The ever exploding Indian e-commerce market is expected to rise to $100 billion and higher by 2020. The factors contributing to this growing trend are the increasing usage and reach of Internet, higher incentives by sellers in terms of discounts and most importantly the growing trust among users to buy on-line. The retail segment itself is expected to be the biggest contributor to the tune of $69 billion.

With these statistics the industry has to constantly evolve and understand the user trust mechanics to keep up the growing pace. So one of the key challenges faced by the portals is: “How to build customer trust”?There is a high cost associated with attracting new customers for an e-commerce portal. Therefore, customer retention is a crucial requirement for business survival. Building customer trust translates to loyalty which automatically implies customer retention.

The factors which affect customer trust and loyalty are:

  • Ease of use of the portal, which include information accessibility, choice and comparison of similar products, ease of ordering and navigation.

  • Handling of customer data securely: financial details, shopping cart information.

  • Responsiveness and reliability of the website in case of high load due to special events like festivals.

  • Assurance: clear returns and refunds policies.

  • Customer service: empathy towards users and prompt issue resolution.

However, one of the counter challenges being faced by e-commerce companies is “How to trust the customer?” Once a user creates the account, the portal has to trust the customer credibility. There could be huge revenue losses if the user is not genuine, especially in the case of Cash-On-Delivery option. There could be a sms/email option to validate the customer before actually shipping the items. There are additional challenges including automatically identifying unusual customer behaviours. For example, customers who order and return items almost every time just adding to the portals shipping costs.

The winners of this game will be the ones who successfully tame this double edged sword. But remember, the winnings are huge too.