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    Home»Top Stories»Online Shopper Base In India To Reach 100 Million By 2016
    Top Stories

    Online Shopper Base In India To Reach 100 Million By 2016

    MOBILITY INDIABy MOBILITY INDIAFebruary 19, 2015No Comments5 Mins Read
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    Consumer confidence to shop online on the rise, e-tailing market to reach $15 bln by 2016
    50 mln new buyers to come from Tier 1 and Tier 2 cities
    Women buyers drive growth, outspend men by 2x in Tier 1 cities

    Consumer confidence to shop online will continue to rise and India will have 100 million online shoppers by 2016. This was revealed by Google in its annual online shopping growth trends report compiled by combining an extensive research conducted by Forrester Consulting and Google search trends. The report revealed that India’s e-tailing market is at an inflection point and will see rapid growth to become a $15 bln market by 2016.

    The research conducted by Forrester Consulting by interviewing 6859 respondents covering both online buyers and non-buyers in 50 cities/towns, revealed  that online shoppers base will grow 3x by 2016, and over 50 million new buyers will come from Tier 1 and Tier 2 cities. The confidence to shop online was on the rise as 71% non-buyers from Tier 1 and 2 cities said they plan to shop online in the next 12 months. The findings also revealed that women buyers in Tier 1 cities were more engaged in online shopping, and outspend men by 2x. Women were also responsible for driving growth in categories like apparels, beauty & skincare, home furnishing, baby products and jewelry. This research finding was consistent with search query trends seen on Google with search query volume for apparels growing at 64% (YoY), baby care 53% (YoY), beauty & personal care 52% (YoY) and home furnishing 49% (YoY).

    Looking at the growth trends of the above mentioned categories, the report also projected that 40 million women are estimated to shop online in India by 2016. 2/3rd of online shoppers highlighted Convenience and Variety as major reasons to shop online in addition to discounts. Over 60% respondents also felt that buying online was directly correlated to social status. Mobile phone emerged as an important access device for online shoppers with 1 out of 3 online buyers transacting on their mobile phones in Tier 1 and Tier 2 cities. In Tier 3 cities, 1 in 2 buyers said they use mobile phones to purchase products online. This was also reflected in Google search trends with queries via mobile phones growing 3x in the last three years. Today, over 50% of shopping queries are coming from mobile phones; this share was as low as 24%  two years back.

    Speaking at the launch of the report, Nitin Bawankule, Industry Director for Ecommerce, Local and classifieds, Google India, said, “The consumer confidence to shop online has grown significantly during last year and a half, and our objective was to understand the factors that are driving this growth and arrive at indicators that will help propel the Industry forward. As the report indicates, behavior of Indian online buyer is fast mirroring buyers in more developed markets as more subjective product categories have started to see significant growth. The e-tailing Industry needs to act now to cater to this strong user growth trend. Improved customer experience across all touch points, easy-to-use mobile apps can create a strong pull for non-buyers to shop online in Tier 1 and 2 cities. Women buyers are set to become the most significant contributors to the growth of online shopping and there is a huge opportunity waiting to be unlocked in this user segment.”

    Amongst the challenges, 62% buyers said they were not satisfied with their online shopping experience. 67% buyers also highlighted that the current return process was too complicated and expensive. Trust was a major issue with non-buyers, 55% non-buyers did not trust the quality of products sold online, 63% said they were concerned about the safety of transacting online and 65% said, they don’t feel comfortable sharing personally identifiable information online. 66% of total respondents said that poor connectivity was also a major barrier for them to shop online.

    Photo caption 2: L-R- Nitin Bawankule, Industry expert , Google India and Rajan Anandan, MD, Google India at the launch of Google online shopping growth trends report 2014

    In 2016 over 40M shoppers will be Women
    While more men purchase online (67% vs 62% in Tier 1), women are an extremely exciting segment for E-Commerce as the stickiness levels are much higher when compared to men in terms of spending, frequency, etc.

    Mobile:
    Mobile is being used across the board and is driving a multitude of online shopping behavior in terms of research for products, browsing for products and now even conversion.
    Over a third of Indians use mobile devices to research and review products online and one in four purchases online happen through a mobile device
    Bullet points on screen
    Women and Mobiles will propel the online shopping buyer base to 100m buyers who collectively will grow the e-Commerce industry as a whole to $10BN by early 2016

    Trust
    There is over a 20% difference in favorable response rate between buyers and non-buyers when it comes to trust-related issues. Perception and Trust need to be managed better by the e-commerce players

    Security concerns continue to hold back e-commerce in India: improving perception of credit card security will drive both new buyer and existing buyer growth by 56% across tiers.

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