The past year has been an eventful year for the digital media industry in India and this new year, we are on with new things. To take a look back at 2011 and have some expectations for 2012, India Digital Review spoke to experts of the digital industry to understand, in their view, how the past year has been and what lies in the present year.

How 2011 was?

According to Sachin Bansal, co-founder and CEO, FlipKart.com, 2011 has seen a huge growth spurt in the ecommerce sector. “This growth is largely due to the fact that the key enablers for ecommerce are currently coming together in the Indian market. Aspects like broadband and credit card penetration, wireless connectivity, penetration of hand-held and computing devices have found widespread acceptance today unlike their limited penetration in 2001.  Moreover, with mobiles, especially smartphones, becoming more accessible to the average consumer, internet access through mobile platforms is also on the rise. A natural fallout of all this has been the creation of a solid base for ecommerce to grow and thrive. Naturally, this sector is witnessing a high level of interest from various players,” Bansal added.

Pointing out the positives that happened in 2011, Sachin Bansal said, “There has been a visible change in the consumer mindset towards online sites as a viable shopping destination. An increasing number of Indians are now trusting online players as a reliable channel for shopping. Post the success of travel sites, more and more customers are beginning to appreciate the convenience of online shopping. They are beginning to realize that the choice, convenience and cost benefits of online shopping outweigh those of physical retail stores and are turning to e-commerce for more and more of their shopping requirements.  Of the 100 million internet users in India currently – a sizeable number are transacting online.”

“Secondly, the players currently operating in the ecommerce space are more organized and understand and appreciate the value proposition offered by the industry far better. E-commerce companies are today making investments in technology and innovation in order to deliver a great shopping experience. They are also taking the trouble to understand the points of concern that consumers may have with respect to online shopping and taking the trouble to address those,” Bansal said.

According to Bansal, there were no negatives, however, the industry had faced a few challenges that need attention. “One of the first challenges of a growing industry is the scale. Trying to meet up with the expectations of our consumers and providing a consistent delightful experience to them even as the base grows larger is a 24X7 exercise. Our success story with books – be it in selection, service or price – is another thing that we aim to replicate across all our categories. And managing the varying supply-chain and logistical requirements for different categories is a challenge for any ecommerce company. Secondly, ecommerce players who are serious about making it big need to understand that absolute customer focus is a must. Improving relationships with existing business partners like logistics providers, payment gateways, reliable vendors etc. are key contributors to the overall customer experience,” Bansal added.

Sundeep Malhotra, CEO, HomeShop18, was of the view that 2011 has been revolutionary for the ecommerce industry. “In spite of the obvious instability and consequential panic in the global markets, Indian markets remain virtually unaffected. In the first three months of 2011, Indian VCs alone invested over $120 million in seven ecommerce companies, a 400 per cent increase over the same period just last year. Ecommerce in the country has seen about 60 to 70 per cent growth over last year. It is growing at the rate of 2-3 per cent on a month-on-month basis and almost 50 per cent annually,” Malhotra added.

According to Malhotra, as far as the positives in 2011 are concerned, ecommerce is going great guns as seen from an entrepreneur’s point of view and from the view of a consumer who is looking extensively for convenience and incredible range of options. He was also of the view that ecommerce has finally proven its mettle as a serious business rather than an experimental venture by IT enthusiasts, as evidenced by the heavy flow of VC investments in 2011.

In Sundeep Malhotra’s point of view, the negatives involved the delivery aspect which remained a challenge due to differential laws across states, and a vast section of unstructured service providers. And secondly, the supplier base is considerably fragmented and can be at best defined “rickety”.

Anuj Kumar, CEO, Affle, was of the view that there was significant growth in 3G and 2.5G mobile internet subscribers reaching over 70 million in 2011. Moreover, Kumar felt that the decreasing cost of tablets and smartphones (lower than 80 USD) have made them much more prevalent and leading to increased reach and ease of consumption of mobile internet services for millions of new users.

The negatives, according to Kumar, have been that growth of multiple handset platforms and versions making cost of innovation for mobile applications quite high. Secondly, the significant growth of multi sim users, had made it tougher to precisely target users for relevant products.

Pointing out his views on positives that happened in 2011, Sameer Pitalwalla, Sr. Vice President, UTV Interactive, said, “Ecommerce announced its grand arrival, and how--from the large horizontal portals like FlipKart to focussed verticals like Exclusively.in and FashionAndYou.com. Secondly, the growth of android as the dominant smartphone OS, beating out iOS and OEM's going the smartphone route."

According to Pitalwalla, two negatives in 2011 were ad spends on digital remained trivial and TRAI's regulations on mVAS, although good in intention, needed a lot more thought before being mandated.

How 2012 will be?

Sachin Bansal of FlipKart feels that 2012 will further define the contours of this fast growing industry. “With a change in perceptions related to online shopping, expectations will get better defined. At FlipKart, our biggest goal going forward will be investment in technology and supply-chain - larger warehouses, more transparence in the order to delivery process and constant application of technology in both back-end and customer facing processes. Larger players will emerge in this space, thus fueling further investments and growth in the ecosystem. The overall base of consumers transacting online will also grow bigger,” said Bansal.

Sundeep Malhotra of HomeShop18 said that experts believe that the online retail industry in India will be worth Rs 7,000 crore ($1.5 billion) by 2015. “Reflecting the consumer buying behaviour and content consumption patterns, 2012 could be the year when investors graduate to the next level by exploring investment options in broader online/mobile services like music, video, gaming, travel 2.0 and jobs 2.0 that include elements of social, local and mobile as part of the value proposition. Another element which must be highlighted is the expected advent of new major players in the arena, such as the likes of Amazon et al. The latest entry in the space is most likely to drive up the bar and encourage a faster dash to the bigger numbers (expect 100 to 200 crore as initial figures),” added Malhotra.

Anuj Kumar of Affle held that mobile internet would outgrow PC internet in both users and usage in 2012. Smartphones would contribute 10 per cent in new handset shipments; 4G launch at predatory price points will create a significant boom in mobile internet data usage at an experience which may be better than current broadband and growth in availability of local language content would ensure that the digital infrastructure reaches and benefits a lot more Indian users.

According to Sameer Pitalwalla of UTV Interactive, enough of demand will be seen for local innovation using mobile and social in 2012 and digital products that address giant needs outside the field of entertainment will get evolved.