In 2015, over 50 million people in India shopped online. AT Kearney estimates that by 2020, this number is expected to grow three-fold and cross 175 million. E-commerce companies in India who've been riding this growth wave, will have to scale up 5 times more, to meet this demand.
While talking about the growing popularity of E-commerce, especially via smartphones, would be stating the obvious, there are many evolutionary changes that the ecosystem is undergoing that are worth a strong mention. Here are 5 trends that we think every E-commerce company in India must know about:
1. Shopping categories that are ruling the E-commerce roost
As a category, lifestyle was the highest searched category between April 2015 and March 2016 with 24% searches on apparel. 63% of these searches came from women. Consumer electronics was the second highest search category with mobile phones the top most searched item in this category. 55% of consumer electronics searches originated from mobile devices. E-commerce companies can take cues from this and focus more on mobile marketing right from the discovery stage.
2. Consumers lot more motivated to shop online than before
Indian consumers are way past their initial fears of not being able to touch or experience the product in person when shopping online. In fact, today they are much more motivated to shop online. At 62%, wide variety of products/product assortment takes the top spot for reasons to shop online. Discounts (52%) is the next big reason Indian consumers turn to E-commerce sites and apps. Convenience of ordering and delivery (48%) is the next big reason for Indian consumers to shop online.
3. Women will power the online shopping growth
Although male consumers contributed to a major chunk of initial E-commerce shopping phenomenon, this is changing very fast. While 20% of all online shoppers in India in 2015 were women, this share is set to double to 42% by 2020. This means a bigger opportunity for E-commerce companies to tap the right audience and grow fast.
4. Mobile most preferred for online shopping
No surprises here. More payment options (credit/debit card, cash on delivery, mobile wallets) has made consumers more comfortable in not just searching for products on their mobile devices but buying them too. In fact 50% of E-commerce product purchases came from mobile in 2015.
5. Digital – the first source of product discovery
There was a time when a friend or a relative were trusted sources for product discovery. Print and TV ads also helped consumers discover products. However, today, as most connected consumers spend a considerable amount of their daily time online, digital has become the first source of information for product discovery and pre-purchase research. Three out of top four information sources are digital (digital search, brand's website/ app, E-tailer's website/app). For high ticket size, high penetration categories (e.g. Lifestyle, consumer electronics etc.) advertisements & digital discovery are preferred platforms for online information search.
The above trends can help E-commerce companies in India create a well-rounded strategy to reach out to their consumers and scale up. For instance, E-commerce can reach out to the growing audience (women) on their preferred device for product search and purchase (mobile) using mobile marketing to drive them to their platform at the search and discovery stage to convert them into a purchase. It is evident that mobile, be it web or app, remains at the center of the growing E-commerce universe and mobile marketing done the right way can bring them the business scale we've talked about before.