Home / Companies / Start-ups /  Amazon, Snapdeal look to tap NDA’s rural India digital drive

New Delhi: E-commerce firms such as Amazon and Snapdeal are firming up a strategy to leverage the opportunities offered by the National Democratic Alliance (NDA) government’s efforts to connect 250,000 villages in India by 2019. This includes initiatives such as forays in regional languages and assisted shopping on e-commerce platforms through rural kiosks.

At the heart of this is the 20,000-crore National Optical Fibre Network (NOFN), which aims to utilise the existing fibres of state-run units such as BSNL, Railtel and Power Grid to connect gram panchayats and blocks, an the growth of the e-commerce market. The Internet and Mobile Association of India (IAMAI) estimated the Indian e-commerce market at $13.5 billion in 2014

This also comes in the backdrop of the government’s plan to set up 5,142 crore “rurban" project that entails the creation of 300 “smart village clusters" in the next three years.These will be built as economic hubs offering employment opportunities, bridging the urban-rural divide and reducing distress migration.

A Snapdeal spokesperson, said in an emailed response, “Wider connectivity will strengthen the system both on the demand and supply side. Currently, more than 70% of our sales volumes come from Tier II and III towns and the hinterland. Our experience says that the average Indian consumer in non-metro regions is very aspirational, but has limited access. Online shopping allows the consumers to order products from a wide range of brands/sellers available at different price points, without needing to travel to a bigger town."

“On the seller side, the NOFN will lead to unprecedented market access for our traditional artisans and small businesses. For the first time they will be able to connect to the buyers directly, bringing much deserved focus to our handloom and handicrafts industry," the Snapdeal spokesperson said. “NOFN coupled with the government’s financial inclusion initiatives will lead to rapid adoption of digital wallets in rural areas, providing a convenient and secure payment mechanism to people to transact online," he added

“With rising Internet penetration and the ongoing smartphone revolution, customers in smaller towns and villages now have great access to quality products at low prices. Currently, about 50% of the orders on Amazon.in come from outside the top eight cities," said an Amazon spokesperson, in an emailed response.

Further, the government’s flagship programme Digital India, which aims to put all government services online, is expected to act as a catalyst for the Indian information technology industry’s growth.

Commenting upon the opportunities offered through this roll-out, Union telecom and information technology minister Ravi Shankar Prasad said last month that around 60% of the business of the e-commerce firms comes from small towns and mofussils.

“Snapdeal was the first e-commerce company to foray into regional languages by making its website available in Hindi and Telugu, aiming to cross the language barrier to tap rural audiences," the company spokesperson, adding, “Snapdeal is working with various partners to provide assisted e-commerce service through rural kiosks, where the partner agent assists customers to make purchases of their choice from the Snapdeal platform. These kiosks also serve as collection centres in areas where buyers do not have identifiable addresses."

However, analysts say that it may take some time before rural India comes online for buying things.

“There are two pieces to this problem," said Rohit Bhatiani, director, Deloitte India.

“One is reaching out to the consumer by connecting rural India through optical fibre. The other is to make them digitally literate to make them actually buy online," he said.

Before rural consumers can come on the e-commerce platform, he said, they have to be made aware of these e-commerce services, they need get used to buying online and companies need to be able to deliver products to them.

“While from the rural consumption perspective, for e-commerce companies, this is a very good area to look at," said Bhatiani. “However, to unleash the real potential of this market, the companies need to go down to the level of educating rural consumers, getting them on the platform and setting up the supply chain to reach these areas. So in the short run, these companies may need to come up with the innovative hybrid models—somewhere between brick and mortar and online such as assisted shopping for consumers—to tap the rural market."

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