The Click Bait
Indian consumers are increasingly favouring online shopping for their clothing needs and turning to international brands for their purchases. Chitra Balasubramaniam analyses this e-phenomenon.
Analysing the rising popularity of international e-commerce brands
“ONLINE SHOPPING HAS BECOME A WAY OF LIFE FOR A NUMBER OF INDIANS AND THE TOTAL NUMBER OF ONLINE SHOPPERS IS ESTIMATED TO GROW 3.5 TIMES TO TOUCH 175 MILLION BY 2020.”
The internet has managed to create a space without any geographical barriers. Thanks to e-commerce, physical distance is no longer an impediment to purchases. One has to still navigate through logistics, customs and duties, but it has provided customers with access to hundreds and thousands of retailers on one platform. Sitting in the confines of one’s home, without moving out, one has the luxury to flip through and see thousands of products before finalising on one. There is also the advantage of competitive pricing. With apparel, there is a belief that people like to feel what they buy. Customers like to touch and wear what one is buying to ensure that it fits them and looks good. Others have opined that apparel cannot be bought online; taste is too individualistic to be clubbed on a mass scale. However, crowds and long queues at the trial rooms of stores at malls, lack of parking space, and long distances make conventional shopping an inconvenient option for many. Many prefer shopping from the comforts of one’s home. An average working citizen spends at least an hour each day to commute to their place of work. Travelling a similar distance on a day off to go shopping for some clothes is not considered an exciting option. The biggest plus for online portals is convenience.
This further reiterated by a report titled ‘Digital Retail 2020’ by Google and A T Kearney. It points out that, “Online shopping has become a way of life for a number of Indians and the total number of online shoppers is estimated to grow 3.5 times to touch 175 million by 2020, from 50 million in 2015. E-tailing will drive 25 per cent of the total organised retail sales of $240 billion in India by 2020 and will reach $60 billion in gross merchandising value.”
CRUNCHING THE DATA
This report is not the first of its kind. Several marketers and research organisations have been trying to peg a value to online retail. They are also trying to decipher buying patterns of individuals. They are also probing the demographic of the buyer – age group, gender, geographical area, income profile, etc. This report by Google and A T Kearney adds, “Of the 175 million online shoppers in 2020, the top 60 million ‘high-value’
customers will contribute to 68 per cent of total spending. Customers from higher income classes who live in Metros and Tier-I cities are more likely to be high value and will account for a similar share of spending.”
A major component of the finding of this report is that online buyers do not mind paying a premium for the value-added services. These value-added services take the form of faster delivery, hassle-free returns and extended warranty. Nearly 90 per cent of those interviewed were willing to pay for premium value added services. This is a huge number, which shows that online selling is here to stay. Another major finding has been that, “The country will see a growth of five times the current figure for the number of women shoppers, by 2020. They will more than double their share of online spend. They are likely to spend more on lifestyle categories, such as apparel and accessories, and look for the latest trends and brands online. Women respondents said they would increase their spends of online shopping if they get more options for flexible delivery time, more pick-up locations, so that they don’t have to divulge too many personal details.”
A similar report by PayPal and market research firm Ipsos emphasises the same points. The e-commerce revolution is here to stay. The report has estimated that cross-border spending or online spends from domestic and cross border shopping is projected to touch R875,600 crore in 2018. This amounts to around 31 per cent year on year growth in 2017.
More and more internet savvy Indians are shopping from retailers in China, Korea and Malaysia for apparel. These portals have an edge over their Indian counterparts in their ability to offer great deals on prices as well as a trendy selection of clothing. The fashion on these websites observes the latest trends. Naysayers refer to them as ‘inspirations’ of originals or ‘rip offs’, but the quality is pretty decent and their prices are quite affordable.
Aiding this growth is the the low cost of internet, free WiFi facilities and the spike in smart phone usage. The PayPal-Ipsos report has analysed the rationale behind the ‘Preferred modes of payment among online shoppers and growth prospects for the Indian e-commerce sector in 2018.’ It concludes that, with greater online protection, the number of e-shoppers have increased. Seller and buyer protection, refunded returns, and payment gateways like PayPal have helped bring down key barriers of cross border shopping like safety and security, return processes and shipping issues.
The internet is full of websites to source apparel from. Alibaba.com has a separate site for apparel. They are affordable and available in a number of colour and size options. What sets these websites apart is that they present a more stylised and affordable range of apparel. Several items like hooded vests and coats are available in physical outlets, but often the customer needs to go to big malls or wait for sales offered by brand names to buy one suitable to their precise needs. On the other hand, items available online are easily accessible and the hassle-free return policy makes it a cheaper and more convenient source of purchase. Many of these online shipping companies deliver to places in India.
THE KOREAN CONNECT
Apart from China, Korea also seems to be a favourite destination for shoppers. In an article, www.jossbox.com charts the growing popularity of Korean websites offering the best of fashion, saying, “Think young, fresh and trend forward, and Korean fashion flashes to mind faster than you can say ‘street style’. From off-shoulders to sweatshirt dresses and platform sneakers, it’s spot on with nailing the coolest trends, sometimes even before they become worldwide phenomenon. But the best part? It’s super affordable! – quickly satisfying our need for fast fashion.” Examples of such websites include www.hallyumart.com, www.kooding.com, www.onlyurs, brands like Tidestore, Hi Korean Fashion and Yes Style.
A quick flip through any of these websites reveals the quantum of fashion styles available and the vast variety of material used. The prices are given in INR and are not exorbitant. Above all, they are transparent and fair and don’t require any bargaining.
The popular corridors for cross border shopping on websites, as per the Paypal Ipsos survey were: US (14 per cent), Britain (six per cent) and China (five per cent) during the last 12 months. Further, about 55 per cent of Indians shop cross-border more during Christmas, and 53 per cent shop more from other countries for the Diwali festival.
Economic Times has further reported on how luxury items are being bought online by Indians. It says, “A segment of Indian luxury consumers seems to have switched to discounted luxury products on online portals, post demonetisation. Portals such as Confidential Couture and Darveys, which sell discounted luxury products said sales have increased for certain categories and brands.”
The only deterrent to this is the unavailability of the Cash on Delivery option, a payment mode which is the norm on several Indian websites. There is also the minor element of fear of using cards on an international site, as Indian card companies do not authenticate the purchases through an OTP, leading to hacking concerns. Nevertheless, these are minor challenges in the larger picture of exciting new clothes and designs, barring conventional market barriers.