These rosy statistics, however, mask the enormous pressure ecommerce businesses are facing. While consumer demand grows, tight margins due to fierce competition are making life tough for the companies who operate in this space.

So what can ecommerce sites do about this situation? How can they break free from the competition and still be around to benefit from the projected ecommerce industry growth?

To find out, Econsultancy, in association with Magento and BORN Group, recently held roundtable discussions with senior ecommerce marketers in Mumbai. At the event, participants highlighted their current challenges and discussed potential solutions. Below is a summary of the topics covered on the day.


1) Price has become the main differentiator for ecommerce businesses

The first thing mentioned by participants was that ecommerce sites had fallen into a situation where price has become the sole differentiator between providers. This has created a zero-sum game for ecommerce businesses and has created, in the words of one attendee, a ‘rat race’ among competing firms.

2) Ecommerce business struggling to satisfy consumers’ heightened expectations

Another concern voiced by delegates was that consumers now have inflated expectations of ecommerce site service levels because they are regular users of some of the world’s best ecommerce businesses. As a result, consumers expect everyone in ecommerce to have an app as good as Uber’s, a review section like TripAdvisor and fulfillment like Amazon.

While attendees said that they have learned a lot from the market leaders, they also indicated that they did not have the resources to compete with the best ecommerce providers.

3) Customer engagement with ecommerce sites has become transactional

Additionally, attendees lamented that the relationship between their ecommerce site and even good, regular customers remained transactional. That is, there was little indication that customers were seeking anything more than the lowest price during most site visits.

As a result, ecommerce firms have had to reduce costs and lower prices, which have made it difficult for them to address the first two problems listed above.


1) Ecommerce sites should focus more on branding

Branding, as one participant said, is important for ecommerce sites. Having a highly-visible, recognizable brand is the first step toward gaining consumer trust and overcoming the transactional relationship between ecommerce sites and customers.

2) Marketers should take another look at their site’s user experience

As most site visits now come from mobile, marketers needed to review their website to make sure that they are not causing friction with bad design.

Items to review include: Where do customers enter the site? Which pages do they hit most frequently? And how many clicks required to complete a transaction? All of the ‘small things’, such as navigational menus, should work flawlessly and drop-off points should be scrutinized so that exit rates are understood and minimized.

Additionally, one added, analysing and improving the user experience should become a regular programme at ecommerce sites and not a one-off tactic.

3) Consumer engagement can be improved using content marketing

Attendees agreed that ecommerce sites could also use content marketing to change the transactional relationship they have with their customers. Through relevant and well-timed articles, infographics and opinion pieces, ecommerce sites had the potential to become more broadly useful to consumers.

For example, one delegate from the financial services industry stated that their company had lowered cost per acquisition (CPA) figures through producing content which helped consumers prepare for the upcoming monsoon season in India. The company provided information about tyres and windscreen wipers which was unrelated to its products, but the content caught consumers’ attention by providing solutions to immediate problems. Then, once consumers were on the site, the company had an opportunity to deliver product-related brand messaging and encourage customers to move along the buyer’s journey.

4) Ecommerce businesses must make the entire customer journey consistent

Finally, participants indicated that too many ecommerce businesses focus only on the online experience and neglect offline execution.  Customers may be buying from them online but logistics, delivery, and customer service are all offline customer touchpoints.

So, in order to build customer loyalty, satisfy customer expectations and, ultimately, get out of the price-driven ‘rat race’, ecommerce businesses should seek to provide a consistent integrated experience across all the whole customer journey.

A word of thanks

Econsultancy would like to thank our table moderators, Satyarth Priyedarshi, Head of Product Marketing, JioChat and Soham Wagh, Global Marketing Lead, GSK as well as our sponsors for the day, Magento and BORN Group.

We’d also like to thank all of the participants who took time out of their busy schedules to discuss their concerns about ecommerce businesses and come up with some possible solutions.  We hope to see you all at future Econsultancy events!

Why protecting your competitive price position is critical to profitable growth