56% Of Online Shoppers In India Spent Rs. 5000 Or More During The Recent Festive Season [STUDY]

Fuelled by an ever expanding internet base, increasing popularity of purchasing online and the mushrooming e-commerce sites, online retailing in the country has never been as hot as now.

The findings of a study conducted by a leading Indian coupons site show that though not many online shoppers are ‘experienced’ enough, there has been an improvement in the level of trust reposed by the average Indian online buyer in the online shopping portals. The number of people making online purchases has increased, as has the average amount spent by them.

Overall, the three major eCommerce players in India (Flipkart, Amazon and Snapdeal) are running into huge losses at the moment but the festive season has brought them some cheer, and helped put a smile on their face- howsoever faint and subdued.

The huge fiascos over the over-hyped festive bonanzas notwithstanding!

The Indian online retail market which was estimated to grow at a rate of 70% and touch a $6 billion sales figure by 2016 by Gartner earlier in the year may actually grow much faster and become a $15 billion (Rs 93,172 crore) market say the latest figures released by none other than Google itself.

“The online shopper base will grow 3X by 2016 and over 50 million new buyers will come from tier I and II cities. The confidence to shop online is on the rise as 71 percent non-buyers (respondents) from tier I and II cities said they plan to shop online in the next 12 months,” Google India Managing Director Rajan Anandan told reporters in New Delhi.

One of the leading Indian coupons sites, Couponrani.com, also made an effort to delve into the online buyers’ mind and know more about what eggs them on to purchase online by analyzing their buying behavior over the festive season which, in India, is around Diwali.

• Not Many Online Shoppers are ‘Experienced’: Though a larger number of people are now buying online, only a very small percentage of them are aware of coupons. The site owners classified these 10-15% of online shoppers who knew about coupons as ‘experienced online shoppers.’

• Discounts Are the Biggest Driving Factor: An overwhelmingly large majority of respondents (92%) were of the opinion that they could get better deals or bargains online, as compared to those offered by the brick and mortar stores.

• Increased Level of Trust: In spite of some major goof-ups by the leading Indian retailer Flipkart had online buyers complaining and protesting vehemently against the poor set-up and technical support, they did not believe that online sellers offer discounts to their buyers after marking up the prices on their sites. 62% of those questioned believed that the MRP show against the products on various online sites was correct. This should be a major shot in the arm for the Indian eCommerce industry which is just beginning to make its presence felt globally.

• Increased Level of Spending: CouponsRani also saw an increase in the amount people spent on online purchases during festival seasons. While 23% of the respondents said they had spent over Rs 5,000, 34% of them admitted that they have spent in excess of Rs 10,000. So not only is the number of online shoppers increasing, the amount spent by average shoppers has also registered an increase.

• Electronics and Apparel Take the Cake: The two most popular categories with online shoppers during the festive season were electronics and apparels, in that order. That is in sharp contrast from the holiday spending observed over the Black Friday and Cyber Monday in the U.S. Toys and games were the most popular category over Amazon, the largest online retailing site, followed by cameras and photo.

• Flipkart, The Winner, Takes it All: True to the cliché that in India the winner takes it all, Flipkart was the most favoured online shopping site for 74% of the respondents, followed by Amazon (47%) and the fashion brand Myntra (34%) coming third.

• Men Outnumber Women, in Smaller Cities:  Though females are often scoffed at by their male counterparts for not being able to resist ‘deals’ and ‘discounts’, they seemed to switch positions when it came to online buying. Only 21% of the online buyers were females while 79% were men.

• More Than Half the Sales Come from Buyers Less than 25 Years of Age: The youth, in keeping with the global trend, was seen to be the biggest online spenders. Only 7% of the online buyers were seen to be more than 41 years of age or above.

Takeaway

• The average Indian buyer cannot be taken for a ride anymore and often compares prices before making the final purchases- whether online or offline. Marking up the printed prices for making some quick bucks is no longer an option for those who want to stick around in the market for a long time.
• Though men outnumber women at this point of time, the fairer sex is taking on to online shopping at a faster rate. Since fashion, apparel, furnishings and accessories have always been high on their priority lists while shopping online, there is tremendous scope for expansion in these categories. Of the 100 million online buyers in 2016, 40 million are expected to be women. Which means that women from Tier II cities will take on to online spending in a big way in the coming two years, since the women buyers in Tier I cities already spend more than double their male counterparts even now.
• Since nothing seduces the Indian buyers more than discounts, the ones offering goods and services at lowest prices will undoubtedly have an edge. While big players like Amazon which counter some of the losses from the sales of their physical products with the huge profits they make with the sale of digital products (especially in the home markets) might continue selling goods even at losses in a bid to capture the markets, small time e-retailers will be badly hit. And might not be able to survive for too long.
• Electronics and gadgets being the most hot-selling category in the Indian online space augurs well for new Chinese entrants like Xiaomi and Huawei which sell their merchandise online exclusively. That should not be taken to mean that what works for the Chinese siblings will work for everyone else too. Google did try to emulate their business model by launching their Android One range online only, a move that has proved to be one of the biggest marketing disasters by the tech giant in the recent past. Not only did the products evoke little online response, but they also incurred the wrath of major Indian retailers which later refused to sell the Android One phones over their counters.
• Spending over the festive season, though on its way up, does not compare to the more evolved western markets. Amazon alone sold 5.5 million items over the Black Friday, with 64 sales being made every single second!! The Indian markets will still take a long time to get to that level in terms of volume and the variety of products offered for sale. The site owners had to employ robots called Kiva to cope up with the shopping frenzy. Compare that with the pathetic performance of our portals which only helped highlight some of the most glaring challenges which the online retailers need to address.