRODUCTS, the seeds of various types of crops, fertilizers, along with various other products are available online and have simplified the things for people living in rural regions and farmers in India. Also, people have started becoming aware and inclined towards homegrown and natural products, which has increased scope for the rural sector. Indian Roots, Craftsvilla, CraftedIndia, and Engrave are even willing to pay higher prices and develop the rural sector. Next comes the AGRO BASED PRODUCTS, the seeds of various types of crops, fertilizers, along with various other products are available online and have simplified the things for people living in rural regions and farmers in India. Also, people have started becoming aware and inclined towards homegrown and natural products, which has increased scope for the rural sector. Indian postal services have the facility to determine connections throughout the planet. Its evolution and growth are a blissful journey. It has made its appearance felt within the remotest locations of India.

More than 1, 55,000 post offices in remote areas are connected to present the products to the purchasers, regardless of the far-flung places. It’s a welcoming plot where e-commerce industries are committed to assisting our country to become digital by the logistics channel; within the last two years, Indian postal services have collaborated with around 400 e-commerce websites. This is surely a win-win situation! This article surely requires special mention of 1 amazing Start-Up that’s making E-commerce easy for rural areas.

Boonbox is India’s first E-commerce platform for rural areas that takes orders from customers in 16 states and has the setup to deliver in 47% of India’s villages, which is 300000 villages! Boonbox features a plus because it employs the locals — folks that they personally know and trust to facilitate the e-commerce retail. It is clearly solving all the challenges which are present between the E-commerce world and rural India. The beginning-up features a local team, local language-based apps available in various local languages, and a customer service team speaking the languages of 16 states to form the buying process seamless for the agricultural customer. Their business is all about ‘co-creation’. Just like Uber has brought a revolution within the urban world, Boonbox too is just like the ubers of the agricultural world. It currently has quite 200 brands in association and is growing day by day. As the E-commerce sector is flourishing day by day, it is spreading its wings even within the cars and mobility sector, it’s the necessity of the hour to require the agricultural sector in inclusion.

Photo by Glen Carrie on Unsplash

While the recent lockdown within the country has led to the general decline in consumer spending, it’s been partially offset by an increase in online spending, as consumers occupy the home and use online channels to get goods. Also, in many parts of the country, farmers are buying fertilizers, seeds, and other agricultural inputs online.

The government’s flagship Digital India scheme has connected more villages across the country to the digital highway and has increased the penetration of e-commerce to manifolds. A facilitation plan envisaged by the govt that has fixing of producer companies in clusters to market e-commerce platforms, including the govt e-Marketplace (GeM).

Some handicrafts and handloom products, like Madhubani paintings from Bihar, tribal paintings from Jharkhand, terracotta items from Rajasthan, and tussar silk wear from Bhagalpur, made by rural artisans, mainly women entrepreneurs, are already being sold online via Amazon and Flipkart.

The products identified by the govt. could include stationery items like folders, pen holders, and gift items, according to those within the know. Coming on to the e-commerce platform will help artisans get larger volumes and better prices for his or her products even after parting with a minimum of 40% (of revenue) to those sites as seller charges.

At present, rural artisans sell their products through central and state exhibitions organized by the ministry or directly through traders, besides catering to local demand restricted to their districts. This is expected to drive a subsequent wave of expansion within the Indian e-commerce sector! Certainly, Tapping the agricultural sector is like tapping 70% of India!


Contributed By- Vanshika Madan, Content Writer at Mitti Ke Rang

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