Is online shopping booming in India? - An Empirical Study

Posted in Marketing & Strategy Articles, Total Reads: 12754 , Published on 04 July 2013
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Online shopping in India is an emerging trend for marketers to promote their merchandise in wide geographical area using internet and the trend looks likely to grow upwards over the coming decade.

India is the 5th country in world ecommerce and 2nd country in Asia. India seems to have grasped the ability to shop merchandise through internet. Mobile internet is being enormously responsible for opening up the online world to Indian consumers. There are reports suggesting that by the end of 2013 over 300 million Indians will have access to the internet through mobile phone technology and other platforms, about the same amount of people in USA to put that into context.



Reports show that out of the millions accessing the internet in India, over 8 million regularly shop through internet. This figure is set to grow exponentially as well. Google is the internet search engine that is predominately used throughout India. Below is a breakdown of top 4 popular searches in 2012 in India.

  • Electronics 28%
  • Books/educational material 15%
  • Beauty and personal care products 10%
  • Home products/furnishings 6%



The market share in India is one of the fastest growing e-commerce markets in Asia-Pacific and the industry expecting it to grow $8.8 billion by end of 2016.


India has encountered a great exponential increase in its online market. The youth of our country have contributed a lot to this increase irrespective of the geographical locations. The people of age group 15-25 years literally live and breathe through internet. Purchasing items with just few clicks has become the newest and the latest trend of shopping, which has not only saved time but more importantly money. In today’s world, no one has time to walk to different shopping malls or to cover great lands to buy products to fulfill their daily needs.


A recent statistical data has shown that Indians more than ever are purchasing all sorts of products through online shopping portals. These days even used computers are being purchased online. As of June 2012, India has the base of 137 million internet users and the inclination towards online shopping in youth will help the online retail industry to reach a mark of 7,000 crore by 2015. The penetration of online shopping and money spent in India is much lesser when compared to USA and UK, but it is growing at a much faster rate than expected and with new entrants in larger number.


Factors encouraging online shopping in India

The growth of the online shopping in India is immensely growing and is getting better and stronger day by day. The following are the prominent factors why online shopping has flourished in India:

1. Broadband internet: After 2005, a rapid growth has been seen in the people using internet and currently there are more than 65 million people log-in on to web. This is due to increased internet services and penetration of 3G services that has given faster internet access.

2. Standard of living: The living standard of the people has made them inclined towards online shopping. The increased per capita income has also played its part in this inclination.

3. Availability of wider range: Online market has a much wider range of products than any retail shop. People have found the products online and bought them those are not available at the retail shops.

4. Lifestyle: In this busy lifestyle, lack of time for offline shopping and urban congestion of traffic has led the online shopping market to step up itself.

5. Free classified sites: These sites have been launched where more consumers can buy and sell used goods as well.

6. Competition in online market: Competition among the online shopping websites has attracted more customers to go for online shopping.

7. Discounts and cheap rates: Through offers these sites sell the products to customers. Hence, products can be purchased at lesser price than the offline markets and not sacrificing the quality.

8. Coupons: Availability of different discount coupons on the sites proves to be a great profit for the customers.

9. Improved online banking services:  With improved and safer online banking services people are now less afraid to make payments online which in turn gave them faith to shop online.

10. Cash on delivery and home delivery: Cash on delivery along with home delivery has played a great role in the inclination of people toward online shopping.

All these factors have encouraged people to shop online and have also helped them to transform themselves into better online shoppers.


Highlights of Great Online Shopping Festival

The first industry wide 24 hour’s online shopping festival “Great Online Shopping Festival” organized by Google India on 12-12-12, has been a huge success with unprecedented number of users coming online to find best deals. The festival saw participations from over 50 leading ecommerce companies in India and was aimed to encourage shoppers to adopt online shopping with the focus to reach out first time online shoppers. The following are the insights of this event:

1. Myntra.com witnessed many first time shoppers engaged in high value transactions. Shoppers have seen great value in the special discounts offered by Myntra.com specifically for that 24 hour period.  Through this offer, they have seen increased in traffic of 75% and over 120% increase in sales with an upward trend on that particular day.

2. Homeshop18.com has recorded 300% increase in sales and most of their electronics and lifestyle offers were sold-out by 3:00pm on that day.

3. IndiaTimes shopping has seen 40% hike in unique visitor’s traffic and 70% of transactions using GOSF have been made by new customers who have never shopped on IndiaTimes Shopping earlier.

4. Snapdeal has seen a jump of more than 50% in their daily traffic.

5. Pepperfry.com has recorded 40% growth in traffic and new visitors to the site. There had been a 25+% uptick in items sold & transaction vibrancy is high.


Recent updates of online shopping in India

The E-commerce industry in India is going through some turbulent times, and websites are either shutting down or being acquired. Here is a quick overview of all the e-commerce companies that have either shut shop or been acquired this year.


May-2013

1. Snapdeal acquired Shopo.in, an online marketplace for handicrafts products.

2. Flyte, Flipkart’s online music store has shut down its music portal due to lack of consumer uptake.

3. 21Diamonds.com has closed its operation in India due to unavoidable business reasons.

4. KoolKart.com -apparels and fashion products portal has been shut down due to business reasons.


April-2013

5. Myntra.com has acquired San Francisco based virtual fitting room startup Fitiquette.

6. Baby product-seller Babyoye.com merged with Hoopos.com, which also sells baby products.


March-2013

7. Urbantouch.com online fashion retailer for men was shuttered less than a year after it was acquired by clothes retailer FashionandYou.com.

8. Buytheprice.com, a site connecting buyers and sellers was bought by Tradus.com, another site offering a similar service.


February-2013

9. Fashion retailer Zovi.com has bought local rival Inkfruit.com.



Conclusion

Online shopping is a different experience everyone can make the shopping creative over the internet as you get used to it. There can be lot of anxieties about online shopping when you get into it for the first time. As you experience more and more of it those apprehensions get disappeared slowly. Remember that if you stick to the basics, online shopping becomes more enjoyable and easier than real world shopping.

Having access to online shopping has truly revolutionized and influenced our society as a whole. Use of technology has opened new doors and opportunities that enable for a more convenient lifestyle today. Variety of products, quicker services and reduced price are the three significant ways in which online shopping influenced people in India and world as a whole. However, this concept of online shopping led to the possibilities of fraud and privacy conflicts. Unfortunately, it has shown that it is possible for v and criminals to manipulate the system and access personal information. Today with the latest features of technology, measures are being taken in order to stop hackers and criminals from accessing private databases. Through privacy and security policies, website designers are doing their best to put an end to this unethical practice. By doing so, society will continue to depend upon online shopping, which will allow it to remain a tremendous success in the future.


This article has authored by Hemanth CR Patna


References:

1. Collier - eBay Business for Dummies

2. Friedman - Amazon.com for Dummies

3. http://www.theindianeconomy.com

4. http://www.voanews.com

5. http://www.indiainfoline.com

6. http://xtendedview.com

7. http://www.iamwire.com

8. http://www.forbes.com

9. http://marketingland.com

10. http://www.statista.com

11. http://www.medianama.com

12. http://www.comscore.com



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