How Can Public Cloud Support the Growth of E-commerce in India?

By OpsMatters

Sep 12, 2024

7 minutes

OpsMatters

One of the most prominent trajectories that India witnessed since the last decade is the tremendous growth of the e-commerce industry. Thanks to smartphone penetration, this industry is gaining significant popularity among users due to easy accessibility. The major contributor to this massive growth is cloud computing, which enables ecommerce businesses to scale up or down as per their needs while reducing overall costs.

The concept of cloud computing has completely dismantled the challenges faced by business operations by helping them to seamlessly adapt to the constantly evolving market trends. The availability of the public cloud helps simplify cloud server for these ecommerce companies. It enables them to have data storage, networking, databases, software, etc., available for everyone without any hassles.

Current State of E-commerce in India

Did you know that the Government e-marketplace registered the highest Gross Merchandise Value of around $2011Bn in FY 2022-2023? The industry is reported to be growing exponentially on levers like low data prices, smartphone penetration, and increased affluence. No wonder the Government of India is focusing on providing equal opportunities to MSMEs to democratize e-commerce.

However, this industry faces several challenges, too. Some of them are:

Safety seems to be one of the biggest problems the ecommerce industry faces, as users still do not trust the entire process of online money transactions.
Information privacy is also a concern in this industry, which mainly deals with vast customer interactions and sensitive data pools.
Several payment gateway failures during online shopping can be a great challenge for the users to complete their transaction hassle-free.
Many business owners often ignore the value of the original software systems required for running their online platforms, which eventually leads to data thefts and privacy issues.
As most courier and logistics companies don't yet cover many rural areas, this industry also suffers from many hassles in delivering the products on time to their customers.

Due to these issues, companies often suffer from bad customer experiences. The key to success here must focus on retaining old customers while attracting newbies to the online platform, offering their advanced data security while they seamlessly start purchasing products online.

Understanding Public Cloud

The public cloud refers to the computing services offered by third-party providers to help users access the computing services and resources remotely. These resources help create a functional IT infrastructure that can handle workloads like firewalls, databases, management tools, load balancers, and software-as-a-service or platform-as-a-service elements. Users can assemble these resources to build their IT infrastructure and deploy enterprise workloads as required.

Before diving into the details of public cloud solutions and its benefits, let's get an overview of the key differences between public, private and hybrid clouds:

As already stated, public cloud computing refers to cloud computing in which a third-party vendor owns and operates the IT infrastructure and services. These are made available to users over the Internet and are typically shared as per requirement. Users can pay only for the resources they need for their business.
A private cloud refers to a setup where only one single organization owns and manages the cloud computing services. These services are only available to authorized users. A private cloud offers high security and advanced control access to users' resources and data.
A hybrid cloud refers to the combination of private and public cloud environments, where the user can select both setups to get maximum benefits. It offers more scalable and flexible options while helping businesses reduce operational expenses.

Benefits of Public Cloud for E-commerce

The advantages of using public cloud services for the e-commerce industry are:

These are secure services which can help businesses safeguard their user sensitive information while conducting online transactions.
Cloud computing can help businesses change and upgrade their IT environments as per business requirements without affecting performance and efficiency.
A public cloud is a sustainable investment for the company as one must only pay for the resources required to run the business.
Public cloud services are ideal for speeding up and simplifying innovation processes. They are easy to set up and help with easy and smooth deployments, enabling companies to retain clients while constantly updating their technologies.
Public cloud computing offers quick solutions to securely accommodate massive amounts of data and can hence be the ideal choice for companies needing high-capacity storage.
Business continuity is another benefit of using public cloud services, as even if the components fail, the virtual machines will be switching to use the computing power of the available servers.
There is no need for application administration as the provider takes care of it. Hence, this is ideal for e-commerce companies that need advanced IT infrastructure to deploy applications while maintaining high security.
The availability of scalable and flexible management tools makes the public cloud an essential integration for companies that need to implement cutting-edge security measures to protect their IT tools and deployments along with user data.

Key Cloud Services for E-commerce Businesses

Which cloud services are essential for e-commerce businesses? Let's get an overview of the top cloud services required for this industry:

Cloud storage and databases: Relational, hybrid, and non-relational databases are the different databases required for an e-commerce platform. These help with handling structured data and offer strong transactional security that eventually helps with handling customer data. Companies can store their data with strict access to advanced data security with the public cloud.
Cloud-based customer relationship management systems are software for businesses to organize and manage customer-related data across the organization. They are hosted in the cloud, offering ease of access, operations, collaborations, and speedy processing for the company and meeting continual customer needs with better responses. They ensure high scalability and flexible options to meet the development needs with advanced tools to support the growing IT infrastructure.
Content delivery networks for faster load times: This refers to the server network that remains linked to deliver high speed, connectivity, and reliable and secure services. E- commerce companies must store their files and offer easy access to website users globally without any hassles. Content delivery networks help reduce page loading times and distribute ongoing traffic across servers while improving the user experience.
Cloud-based analytics and Al tools for customer insights: These are required for e- commerce companies to deliver data-driven solutions for optimizing operational efficiency with predictive analytics, machine learning, and natural language processing capabilities. They are also needed for creating engaging product media to attract more users and using technologies to understand user interaction and purchase trends.

Case Studies: Success Stories of Cloud Adoption in Indian E-commerce

Here is an overview of the public cloud services used by the top e-commerce platforms in India:

Flipkart

Flipkart, one of the country's largest e-commerce platforms, uses Amazon Web Services (AWS) to migrate its major IT infrastructure to the cloud. As a result, the brand managed the massive incoming website traffic spikes during sales and significant events like Big Billion Days. The AWS offers a pay-as-you-go pricing model that enables Flipkart to optimize its operational costs to maintain a fully functional IT infrastructure. Overall, migrating to the public cloud helped this brand deliver an excellent user experience, reduced downtime, and exceptional website performance.

Myntra

Another major online fashion e-commerce brand in India is known to have adopted cloud solutions to improve its overall performance and operational agility. It migrated to Microsoft Azure and had since been able to handle massive amounts of customer data and maintain a substantial inventory of the same efficiently. Also, due to the availability of Azure's content delivery network, Myntra has been improving the overall site performance and delivering exceptional user experience. With the Azure analytics tools, the team can monitor customer behavior and build an agile infrastructure to improve their services while delivering data-driven decisions.

Big Basket

A prominent name in the online grocery world, this brand shifted to GCP or Google Cloud Platform to meet its constantly evolving business needs. With GCP's resources, BB could easily upgrade its infrastructure to handle more orders and meet all its customer demands, even during peak times. With advanced security features, GCP has managed to help the brand protect its customer data and maintain compliance. With the data analytics tools and machine learning strategies, the brand has optimized inventory management and delivered excellent customized customer recommendations.

Nykaa

The last one on this list is the renowned online beauty and wellness brand that has adopted AWS as its cloud solution to enhance its digital presence. With AWS's powerful infrastructure, the brand can optimize its operations seamlessly and meet customer demands while handling massive traffic during sales. Also, the ML and Al tools available from AWS are helping them gain more insights into customer behavior, thereby delivering better customer recommendations.

Future Trends in Cloud and E-commerce in India

As of September 2023, India has seen massive internet penetration and over 918 million subscribers. The government e-marketplace continues to play a significant role in the growth of the country's digital economy. Cloud servers will continue to benefit the e-commerce industry by adding more value to companies, helping them advance their data security tactics while enabling them to scale up resources as their business grows. By integrating the latest advances in cloud computing, companies will stay competitive and focus on delivering better user experiences.

Conclusion

Why shift to public cloud services? The E-commerce industry gains a plethora of benefits by switching to the public cloud. It helps reduce the business's operational expenses while adding more resources to simultaneously meet its evolving business needs. However, implementing these cloud computing facilities will vary depending on products, features, and business needs, eventually determining benefits. Hence, before finalizing the cloud server provider, research and understand your options well to get the maximum advantages of a public cloud.

FAQ Section

What is public cloud and how does it benefit e-commerce?

The public cloud refers to the computing facilities offered by third-party providers over the public internet. It is available for everyone who wants to purchase it and may be accessible in a few cases. Some providers offer these services on-demand, which helps users pay for what they use depending on their CPU usage, bandwidth or storage. In the ecommerce industry, adopting these public cloud services helps in cost savings, greater agility, global reach, seamless collaboration within teams, and better profits.

How secure is the public cloud for online retail businesses?

Public cloud models were initially risky as they were vulnerable to potential cyber threats due to their multi-tenant nature. However, with the cloud disaster recovery model, retail companies can securely store their sensitive information without worrying about data theft or loss. Backup and data disaster recovery can be retrieved from any location and eventually automated to ensure smooth business continuity.

What are the costs associated with using public cloud services?

Some public cloud computing facilities are free, while a few might be available through subscription or a pay-per-usage model. The user pays for computing instance types like CPU resources, specialized hardware, memory, etc. Also, one needs to pay for data volumes transferred in and out of the cloud along with extended storage capacity. Ensure to get in touch with your public cloud provider to understand the factors that govern the pricing model for these services.

Can small e-commerce businesses benefit from public cloud?

Public cloud services empower small e-commerce businesses to thrive in this digital era while enjoying cost efficiency, flexibility, scalability and data security.