India is one of the fastest growing e-commerce markets in the world, but the country’s online retailing infrastructure is struggling to keep up.
According to a new index compiled by the United Nations, India lags way behind many other economies of the world, including Brazil, China and Sri Lanka, in terms of its ability to serve online customers.
The U.N. Conference on Trade and Development (UNCTAD) business-to-consumer e-commerce index shows that India last year came 83rd out of 130 countries in the ranking that measures the number of Internet users, the availability of secure server infrastructure, credit card penetration and postal delivery.
Luxembourg, Norway and Finland came out top as the most e-commerce ready markets in the world in that order. India scored 40.6 on the index compared to Luxembourg’s 91.7.
While almost all of India has access to postal delivery at home — a big plus in e-commerce economics — the report stated that India remains predominantly a cash-based economy and the vast majority (80%) of all online transactions are paid for in cash upon delivery of the item.
With more than 300 million Internet users last year, India is the world’s second-largest Internet market after China. The number of Internet users is expected to more than double in the next five years as the number of smartphone users grows in tandem.
However, only 1.8% of over 15 year olds have access to a credit card and there were 48 secure servers for a million users in 2013, thus seriously restricting on –line purchase by Indian consumers.