5 Challenges the E-Commerce Industry Is Facing

Raj Shamani
3 min readMay 12, 2023
Image from Freepik

India’s e-commerce market is expected to reach US $200 billion by 2026. It is one of the main pillars of India’s economy and it has also helped create employment. Now, shopping is a relaxed experience because you can shop from anywhere. Many entrepreneurs prefer this medium to set up businesses, as this has a considerably high success rate.

However, the scenario is slowly but acutely changing. The fierce competition makes it arduous to navigate through the dynamics of the sector. Let’s take a look at the challenges of the e-commerce industry.

1. Privacy of users

When we shop online, we must enter our bank details; or go through a gateway for online payments. Rates of cybercrimes are increasing by leaps and bounds, and many of us do not feel safe divulging our private information to a public website.

Today, e-commerce fraud is common. Many shoppers do not want to go through with their shopping because of this issue.

2. Logistics expenses

We often are not sure of the sizes of a particular garment. Or after a product arrives, we decide not to keep it. The procedures we follow for this are elementary. We order a return request, and somebody picks it up, and we get our money back in the next 2–3 days.

The logistics cost involved in the process is invisible to us. The cost of shipping and labor of the people in the warehouse gets doubled. Since most sites have a return window ranging from 7 days to 1 month, fraudsters often misuse it. They use the product within that window and then return it, knowing they can get the money back in a few steps.

3. Issue of cart abandonment

This is probably one of the biggest challenges in the e-commerce industry. It is quite common for people to visit a site, add many products to the cart, and leave it there for weeks. There can be many reasons for this, which varies from shopper to shopper. So they may add products worth thousands of bucks in their cart, but only end up buying one or two items out of them. The profits are ultimately not impressive for the company.

Many websites deal with this by sending constant reminders or reducing cart prices. But even that isn’t always enough. There’s no set way to overcome these challenges, irrespective of the company’s age.

4. Gaining the trust of the audience

Buying online involves a lot of trust between the buyer and the seller. The buyer wants a quality product to be delivered within the due date. Hence, only a few people rely on a new website. They tend to fixate on the ones they have previously used.

Getting attention organically demands time. You have to promote your website for your audience to get noticed consistently. Even then, the estimated time of arrival (ETA) is uncertain and may take months or even years.

5. Not prioritizing customer support

The e-commerce industry is expanding rapidly, but that is not solving glitches for customers. They face difficulty regularly while shopping online. Customer support is now more accessible with chatbots, which help address a problem faster. Despite that, it is always a good idea to have executives stand by to call a customer and provide assurance.

Immediate reply to grievance emails also works; it is one of the best ways to retain customer loyalty.

Like any other market, the e-commerce industry has its own challenges. Over time, brands will understand how to overcome them. However, there will always be a few who cannot, and eventually, they will have to fizzle out. If you select this as your mode of operation, make sure you are aware of the e-commerce industry’s challenges.

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Raj Shamani

200+Speeches in 26+Countries on Financial Freedom Investor: Startups, Stocks & Crypto