Google India’s study forecasts exponential growth in online shopping in 2013

Infotech Lead India: Indian internet users are getting increasingly comfortable with online shopping. A report compiled by Google India highlights exponential growth in interest in online shopping by Indians as per data recorded on Google Trends. The report was compiled by combining consumer interest observed on Google search along with online research conducted by TNS.

In the year 2011 to 2012, online shopping in India saw 128 percent growth in consumer interest as compared to only 40 percent growth in 2010 to 2011. Maintaining the upward trend, online shopping is expected to see exponential growth in 2013.

LtoR – Rajan Anandan, VP & Managing Director, Google India and Nitin Bawankul, Industry Director, Google India

Consumer interest on Google search for consumer electronics (34 percent) was the highest followed by apparels & accessories (30 percent). Other product categories that Indians searched for online were books (15 percent), beauty & personal care (10 percent), home & furnishing (6 percent), baby products (2 percent) and healthcare (3 percent). Trends suggest that consumer interest in apparels & accessories will be greater than consumer electronics in 2013 in terms of absolute query volumes.

The report also charted over 2x growth in niche product categories in 2011-2012 on Google search. It was the fastest growing product category in terms of query volume as compared to electronics, baby products, Home & furnishing, & healthcare.

Rajan Anandan, VP & managing director of Google India said, “With approximately 8 million Indians shopping online in 2012, online shopping industry in India is growing rapidly and will continue to see exponential growth. By looking at the trends in 2012, we expect 2013 to be a strong growth year for players who’re focused on fast growing categories like apparels & accessories and niche product categories like baby products, home furnishings & health-nutrition. We expect the growth to come from outside of top 8 metros as was evident in our recently concluded ‘Great Online Shopping festival’ which saw over 51 percent of traffic from non-metros.”

With the growing mobile internet user base in India, mobile phones are becoming a contributor in the surge for online shopping. Google witnessed 2X growth in number of queries from mobile phones in the year 2011 to 2012. Currently, 30 percent of all shopping queries in India come from mobile phones. An online research conducted by TNS Australia of the internet users in the age group 18 to 50 from Delhi, Mumbai, Kolkata, Bangalore, Ahmedabad, Hyderabad & Pune validated these trends.

The research revealed that 90 percent of online shoppers intend to buy more products online, reflecting the positive experience of the users.

Top product categories ever purchased online were apparels & accessories (84 percent), followed by electronics (71 percent), beauty & personal care (64 percent), books (62 percent) and household products (61 percent). Baby products (39 percent) and health &nutrition (43 percent) product categories were also gaining popularity with online buyers.

The frequency of purchase was higher for categories like apparels & accessories (34 percent), beauty & personal care (33 percent) products in comparison to electronics (28 percent). Repeat purchase makes these categories more profitable.

Online ticketing emerged as the most effective gateway to converting more users to shop online. Online ticket consumers were also likely to spend higher average amount of INR. 2347 on their first product purchase in comparison to INR 1626 for internet users. Online ticket buyers were found to be more comfortable with the use of debit cards (24 percent), credit card (19 percent) and cash on delivery (55 percent). Regular internet users  preferredcash on delivery as the mode of payment (74 percent), followed by debit card (18 percent) & credit card (5 percent).

In terms of motivators to shop online, cash back guarantee was the most attractive benefit of shopping online, followed by cash on delivery facility, fast delivery, great deals and access to branded products.

The consumers also highlighted some deterrents of shopping online – the number one factor being the inability to touch and try the goods before purchase. Fear of faulty products, fear of posting their personal and financial details online and the inability to bargain were cited among the other reasons.

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