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Online shopping in India grows 128pc

Posted on Jan 28, 06:59PM | IBNS

With Indian internet users getting comfortable with the idea of buying products on Internet, online shopping in India has hit a tipping point and is expected to see exponential growth in 2013.

This was revealed on Monday by a report compiled by Google India by combining consumer interest observed on Google search and online research conducted by TNS.

The report highlights exponential growth in interest in online shopping by Indians as per data recorded on Google Trends.

Online shopping in India, saw 128pc growth in interest from the consumers in the year 2011 to 2012 in comparison to only 40pc growth in 2010 to 2011, making 2012 the tipping point for online shopping in India.

In terms of product categories, consumer interest on Google search for apparels and accessories (30pc ) emerged as the second biggest product category after consumer electronics (34pc ) and is expected to become bigger than consumer electronics in 2013 in terms of absolute query volumes.

Other categories that Indians searched for online were Books (15pc ), Beauty and Personal care (10pc ), Home and furnishing (6pc ), Baby products (2pc ) and Healthcare (3pc ).

The report also highlighted massive growth in niche product categories in 2011-2012 on Google search, in comparison to electronics, baby products, Home and furnishing, and healthcare saw over 2x growth and were also the fastest growing product category in terms of query volume on Google search.

Speaking about the insights and implications for the online shopping Industry players in India, Rajan Anandan, VP and 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 and accessories and niche product categories like baby products, home furnishings and 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 51pc of traffic from non-metros," he said.

As mobile internet user base grows in India, 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, 30pc 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 and Pune.

As per the research, 90pc 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 and accessories was among the top category (84pc ), followed by electronics (71pc ), beauty and personal care (64pc ), books (62pc ) and household products (61pc ).

The research also highlighted that baby products (39pc ), health and nutrition (43pc ) product category were also becoming popular with online buyers.

The frequency of purchase was also higher for categories like apparels and accessories (34pc ), beauty and personal care (33pc ) products in comparison to electronics (28pc ), which also makes these categories more profitable because of repeat purchase.

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 (24pc ), credit card (19pc ) and cash on delivery (55pc ). For regular internet users - cash on delivery was the most preferred mode of payment (74pc ), followed by debit card (18pc ) and credit card (5pc ).

In terms of motivators to shop online, 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.

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.

TNS Australia research demographic profile of the total sample:

Gender: Male (63pc ), Female (37pc ), age group (18 to 50) with 71pc respondents in the age group of (18 to 35).

89pc users were heavy users of the Internet with 67pc users having access to their own money and 33pc having access to someone else's money.

The sample size had a monthly average household income of INR 55,051/-. The respondents were spread across Delhi (22pc ), Mumbai (24pc ), Kolkata (9pc ), Bangalore (17pc ), Ahmedabad (6pc ), Hyderabad (12pc ), Pune (7pc ) and others (2pc ).

Google Trends analyzes a portion of Google web searches from all Google domains to compute how many searches have been done for the terms one has entered, relative to the total number of searches done on Google over time.