32% of Smart­phone Users do On­line Shop­ping from their De­vice

With many new play­ers mak­ing their de­but in the on­line com­merce and the e-tailing land­scape chang­ing dras­ti­cally where is the web based re­tail head­ing? We an­a­lyze this and many other trends to il­lus­trate the new di­men­sion of e-com­merce...

PCQuest - - VERTICAN FOCUS - — Mast­ufa Ahmed

The e-com­merce in­dus­try has been wit­ness­ing a strong growth in In­dia with sev­eral busi­ness mod­els serv­ing the needs of the grow­ing In­ter­net au­di­ence in the coun­try in re­cent years. E-com­merce and the sub-set re­tail e-com­merce is still in its nascent stage though, the last few years has seen lots of ac­tions with the mush­room­ing of many new play­ers want­ing to make space in the mar­ket. The e-tailing space has wit­nessed a lot of in­no­va­tion re­cently. In one side, peo­ple have got­ten ac­quainted with shop­ping on­line with more and more users plan­ning to shop on­line, many new pay­ment mod­ules have boost up the con­fi­dence of shop­pers to pur­chase goods on­line on the other.

With the rise of In­ter­net in In­dia and more than 121 mil­lion In­ter­net users, sev­eral start-ups have ush­ered their off-line busi­nesses into the e-com­merce ecosys­tem, caus­ing con­cern among bricks and mor­tar es­tab­lish­ment that they are wit­ness­ing the start of their demise. There’s been a rad­i­cal shift in mind­sets as many en­trepreneurs/ SMEs have been pro­gres­sively us­ing e-com­merce as an in­te­gral part of their busi­ness model. This new class of en­trepreneurs bet­ter coined as ‘Ne­trepreneurs’ have taken In­dia by storm.

The e-tailing in­dus­try grew by 47% in 2011 to reach ` 46,520 crore ac­cord­ing to a re­port by IAMAI. The mar­ket size of on­line re­tail in In­dia is likely to touch ` 7,000 crore by 2015 ow­ing to in­creas­ing In­ter­net pen­e­tra­tion ac­cord­ing to As­so­ci­ated Cham­bers of Com­merce and In­dus­try of In­dia (AS­SOCHAM).

There are many in­ter­est­ing trends that are do­ing round in e-com­merce busi­ness to­day. More than four in ten In­di­ans are more likely to share (post a re­view/ Tweet/ re­view) a neg­a­tive prod­uct or ser­vice ex­pe­ri­ence on­line than they were to share a pos­i­tive ex­pe­ri­ence.

Con­sumer and shop­per con­fi­dence is on the rise and it seems to be helped in part by the con­ve­nience and se­cu­rity of­fered by CoD, says Vi­jay Singh, CEO, AaaramShop.com. We also see that re­al­ism is start­ing to seep-in within the play­ers and the ini­tial eu­pho­ria is been re­placed by cau­tious op­ti­mism – which is great for the in­dus­try as a whole, adds Vi­jay.

The In­dian con­sumers are rapidly grow­ing in terms of en­gage­ment and know-how of e-com­merce web­sites. It’s been a steady process and rise since the be­gin­ning of ecom­merce com­pa­nies in In­dia. In­dian con­sumers were ap­pre­hen­sive of do­ing fi­nan­cial transactions on­line and that

is fast chang­ing with pay­ment F re­turn op­tions that build cus­tomer con­fi­dence and trust, says Man­mo­han Agar­wal, CEO, Yebhi.com.

8 of 10 In­dian on­line con­sumers to shop on­line

The num­ber of In­ter­net users grow­ing to 49 mil­lion – 40 mil­lion ur­ban, 9 mil­lion ru­ral (Source: Light­speed). More than eight out of ten In­dian on­line con­sumers plan to shop on­line in the next twelve months and more than four in ten In­di­ans are more likely to share (post a re­view/ Tweet/ re­view) a neg­a­tive prod­uct or ser­vice ex­pe­ri­ence on­line than they were to share a pos­i­tive ex­pe­ri­ence, says a re­port. One en­abler of this surge is the in­creas­ing use of so­cial me­dia like Face­book and Twit­ter which make it eas­ier for users to com­ment on prod­uct they buy and look for re­views their peers post on­line.

More prod­uct line­ups adding to on­line shelf

There is enough per­spec­tive out in the open about hor­i­zon­tal play­ers vis-a-vis ver­ti­cal e-com­merce. Each has their own USPs from a con­sumer per­spec­tive. From hard goods to soft goods, we are now see­ing the emer­gence of cat­e­gories that didn’t yet carve their niche in the cus­tomer mind­set on­line. Over­all, the fact that green­field cat­e­gories are be­ing at­tempted, are tes­ta­ment to the be­lief in e-com­merce as a chan­nel of busi­ness. A lot more adoption is com­ing along, with con­sumers be­ing bene­fac­tors of larger va­ri­ety, price offs, doorstep con­ve­nience, eas­ier re­turns, etc com­ing into play that are all en­ablers to this chan­nel of busi­ness.

Cash on De­liv­ery is here to stay

CoD now ac­counts for 50-60 per­cent of or­ders for most e-com­merce com­pa­nies in In­dia. While B2C e-com­merce has sev­eral play­ers jump­ing in to cap­i­tal­ize on the grow­ing con­sumer driven de­mands, this growth has also been mir­rored in the B2B e-com­merce space. Cash on De­liv­ery as a pay­ment model is here to stay and con­sumers have to get com­fort­able with it. About 50 – 60% of Myn­tra’s busi­ness is via CoD, says its Ashutosh Lawa­nia, Co-Founder. The Cash on de­liv­ery pay­ment op­tion is avail­able on all the items in many lead­ing e-tail­ers like Flip­kart, etc. CoD pro­vides ease of buy­ing a prod­uct on­line for cus­tomers es­pe­cially in Tier2 F 3 cities. How­ever, it has a catch. Many users find CoD more cum­ber­some than pre­paid or­ders (via credit or debit card) be­cause some­one has to be phys­i­cally present at the time of de­liv­ery with cash.

Shop­ping with smart­phones is on the surge

Mo­bile de­vices are fast be­com­ing the pre­ferred method of ac­cess­ing the web. 81% of smart­phone users ac­cess the In­ter­net on their mo­bile de­vices and 32 per­cent of smart­phone users in In­dia use their de­vices to make pur­chases, ac­cord­ing to a study by com­mu­ni­ca­tion agency Havas Me­dia’s mo­bile mar­ket­ing net­work Mobext In­dia, sam­pled over 2,800 re­spon­dents in the coun­try. To­day’s con­sumers rely on their smart­phones to en­gage with brands and make pur­chases. So, smart­phones and tablets are turn­ing out to be the lo­cal search and shop­ping de­vices in­creas­ingly be­ing used by tech savvy users to­day. Ac­cord­ing to a re­port by Mash­able, vis­its to e-com­merce web­sites from smart­phones have dou­bled in just one year.

74% of smart­phone shop­pers make a pur­chase as a re­sult of us­ing their smart­phones to help with shop­ping, and 88% of those who look for lo­cal in­for­ma­tion on their smart­phones take ac­tion within a day, says a re­port by Google.

So­cial me­dia is be­ing used in­creas­ingly by e-tail­ers to catch up with cus­tomers

So­cial me­dia has been the best tool for e-com­merce com­pa­nies to in­ter­act and en­gage with their cus­tomer base. The so­cial net­work also plays a greater role in de­vel­op­ing a rec­om­men­da­tion engine (cus­tomers are able to cus­tom­ize prod­uct rec­om­men­da­tion based on their likes and pref­er­ences) and are able to shop for a look or prod­uct they find on­line.

‘Con­tests, re­views etc help en­sure we are part of con­sumer so­cial chats,’ says Man­mo­han Agar­wal, CEO, Yebhi.com. ‘We also use so­cial me­dia as a tool to lis­ten to our con­sumers - their ap­pre­ci­a­tion, their griev­ances etc. We be­lieve it’s a 2 way com­mu­ni­ca­tion chan­nel not just a means for us to broad­cast our lat­est prod­ucts and sales,’ adds Agar­wal.

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