ecommerce

After the social media revolution, is e-commerce the next big thing in India? Recent reports indicate so. Online retailers have registered an average 18 per cent growth this year, but are they prepared to handle the influx of online shoppers? The year 2012 may come as a year of surprises to cynics of the industry who believe that online shopping cannot become an Indian reality. The argument that is often given is that buying behaviour of Indian consumers is non-virtual. The first report that showed data contrary to this argument was the Internet data released by IMRB and IAMAI. The report claimed that the number of Internet users has touched the 100-million mark and is likely to grow exponentially. The number of active Internet users has reached inflection point. But has this growth also translated into growth of online shoppers? Latest figures say so. A recent pan-India report released by comScore Inc reveals that online shopping in India has touched a growth rate of 18 per cent and is only likely to grow further. The report found that nearly 60 per cent of netizens in India visited a retail site in November 2011, with the number of online shoppers increasing by 18 per cent in the past year. “To take advantage of this growing opportunity, retailers must ensure they are addressing the needs of potential customers, which include attractive pricing and the convenience of ordering online. The rapid growth of online coupon sites suggests that consumers in India are looking for deals, highlighting the need for online retailers to adopt effective marketing and pricing strategies for their goods,” remarked Kedar Gavane, Director- India, comScore. Online shopping initiatives are increasingly luring working professionals, women and children. What has added most to online shopping is household appliances and apparel goods. The data of online shoppers here does not take into account the users of mobile phones and public computers who bought products from mobile shopping applications or public computers. Therefore, actual e-commerce figures are likely to be higher. As more comprehensive digital data measurement techniques evolve, such studies are expected to shed light on the consumption pattern of online shoppers. Segments that recorded growth Online channels are playing an important role of connecting with consumers of unexplored markets. The journey of online spending that started with an increasing number of buyers of travel and holiday plans in the last decade has now extended to an increase in spends on household appliances and luxury products. While segments like apparel and luxury products have registered unprecedented growth in 2011, jewellery, electronic appliances and hardware products have shown promising growth trends as well. “Indian consumers are showing greater appetite to transact online, fuelling the e-commerce boom,” said Anuj Kumar, CEO, Affle. The report also found that coupon sites are rapidly gaining popularity, with 16.5 per cent of the Indian online population visiting the category in November 2011 – 27.2 million online users in India aged 15 and older accessed the retail category from a home or work computer, an increase of 18 per cent from the previous year, as consumers continue to turn to the web to shop for and purchase items and retailers continue to increase their online visibility through active marketing campaigns. Increase in shoppers of the coupon sites indicate that pricing is playing the role of catalyst in bringing more and more shoppers online. Many of these shoppers have shown affinity towards affordable online goods, which was priced lesser than the market price. Some of the largest retail subcategories revealed that coupons category was the largest with 7.6 million visitors as consumers rapidly adopt daily deal sites. Consumer electronics ranked next with 7.1 million visitors, growing at 12 per cent over the previous year, while 5.8 million online users visited comparison shopping sites, an increase of 25 per cent from the previous year. Challenges ahead However, this growth story is not devoid of challenges that the industry is confronted with, both global and local. As more global players enter the e-commerce space, lack of common taxation rules can also hinder growth in future. “In the online shopping industry, especially, the need of the hour is a uniform goods and services tax (GST) across the country. Currently, inter-state movements of products often pose a problem, given the different taxation rates. This would need to be resolved in order to extend the reach and improve the e-commerce experience,” stressed Sachin Bansal, Co-founder and CEO, Flipkart. On the local front, online shopping predominantly remains a practice of urban and middle class consumers. Though consumers in small towns have started using Internet actively, conversion from visitors to shoppers would take some time. Then there is logistical and supply constraint for retailers. While online shopping is expected to find some share in smaller Indian towns too, increasing supply of products and lack of logistics like warehouses can be a challenge for retailers. What experts have to say Sachin Bansal, Co-Founder and CEO, Flipkart: “One of the bigger challenges being faced by the online shopping industry is a fragmented back-end. Greater attention from the government and private entities, more investment and the entry of serious players would be needed to create a better structure for payments and logistical infrastructure.” Gulshan Verma, Vice President and Country Head, Ad Network, Komli Media, India and USA: “2011 is the year that retail -ecommerce finally came of age in India with customers from all over India buying in multiple categories from fashion, books and gadgets to infant products. There have even been instances of young adults getting themselves a credit card to primarily shop online.” Anurag Gupta, Managing Director, DGM India Internet Marketing Pvt Ltd: “Indian e-shoppers will have a good time getting great deals and services online, online retailing will explode in 2012 and beyond. More users will access the Internet through smart phones, tablets, net books, etc. With this, there will also be an explosion in usage of mobile applications.”

Deal Sites Continue to Surge in Popularity Reaching 16.5 Percent of India’s Online Population comScore, Inc., a leader in measuring the digital world, today released a report on visitation to the top Retail and Coupon sites in India based on data from its comScore Media Metrix service. The report found that nearly 60 percent of online users in India visited a Retail site in November 2011, with the number of online shoppers increasing 18 percent in the past year. The report also found that Coupon sites are rapidly gaining in popularity, with 16.5 percent of the Indian online population visiting the category in November, led by Snapdeal.com and Mydala.com. “The online channel is playing an increasingly important role in connecting retailers with potential customers in India,” said Kedar Gavane, comScore director for India. “To take advantage of this growing opportunity, retailers must ensure they are addressing the needs of potential customers, which include attractive pricing and the convenience of ordering online. The rapid growth of online coupon sites suggests that consumers in India are looking for deals, highlighting the need for online retailers to adopt effective marketing and pricing strategies for their goods.” Number of Online Shoppers Climbs 18 Percent in the Past Year In November 2011, 27.2 million online users in India age 15 and older accessed the Retail category from a home or work computer, an increase of 18 percent from the previous year, as consumers continue to turn to the web to shop for and purchase items and retailers continue to increase their online visibility through active marketing campaigns. Analysis of some of the largest Retail subcategories revealed that Coupons was the largest with 7.6 million visitors, an increase of 629 percent from the previous year as consumers rapidly adopt daily deal sites. Consumer Electronics ranked next with 7.1 million visitors growing 12 percent from the previous year, while 5.8 million online users visited Comparison Shopping sites, an increase of 25 percent from the previous year. Top Retail Subcategories by Total Unique Visitors (000) November 2011 vs. November 2010 Total India – Visitors Age 15+ Home/Work Locations Source: comScore Media Metrix Total Unique Visitors (000) Nov-2010 Nov-2011 % Change Total Internet : Total Audience 41,169 46,390 13 Retail 23,021 27,171 18 Coupons 1,048 7,647 629 Consumer Electronics 6,334 7,122 12 Comparison Shopping 4,611 5,775 25 Computer Hardware 5,079 5,708 12 Apparel 1,735 4,609 166 Movies 2,587 3,076 19 Books 2,559 2,494 -3 Flowers/Gifts/Greetings 2,132 2,323 9 Jewelry/Luxury Goods/Accessories 1,575 2,134 36 Home 1,605 1,966 22 Amazon and Apple Top List of Retail Sites Amazon Sites led as the top retail destination in India reaching 6.8 million visitors, representing 14.7 percent of the online population. Apple.com Worldwide Sites saw its audience reach 3.4 million visitors, followed by Samsung Group with nearly 2.8 million visitors. Other top retail destinations included Flipkart.com (2.7 million visitors), HomeShop18.com (2.3 million visitors) and Naaptol.com (2.1 million visitors). Top 10 Retail Sites by Unique Visitors (000) November 2011 Total India – Visitors Age 15+ Home/Work Locations Source: comScore Media Metrix Total Unique Visitors (000) % Reach Total Internet : Total Audience 46,390 100.0% Retail 27,171 58.6% Amazon Sites 6,805 14.7% Apple.com Worldwide Sites 3,426 7.4% Samsung Group 2,759 5.9% Flipkart.com 2,675 5.8% Homeshop18.com 2,286 4.9% Naaptol.com 2,145 4.6% Bookmyshow.com 2,125 4.6% Myntra.com 2,110 4.5% Priceindia.in 2,047 4.4% Alibaba.com Corporation 1,973 4.3% *Excludes visits from public computers such as Internet cafes or access from mobile phones or PDAs Snapdeal.com and Mydala.com Lead the Coupons Category In November 2011, 7.6 million Indians visited Coupon sites, representing 16.5 percent of Internet users in the market. Snapdeal.com led the category with 5.2 million visitors, followed by Mydala.com with 1.4 million visitors and Crazeal.com with nearly 1 million visitors. Top 10 Coupon Sites by Total Unique Visitors (000) November 2011 Total India – Visitors Age 15+ Home/Work Locations Source: comScore Media Metrix Total Unique Visitors (000) % Reach Total Internet : Total Audience 46,390 100.0% Coupons 7,647 16.5% Snapdeal.com 5,185 11.2% Mydala.com 1,359 2.9% Crazeal.com 989 2.1% Dealsandyou.com 664 1.4% Koovs.com 491 1.1% Khojguru.com 239 0.5% Coupondunia.in 117 0.3% Sosasta.com 91 0.2% Deals2buy.com 86 0.2% Retailmenot.com 83 0.2% *Excludes visits from public computers such as Internet cafes or access from mobile phones or PDAs A list of Online/eCommerce Shopping Sites in India can be found here .