5 Key Challenges Facing Modern E-Commerce

Stressed man in office working on computer overwhelmed

According to recent data, e-Commerce spending has risen to $2.1 trillion in the past few years and will reach $5 trillion by 2020. A rapidly growing sector signifies a strong market and greater future potential due to consumer demand. Despite successful growth indicators, a significant number of e-Commerce businesses fail in their first year itself.

So, just what are the challenges that plague the e-Commerce sector?

Borderless economies

With the advent of mobile technology, consumers have been empowered with access to a digital economy, taking globalization to a new level. Online retailers continue to expand to new geographies and breaking international borders.  This leaves companies to deal with government regulations, geopolitical status, “stateless income”, and extensive local and international competition. Modern e-Commerce businesses are in a race to provide the best premium services to their consumers while finding the right balance between globalization and localization.

Building trust and brand as the key differentiator

Building consumer trust and brand loyalty is essential for any business to succeed. The traditional brand building exercises are mostly irrelevant in the current e-Commerce sector. It is easy to lose an online customer to the “next big thing”. Failure to deliver on any one aspect of your customer’s demand could lead to failure in retaining customers. Today’s consumers have come to expect superior customer experience, anything less than stellar will not meet their expectations.

Disparate systems lead to poor experience

Companies systems for data management are generally divided into, Point of Sale (POS), Enterprise Resource Planning (ERP) and CRM systems. The systems differ tremendously in their architecture, deployment, and usage, are usually built on dated technology and are prone to stagnation. What does this mean for businesses?  Older systems interfere with internal business demands, distract the focus from the core tasks, and result in a great deal of your resources (cost, time, labor) being wasted on navigating separate systems that are difficult to use.

For an e-Commerce structure to work, all disparate systems need to be integrated under one platform. Modern cloud technologies accommodate these requirements and also address platform extensibility issues. As Vikram Bhat, Chief Product Officer, Aditya Birla Online Fashion Pvt., Ltd. states – “With its out-of-the-box functionalities, scalability, integration capability, and minimal customization requirements, Oracle Service Cloud outperformed Salesforce.com and Zendesk. It also provides industry best-practices and fits well with a typical customer service environment.”

Lack of cross-departmental collaboration

Saurabh Chandra, Head of IT, Myntra talks about the challenges of running an online store that involve 4 key divisions – Technology, Data Curation, Product Delivery and People Management. Modern companies face the challenge of collaborating between different departments, some geographically isolated in different time zones. Despite these challenges, marketers, merchandisers and e-Commerce managers need to learn to strategically operate through one integrated channel.


Modern e-Commerce thrives on delivering the best personalized experience to their consumers. Managing a repertoire of customer data is a challenge in itself, added to that, e-Commerce companies have to understand how to use the data. Delivering customized content in the form of advertisements, special offers etc. are some of the methods that customers will come to not only expect but demand.


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