Atom Payment Gateway: Starting from Changing Traditional Payment Habits - Chinese Companies Help Accelerate E-Commerce Development in India

International Online News (By Xue Yuan and He Xingyu): 2017 China New Economy Overseas Development Forum and the 2nd China-India Internet Dialogue Conference were held in Beijing on 16 March. Entrepreneurs and investors from China and India gathered to focus on the international expansion of China's Internet industry as well as win-win cooperation between China and India in the Internet sector. At the E-Commerce, Logistics and Consumer Forum, representatives from the e-commerce and logistics industries of China and India shared the current status and development of e-commerce, logistics and Internet consumer sectors in India.

After more than two decades of development, China's Internet industry, including e-commerce and logistics, has gradually matured and become capable of investing abroad. Due to fierce competition and market maturity, Chinese e-commerce and logistics companies have begun to seek overseas development.

After Prime Minister Narendra Modi took office in 2014, he actively promoted policies such as "Make in India", "Digital India" and "Smart Cities", and began to simplify the business and service tax system, hoping to attract investment and promote economic transformation, which is similar to China's reform and opening-up policy. He has also begun to simplify the business and service tax regimes in the hope of attracting investment, developing India's manufacturing sector, promoting economic transformation and improving infrastructure, similar to China's reform and opening-up policy.

According to a report by investment bank Morgan Stanley, the current market size of e-commerce in India is around $25bn and is expected to reach $119bn by 2020, with an online consumer base of 320 million. The purchasing power of Indian consumers is also on the rise. in 2015, the average online spend of Indian users was $247, which is expected to increase to $464 by 2020. In addition, the number of online sellers in India grew by 95% between 2013 and 2015 and is expected to reach 220 million by 2020.

Zhang Jun, general manager of Alibaba B2B's Overseas Supplier Development Department, said in his keynote speech that just like China a decade ago, India is in dire need of foreign commodities and promotion of its products overseas. Alibaba B2B's platform focuses on export trade for Indian SMEs. Currently, Alibaba has 4.5 million registered users in India, making it the company's second largest market in the world. "Many small businesses receive a large number of orders through our platforms in Europe, the US and Dubai. They joke that the first thing they do every morning is not to brush their teeth and wash their face, but to check if there are any buyer messages or orders online."

Meng Lianhua, head of Gome Internet's overseas business department, introduced that in April this year, Gome will take its first step overseas by launching its first social network sharing and consumption platform in India. "In China, social e-commerce or social sharing business is not a new term, but in India, it may still be a relatively advanced model."

Driving new models, changing or creating new consumer habits is always a challenge, but Gome is "relatively optimistic" about the Indian market.

However, the international expansion of Chinese e-commerce in India has not been smooth sailing. Lagging local consumer attitudes, outdated payment methods, slow logistics, outdated Internet and hardware facilities, and inadequate warehousing facilities are all important obstacles to the development of India's e-commerce industry.

In the Indian e-commerce industry, cash-on-delivery or even cash-on-delivery payments account for 801 TP3T of all payments, which pushes up platform management costs and drastically reduces e-commerce profitability, compared to just 0.51 TP3T for third-party e-wallet payments.

In November 2016, Indian Prime Minister Narendra Modi abruptly announced the nationwide abolition of 500 and 1,000 rupee notes, and consumers have had to change their payment habits, gradually accepting new payment methods like bank cards and e-payments. Speaking at the conference, Sam Patel, CEO of Instamojo, India's most popular mobile payment app, said that e-payment companies like Instamojo have benefited greatly from this. "Since the 'demonetisation campaign', nearly 10,000 small businesses have started using our payment software every day. Previously, people preferred cash payments, but now they are starting to use digital payments because they have no choice."

The Government of India has launched the People's Wealth Programme to expand the reach of banking services. Since the implementation of the programme, more than 110 million Indian citizens have received debit cards. Traditional banks have also begun to offer fast e-payment services to meet the online shopping needs of their users.

In addition, the National Payments Corporation of India launched the Unified Payments Interface (UPI) in April last year. The system will connect several member banks to enable unified online payments and account management and support inter-bank transactions. These measures are expected to change consumers' reliance on cash and foster online payment habits.

Parvesh, co-founder of Delhivery, India's largest logistics company, said the growth of the logistics industry is closely linked to the development of e-commerce, and the two go hand in hand. Statistics show that last year, China's logistics industry handled more than 30 billion pieces of goods, while India has only 400 million pieces. The potential of India's logistics industry needs to be tapped. "This is my second visit to China and I have seen the rapid development and changes in the Chinese market, which is at least 7 to 10 years ahead of India. I think Indian companies can learn two things from China: firstly, to operate efficiently at low cost and realise cost-effectiveness; and secondly, to build stable partnerships."

Wan Hong, co-founder of Crazybee, a student instalment spending and microfinance platform in India, said he has worked in India for many years and is very familiar with the market. "I have been working in India for 7 years, plus almost 2 years of entrepreneurial experience. India and China are very similar countries. If China's culture, business model or competitive strategy can be successfully replicated in any country, I believe India is the most likely candidate."