The online retail industry in India is likely to be worth Rs 7,000 crore by 2015 due to easy availability of broadband services and increasing internet penetration across the country, apex industry body ASSOCHAM said today.
Buying-selling trends received from leading online shopping portals indicate the online retail market currently stands at Rs 2,000 crore and is growing at a steady annual rate of 35 per cent. India is set to become the third largest nation of internet users in the next two years with a large chunk of youngsters eager to adopt new technologies with rapidly changing lifestyles.
“A booming economy and rising disposable incomes have contributed to the evolution of online shopping,” said Mr D.S. Rawat, secretary general of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) while releasing findings of a random survey conducted during January to June 2011 in ten cities in which 5,000 shoppers were interviewed.
Online shopping in India
Earlier, most online shoppers used to evaluate options by gathering information on available products and prices or buy low-value items like gift products but finally opted for final transactions at the traditional retail outlets.
“But now the trend is changing fast. Leading companies have gauged the potential of online retail industry and are gearing up fast to cash in,” said Mr Rawat.
The survey conducted by ASSOCHAM Social Development Foundation (ASDF) involved interactions with 500 shoppers in the age group of 16 to 35 years each in ten cities of Delhi, Mumbai, Chennai, Bangalore, Kolkata, Ahmedabad, Chandigarh, Ludhiana, Lucknow and Jaipur.
About 40 per cent of those surveyed across the aforesaid cities said they prefer to shop online considering convenience to shop anytime during the 24 hours and one can collect detailed product information. Besides, one can research variety of products available and can easily compare prices from different vendors anywhere in the world.
Majority of consumers also said they shop online to purchase products that cannot be found in malls and the local markets.
Around 25 per cent (most of these comprised high-income consumers residing in suburbs, NCR cities) of the respondents said they prefer to hangout and shop at swanky malls, upmarket shopping complexes as they not only boast of multi-brand availability under one roof but provide air-conditioned, dust-free atmosphere.
A total of 20 per cent of those interviewed said they prefer to shop at local traditional markets because of the familiarity with ambiance, ease of access, variety of goods, early opening and late closing times and shop owners’ relationship with loyal customers.
A meagre 15 per cent of shoppers said they prefer to shop at specialty stores rather than making a voyage to a mall or looking for a good bargain at traditional markets as they can get specific stuff from specific stores.
Consumers in Mumbai ranked number one among top five cities, with almost 65 per cent of Mumbaikars saying they prefer shopping online and citied rising fuel prices as one of the primary reason they do not want to loiter around malls, traditional shopping hubs.
Delhi ranked on third spot after Ahmedabad. As per the results of ASSOCHAM survey 45 per cent of Delhiites prefer shopping online, 30 per cent prefer to shop in traditional markets like Sarojini Nagar, Green Park, Lajpat Nagar central market, Karol Bagh, Janpath, Paharganj, Sadar Bazar and Chandni Chowk. Around 15 per cent of respondents said they prefer to visit a mall for their shopping needs while, 10 per cent said they prefer shopping at specialty stores.
Facilities like free shipping, product ratings/reviews, multiple payment options, product demonstration videos and free return policy largely influence the purchasing decision of consumers shopping online, concluded the survey.
Of those who are averse to shopping online cited various reasons like prefer to research products and services online and then actually buy them from a store (30 per cent), find delivery costs too high (20 per cent), don’t want to share personal financial information online (25 per cent), lack of trust on whether products would be delivered in good condition (15 per cent), don’t have a credit/debit card (10 per cent).