Online shopping records 100 pc annual growth: ASSOCHAM

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SME Times News Bureau | 17 Aug, 2013
With more than 100 million internet users, India has registered a a phenomenal 100 percent annual growth in online shopping, reveals the Associated Chambers of Commerce and Industry of India (ASSOCHAM) latest survey.

"With more India's online shopping registering a phenomenal 100 percent annual growth, many retail chains and consumer durable companies are joining the Web bandwagon to tap the e-shopping market,"said D S Rawat, Secretary General ASSOCHAM while releasing ASSOCHAM survey on Thursday.

The online shopping industry in India is fast catching on, not just in the larger metros but also in the smaller cities. At present the market is estimated at Rs 52,000 crore and is growing at 100 percent per year, adds the paper.

Shopping trends of Indian consumers have also witnessed a significant change this Raksha Bandhan, leading to a record 65 percent rise in online trends over the regular shopping compared to last year, adds the ASSOCHAM paper.

"This festive season, there is a 65 percent more traffic on online retail websites and shopping on ground has taken a back seat. Apart from convenience, rising fuel price, security reasons, online discounts and availability with abundance of choice keeping them indoors," Rawat added.

Delhiites have left behind all other cities in India shopping online. While Mumbaikars ranks second, Ahmedabad ranks third in their preference for online shopping in the survey, for which around 5,000 shoppers in Delhi, Mumbai, Chennai, Bangalore, Ahemdabad, Kolkata among other cities were interviewed.

As per the survey 62 percent of Delhiites prefer shopping online while 30 percent prefer to shop in traditional markets like Sarojini Nagar, Lajpat Nagar, Karol Bagh, Janpath, Paharganj, Sadar Bazar and Chandni Chowk, said the survey.

Around 6 percent of respondents said they prefer to visit a mall for their shopping needs while 2 percent said they prefer shopping at specialty stores, the survey stated.

In other cities like Chennai, 30 percent of its population chose to buy daily routine products through e-shopping in 2012-13, which will go to 40-45 percent in current fiscal for gift articles, magazines, home tools, toys, jewelry, beauty products & sporting goods categories.

Likewise, Kolkata share was 15-20 percent in the last year, which might go up another 25-30 percent in 2013-14. Online music sales and movies are the highest e-sale in the Kolkata. Similarly, Bangalore share is 20-25 percent for books, electronic gadgets, accessories, apparel, gifts, computer peripherals, movies, hotel booking, home appliances, movie tickets, health & fitness products and apparel gift certificates in 2012-13 will touch the 45-50 percent in 2013-14.

Non-resident Indians (NRIs) are more actively shopping online during the festive season. During Raksha Bandhan, online shopping by NRIs contributes 60-70 percent of total shopping, whereas during Diwali, it increases to 90 percent, adds the paper.

The survey further reveals that 35 percent of regular shoppers are in 18-25 age group, 55 percent in 26-35, 8 percent in 36-45 and 2 percent in the age group of 45-60. 85 percent of Online Shoppers are male as against 15 percent female.

Majority of the working respondents said, "Online retail industry’s business is quite good. Heading out to shop on day off by battling traffic, parking issues, and long lines for bill payment is quite a cumbersome process and this is the main reason for the shift in trend."

This business module is cost effective, easily accessible and profitable in many functional areas. Consumers and retailers both desire safe, simple and comprehensive online shopping that will truly realize the range of power of the Internet, adds the ASSOCHAM survey.

According to the survey, India has more than 100 million Internet users, out of which around half opt for online purchases and the number is growing every year. With such a large market size, companies, right from retail shops to consumer goods, are entering the Web space to attract potential customers, adds the survey.

"In India, customers wait for the festive season to get the best deals on all their shopping needs. The idea is to provide customers with an unmatched shopping experience ahead of the festive season with a fabulous range of products at unbeatable prices," commented Rawat.

He further said, "Customer behaviour is changing dramatically. People are not only using the Web to book air tickets and movie tickets but also do not hesitate in placing orders for mobiles, laptops and other consumer electronics and home appliances."

Seeing this bold consumer behavior, more companies are collaborating with such daily deal and discount sites. Even traditional retailers like Shoppers Stop, Westside and Pantaloons are looking at the online shopping space for growth, adds Rawat.

The products that are sold most are in the tech and fashion category, which include mobile phones, ipad and accessories, MP3 players, digital cameras and jewellery, among others.

These clearly show that online shopping has truly come of age and consumers are keen to shop on the net. Festival shopping is the prime time for multi-channel retailers to attract new shoppers, adds the survey.

The reasons for e-shoppers number multiplying are because of factors such as home delivery which saves time, secondly '24×7' hours shopping with ease and availability factors for product comparisons.

Online shopping is definitely catching up. Emerging gifting trends also include imported wines and juices. Chocolates are picking up in a big way as a substitute to mithais. This trend extensively points towards luxury shopping, an emerging concept in the Indian market. The online shopping boom is not restricted to metros alone. Lucknow ranks high, followed by Jaipur, Dehradun, Nasik, and Trichy.

Most products bought & sold off through online comprise Gift articles (58 percent), books (42 percent), electronic gadgets (41 percent), railway tickets (39 percent), accessories apparel (36 percent), apparel (36 percent), computer and peripherals (33 percent), airline tickets (29 percent), music (24 percent), movies tickets (26 percent), hotel rooms (20 percent), magazine (19 percent), home tools and products (16 percent), home appliances (16 percent), toys (16 percent), jewelry (15 percent), beauty products (12 percent), health and fitness products (12 percent), apparel gift certificates( 10 percent) and sporting goods (7 percent), adds the survey.

Of those who are averse to shopping online cited various reasons like prefer to research products and services online and then actually buy them from a store (30 per cent), find delivery costs too high (20 per cent), don’t want to share personal financial information online (25 per cent), lack of trust on whether products would be delivered in good condition (15 per cent), don’t have a credit/ debit card (10 per cent).

Top reasons given by shoppers in buying through Internet:

- Safety Reasons
- Saves time and efforts
- Convenience of shopping at home
- Wide variety / range of products are available
- Good discounts / lower prices
- Get detailed information of the product
- You can compare various models / brands
- An insight into some of the problems stated by customers

While buying through Internet:

- Not sure of product quality
- Cannot bargain/Negotiate
- Not sure of security of transactions /Credit card misuse
- Need to touch and feel the product
- Significant discounts are not there
- Have to wait for delivery