By Manish Mishra, Vice President (Sales)
"Gone in a Flash Sale: 3 Great Offers Only Today" screams an ad on one of India's most popular online shopping sites, Flipkart. "Exclusive Offers on the Mobile App".
“Download Snapdeal Mobile App and Get Exclusive Offers” reads a promotional banner at the top of Snapdeal's home page.
India is undergoing a shopping revolution, driven by the proliferation of smartphones and affordable broadband. It's hard to understate the impact that mobile is having on consumer purchases and decisions.
In collaboration with the Mobile Marketing Association, BuzzCity recently conducted a consumer survey of nearly 3600 mobile users from 26 countries. In India, we found that nearly half of mobile users make purchases online and another 13% 'window shop' on the internet before going to physical stores.
The rapidly changing marketplace is having a big impact on companies and consumers alike.
India has long been one of the top countries on The BuzzCity Advertising Network. In the second quarter of the year, more than 23 billion banner ads were served in India, up 10% from the previous quarter. More than half of Indian mobile users now have smartphones.
“Broadband internet connectivity, considered a luxuy some 10 years ago across India, is spreading fast, this time through mobile phones,” writes HSBC India's Tarun Balram in a column for Forbes. “Cheaper smartphones and a ballooning telecommunications industry have pushed India to the cusp of a digital revolution . . . and they are leapfrogging traditional desk-bound technology.”
Companies like Flipkart, Jabong, Myntra and Snapdeal are leading the way. Flipkart is India's biggest e-commerce company by sales and has reportedly just raised US$1 billion in new financing. But Snapdeal has some 30,000 sellers; over half of Snapdeal's sales are done on mobile, up from just 5% in 2013.
International companies like Amazon have a presence in the market – made easier perhaps by the prevalence of English on Indian websites - but they've had to adapt, because foreign-controlled companies are not allowed to sell products online. Instead, eBay's model of providing a platform for individual sellers is more common.
Some US$3 billion of goods and services are currently sold online in India. The e-commerce market is projected to grow 7-fold to US$22 billion within the next four years, according to CLSA Asia-Pacific Markets, as tens of millions of people upgrade their phones.
The BuzzCity Survey highlights several trends in India, which are consistent with consumer behaviour that we see in markets across the globe. Here are five points to take note:
1. All-Round Growth
We're seeing growth across multiple product segments. The areas which are most popular – both in India and across Asia-Pacific - are Computers & Electronics, Clothing & Accessories and Books & Music.
2. The lowest price doesn't always win
While price is important, the top criteria for choosing an online store are product variety, display and navigation. It has to be easy for a customer to search for an item and find what they're looking for (including the price tag).
3. The Shopping Cycle Begins At Home
High Street and Main Street retailers need to understand that consumer decisions start long before they step foot in a shop. Nearly 1 in 4 Indian shoppers check prices and product availability before going to a store. 17% of consumers shop online while they are in a store (up from 8% in our last survey). A lot of shoppers feel they can get better information online than from store attendants. And a rising number of consumers are leaving stores without making a purchase.
4. Financial Services Need to Improve
The biggest obstacle to shopping with a phone is the lack of a debit or credit card. In India, 38% of respondents who say they are not likely to make a purchase online cite this reason.
5. Mobile First, But One of Many Channels
One in three Indian consumers shop online with their phones. M-Commerce is twice as popular as PC-based commerce. BUT that doesn't mean marketers should ignore computers. Advertisers need to appreciate that different channels cater to different people, different experiences and even different products. Brands need to maintain their message across multiple platforms.
Some consumers will always prefer to shop in-store – at least some of the time – but the proliferation of smartphones, reliable affordable broadband and ease of online shopping are a recipe for m-commerce's growing success. Companies that adapt will prosper.
