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...
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 We also see that realism is starting to seep-in within the players and the initial euphoria is been replaced by cautious optimism – which is great for the industry as a whole, adds Vijay.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.