Online shopping may make malls a retail wasteland: Study

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SME Times News Bureau | 02 Aug, 2014
There is a record rise in online shopping with available deals online than in brick and mortar, advantage of free shipping, eliminating crowding with a "click" option, reveals the Associated Chamber of Commerce and Industry of India (ASSOCHAM) recent paper.

"The challenges of worsening automotive traffic, rising fuel prices and the increased difficulty of time management in modern families have made going to the mall a planned activity which nobody has as much time for anymore," said D S Rawat, Secretary General ASSOCHAM while releasing the paper.

The reasons for online shoppers number multiplying are because of factors such as home delivery which saves time, secondly '24x7' hours shopping with ease and availability factors for product comparisons.

As per the ASSOCHAM recent findings, Delhiites (67 percent) have left behind all other cities in India shopping online. While Mumbaikars (60 percent) ranks second, Ahemdabad (52 percent) ranks third and Bangalore (50 percent) ranks fourth in their preference for online shopping in the survey, for which around 3,500 shoppers in Delhi, Mumbai, Chennai, Bangalore, Lucknow, Ahemdabad, Kolkata, Dehradun among other cities were interviewed.

ASSOCHAM paper further highlighted, in India roughly 20-25 percent of their total sales are being generated by mobile devices and tablets, increased by 10-15 percent than the last year and also likely to continue upwards.

Rawat said, India's e-commerce market was worth about USD 2.5 billion in 2009, it went up to USD 6.3 billion in 2011 and to USD 16 billion in 2013 and is expected to touch whopping USD 56 billion by 2023 which will be 6.5 percent of the total retail market.

Nearly 76 percent of the respondents said, "It is much easier from the comfort of your own desk or even from your smartphone or tablet to type out a search phrase and click "buy" than have to undergo a mall excursion.

As per the survey, majority of the respondents are working and shopping at the same time between 12 noon and 4 pm on a working day. More than half the sales of web-stores come on Tuesdays, Wednesdays and Thursdays and dips on weekends, when buyers head to brick-and-mortar stores in malls instead. Besides, weekdays are busy for shopping online, while weekend traffic drops by 10-12 percent, particularly on long weekends like this one, adds the survey.

Nearly 55 percent respondents said, they ordered around lunch time and during office closing hours. "People are done with the day's work and use the last hour to browse and buy from shopping sites, while on weekends, sales in retail outlets are higher", points out the survey.

Most e-commerce companies are targeting 40 percent revenue from mobile sales in 2015. There is no denying that Indian e-commerce market is growing well as proved by the investments announced over the past two days, said Rawat.

As per the survey 67 percent of Delhiites prefer shopping online while 23 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 7 percent of respondents said they prefer to visit a mall for their shopping needs while 3 percent said they prefer shopping at specialty stores, the survey stated.

Likewise, Mumbaikars share was 55-60 percent in the last year, which might go up another 60-65 percent in 2014-15. Online music sales and movies are the highest e-sale in the Kolkata. Similarly, Ahemdabad share is 50-52 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 2013-14 will touch the 50-55 percent in 2014-15.

Among the above age segments, 18-25 years of age group has been the fastest growing age segment online with user growth being contributed by both male and female segments. The top 5 popular categories accessed online are social networking, online portals, search, entertainment and news sites, adds the ASSOCHAM paper.

The survey highlights 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. 65 percent of Online Shoppers are male as against 35 percent female.

Most products bought & sold off through online comprise electronic gadgets (58 percent), books (42 percent), gift articles (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.

Besides electronics gadgets, categories like apparel and jewellery, home and kitchen appliances, lifestyle accessories like watches, books, beauty products and perfumes, baby products have witnessed a significant upward movement in last one year, adds the paper.

Having close to 15 percent of internet penetration in India throws a very big opportunity for online retailers to grow and expand as future of internet seems very bright. Getting new users, more sales and making "million dollars story is not limited to US now", added Rawat while releasing the paper.

Rawat 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," adds the survey.

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