30-09-2019
E-commerce, insurance may turn out to be India’s newest sunshine sectors
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30-09-2019
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E-commerce, insurance may turn out to be India’s newest sunshine sectors
India's journey on the path of economic reforms has given birth to many emerging sectors. A classic example is the evolution of NBFCs, which has played an important role in financial inclusion by complementing the banking sector in reaching out credit to the unbanked segment of society, especially MSMEs.
As of now, many sectors such as banking, IT and pharma have seen growth at a decent pace, and they have reached their saturation points. Due to recent implementation of demonetisation and GST, industries in India have faced a lot of challenges. Economic growth has stagnated, leading to hiccups in many sectors. But we are sure it is going to be shortlived. At this juncture, emerging sectors such as e-commerce, insurance and MSME are on the verge of the rapid growth.
India, with one of the largest customer bases, has always welcomed innovative concepts, products and incipient players in the business world. The country has witnessed the most promising internet revolution in the hands of e-commerce players. The sector has experienced phenomenal growth, breaking down old shopping habits and inculcating new ones. It is expected that e-commerce may boost drying consumption demand from Tier II and Tier III cities. With a gigantic 43 per cent CAGR growth rate, e-commerce regime is growing and is expected to reach $137 billion by 2020.
Many new leaders like Paytm, Myntra-Jabong have already established good brand values and a strong tussle is on between e-commerce giants for a bigger share of the market pie. So, they are roping in customers with heavy discounts, aggressive marketing and business promotion. To increase participation of foreign players in e-commerce and provide support to the sector, the government has hiked the FDI limit in e-commerce for up to 100 per cent (in B2B models).
Another promising sector is insurance, which has the lot of potential to capture the Indian opportunity. As a whole, the sector is going through a fundamental shift and has been on the forefront of economic development in India. As digital technology has the ower to break traditional barricades of the insurance sector, such as lack of awareness level, limited customer touch points, access to knowledge, service availability and payments. The government policy of insuring the uninsured has gradually pushed insurance penetration in the country, helping proliferation of insurance schemes. The future of the life insurance sector looks promising, with several changes in the regulatory framework and permission of up to 49 per cent FDI in the sector. Many foreign companies have already invested in domestic insurance companies. This business is bound to become more dynamic and competitive in the years ahead.
The MSME sector, too, is the most vibrant and dynamic one, promising high growth potential for the economy. There are many factors boosting growth in this space, like technological advancement, economic needs and government’s policy push, like Digital India, etc. The government is putting all efforts to support the sector. It has always been generous to the MSME sector, enabling it to boost employment and increase growth. Efforts are likely to boost the emergence of new startups in this field while also strengthening the economic and market standing of existing enterprises.
Source: The Economic Times