Online shopping trends and opportunities in India

Infotech Lead India: Just the thought of standing in a serpentine queue at the cash counter at a store, waiting for your turn, when you could buy the same goods from the comfort of your home at competitive prices and have the goods delivered to your doorstep is enough to send you rushing to your PC to shop online!

Whether you’re looking to buy groceries or the latest smartphone, chances are that you would get a far better deal while shopping online. Indian consumers are increasingly aware of this and are no longer as wary of online shopping as they were years ago.

A recent report by Google India indicates that online shopping in India registered an impressive growth of 128 percent in 2012 as compared to 40 percent growth in 2011. Going by the trend, online vendors are optimistic about even more better business volumes this year.

According to a report by Forrester Research, India’s eCommerce market is at an early stage but is expected to see huge growth over the next four to five years. An increasing number of global companies are eyeing the rapidly growing eCommerce market in India as improvements in infrastructure are made and India’s economy grows.

Around 59 percent of online consumers in metropolitan India already make purchases online at least monthly. eCommerce revenues in India is expected to increase by more than five times by 2016, jumping from US$1.6 billion in 2012 to US$8.8 billion in 2016.

According to Muralikrishnan B, country manager, eBay India, metros contribute to 51% of transactions while Tier 2&3 cities contribute about 41% of transactions and rural India contribute to 9% of transactions on eBay India.

Non-metro purchases of five key gadget categories – mobiles, laptops, tablets, digital cameras and television, on eBay India in July-Sep 2012 — have gone up by 27 percent as compared to Q2 (Apr – Jun, 2012), Muralikrishnan said.

From furniture to diamonds and everything in between, the wide range of products and choices available to consumers with free delivery to their doorstep is making more people opt for online shopping in India. Ease of  shopping, the wider choice available online, better discounts, speedy delivery of goods and the ability to pay cash on delivery  and money back guarantee are key drivers.

The convenience of avoiding travelling to shop and the time saved in bargain hunting are added advantages. Almost all portals offer an easy return policy, so even apparel shopping is seen gaining momentum as buyers are no longer worried about being stuck with the wrong size or fit of clothing. For people who confidently use the credit card payment option for shopping, the ability to convert high value transactions in to EMIs is quite an attractive incentive.

Google’s report revealed that in 2012, 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.

Online retailers are coming up with innovative concepts everyday to make online shopping a more pleasurable experience.

Recently,, a solely online retailer of undergarments for women conducted a lingerie-fitting workshop for women employees at Ciber, a Bangalore-based IT consulting and outsourcing firm, to help consumers select the best fitting lingerie while shopping online.

Zovi, an apparel retailer that sells in-house designed labels, rolled out a virtual trial room to enable its buyers to check out how select merchandise looked on them via an interactive webcam.

Myntra recently came up with a ‘Try & Buy’ concept in which consumers could shop for a product online, get it delivered at their home, try it out and then decide about buying it — something that one does at mortar-and-brick outlets. The multi-brand retailer has seen a sharp jump in the number of visitors shopping on its portal since the launch of the try-and-buy scheme.

Fashionara, a multibrand online fashion retailer, has ‘online stylists,’ much like shop-floor assistants, to guide buyers through certain fits and categories. These kinds of initiatives provide touch-and-feel comfort to Indian consumers, for whom the inability to touch or try the goods before purchase was a hindrance to shopping confidently online.

Increasing use of mobile internet is also contributing to the surge in online shopping with Google receiving double the number of queries from mobile phones in 2012. As many as 30 percent of all shopping queries in India come from mobile phones, according to Google. With better phones and tablets to be available at cheaper prices, mobile internet usage is set to grow and therefore online shopping will also grow alike.

Rising Indian consumption demand, increasing broadband penetration, lower device costs, increased awareness and confidence in online shopping continue to be the key drivers of the online retail industry, according to e-Bay’s Muralikrishnan.

Social networking sites also play an important role in driving consumers online and getting them to engage with brands. India has 51 million Facebook users, the third-largest audience in the world after the US and Brazil.

However, Indian e-commerce industry faces a number of challenges, according to Muralikrishnan.  They include lack of robust ecosystem especially in the area of product delivery. Owing to the vast geography of India, it is sometimes challenging to reach remote areas faster than it usually takes in the present scenario.

In a young nation like India where 54 percent of population is under the age of 25 who will increasingly prefer E-shopping, it seems that the best is yet to be, for online shopping!

Sangeeta Sudhakaran
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