A recent report compiled by Google India revealed that online shopping in India has hit a tipping point and is expected to see exponential growth in 2013. Online shopping in India, saw 128% growth in interest from the consumers in the year 2011 to 2012 in comparison to only 40% growth in 2010 to 2011, making 2012 the tipping point for online shopping in India. The report was compiled by combining data from Google Trends and online research conducted by TNS Australia with a sample size of 800 respondents on behalf of Google India in November 2012.
Consumer electronics category accounted for 34% of the product searches, followed by Apparels & accessories (30%), Books (15%), Beauty & Personal care (10%), Home & furnishing (6%), Baby products (2%) and Healthcare (3%). The apparels & accessories category is expected to become bigger than consumer electronics in 2013 in terms of absolute query volumes.
Commenting on the insights, Rajan Anandan, VP & Managing Director of Google India, said, “With approximately 8 million Indians shopping online in 2012, online shopping industry in India is growing rapidly and will continue to see exponential growth. By looking at the trends in 2012, we expect 2013 to be a strong growth year for players who’re focussed on fast growing categories like apparels & accessories and niche product categories like baby products, home furnishings & health-nutrition. We expect the growth to come from outside of top 8 metros as was evident in our recently concluded “Great Online Shopping festival’ which saw over 51% of traffic from non-metros.”
With increase in India’s mobile internet user base , mobile phones are also becoming a contributor in the surge for online shopping with Google witnessing 2X growth in number of queries from mobile phones in the year 2011 to 2012. Currently, 30% of all shopping queries in India come from mobile phones. These trends were also validated with the help of an online research conducted by TNS Australia of the internet users in the age group 18 to 50 from Delhi, Mumbai, Kolkata, Bangalore, Ahmedabad, Hyderabad & Pune.
The research found that 90% of online shoppers are planning to buy more products online which reflects on the positive experience of the users. In terms of top product categories ever purchased online, apparels & accessories was among the top category (84%), followed by electronics (71%), beauty & personal care (64%), books (62%) and household products (61%). The research also highlighted that baby products (39%), health & nutrition (43%) product category were also becoming popular with online buyers.
The frequency of purchase was also higher for categories like apparels & accessories (34%), beauty & personal care (33%) products in comparison to electronics (28%).
The report found that, in terms of converting more users to shop online, online ticketing emerged as the gateway, as it was easier to convert online ticket buyers to shop online. Online ticket consumers were also likely to spend higher average amount of INR. 2347 on their first product purchase in comparison to INR 1626 for internet users. Online ticket buyers were also seen to be more comfortable with the use of debit cards (24%), credit card (19%) and cash on delivery (55%). For regular internet users – cash on delivery was the most preferred mode of payment (74%), followed by debit card (18%) & credit card (5%).
According to the report, the consumers highlighted cash back guarantee as the number one benefit, ability to give cash on delivery, fast delivery, great deals and access to branded products were highlighted amongst the other benefits of shopping online. The consumers also highlighted some barriers that deter them from shopping online – the number one factor was inability to touch and try the goods before purchase, fear of faulty products, fear of posting their personal and financial details online and the inability to bargain were cited among the other reasons.