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Next financial year, Indians are expected to shell out more than
Rs 2,000 crore in shopping over the net
What, buy
online through credit cards? Are you out of your mind, do you want me to go
bankrupt? Okay, I can experiment with online shopping, but not for clothes. I
don't buy clothes without trying them on first...
These remarks are
rapidly disappearing. People are slowly getting comfortable about punching in
credit card numbers online or paying through bank accounts directly. They seem
to be getting around to the idea of a 24x7 shop, as they now know that the stuff
they buy online, does reach them. Some even like the freedom to compare products
at their own pace than being hustled by salesmen. No wonder we seem to have
spent Rs 570 crore in 2004-05, and will end up spending another Rs 1,180 crore
by 2005-06, according to Internet and Mobile Association of India's (IAMAI)
e-Commerce Report, 2005. A
forthcoming IDC survey tentatively estimates a 60% CAGR and market size of Rs
1,700 crore in 2006.
In comparison,
Americans spent a whopping amount of $25 bn alone in the first seven weeks of
the holiday season of 2005. Most of this is the result of their large numbers
online-200 mn compared to our 39 mn.
Going by what Americans
have spent in the holiday season, according to the Holiday eSpending Report
(jointly released by Goldman Sachs, Neilsen/NetRatings, and Harris Interactive),
apparel worth $4.7 bn was bought over the Net. Then followed $3.7 bn worth of
computer hardware and peripherals, and a similar figure for consumer
electronics. Books came fourth with $2.6 bn, though in the non-holiday season
books are the most bought products.
What do Indians shop
for the most? Books, electronic gadgets, railway tickets, and apparel-in that
order. According to the IAMAI report, about 38% of Indian shoppers (the base of
the survey was 1,716 online shoppers) have spent between Rs 1,000-5,000 in six
months of 2004-2005; 16% said they had shopped for more than Rs 10,000.
IDC sees the key growth drivers as e-travel, e-recruitment, and
e-purchase of consumer electronics. And
it believes that with greater and faster access, more trustworthy suppliers, and
growing use of credit cards this trend is headed only one way-up.
| People seem to be getting around
to the idea of a 24x7 shop, as they now know that the stuff they buy
online does actually reach them |
How many people are
happy with their online shopping experience? Most are, in India as well as the
US. But here's a statement that holds a lesson for Indian e-retailers or e-tailers:
Close to 50% of online shoppers in the US said they were 'very satisfied'
with their shopping experience. However, in the IAMAI report, only 18% Indians
said they were 'highly satisfied' with theirs. If the number of highly
satisfied customers in India can be brought up, that will surely reflect in the
overall sales as well.
There are a number of
enablers that need strengthening. Online shoppers need plenty more-they need
to know if the product is available, at what price or in what deals, when will
it be shipped, how much will be the shipping cost, etc. They want all this
information available on the site at the time of deciding their purchase. Plus,
of course, they want the sites to be faster and able to respond quickly. That is
what will result in compelling shopping. The sellers also need to build
shopper's trust. This exercise needs constant attention-how secure is the
site, what are the new ways the site has to deal with; ID theft or bogus
transactions, and the like. Even a cursory comparison with international sites
shows that Indian sites are fewer in number and limited in features. They are at
least a couple of years behind in the evolution-and that, in this business, is
a lot of time.
But there is a lot of
stuff available to buy. Try online shopping this year and share your experience
with us.
Happy e-shopping!
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