NEW STUDY FROM JUXTCONSULT FINDS 4.2 MILLION ONLINE SHOPPERS IN INDIA.
Toplines:
- 40% of all urban net users buy online.
- 25% of the net population shops online consistently. 4.2 million regular consumers on the net.
- 42% of the sales originate through 5% of consumers.
Overview
The shopping cart is out. The wallet is ready. Although a small segment of 5% heavy spending users drive 42% of online spends, others are fast catching up. As 40% internet users embrace the online market and become e-consumers, this can only bring cheer to an economy which is being fuelled by a healthy purchasing power. Much as the Internet has been heralded as the harbinger of change, it has begun to influence the way we shop. The lull in the storm can be blamed on safety. Threat of abuse of personal information deters the keen yet cautious online shopper.
These and other key insights have emerged out of one of the largest online surveys conducted by JuxtConsult in April 2005 among the Internet users in India. The survey sampled more than 30,000 users with the aim to unravel the identity of the net user along with his lifestyle choices. To estimate the penetration of Internet among urban Indians a telephonic survey spread across ten cities with over 3,000 participants was also conducted.
Heavy Spenders are driving overall online sales
5% of buyers contribute a hefty 42% of the rupees spent online. This section of buyers spends Rs. 5,000 or more per month on the net. It is interesting to note that 2 out of every 3 heavy spenders are also ‘netholics’, those who are on the net for more than 3 hrs a day. Thus, a large portion of an enlarging market is patronized by only 5% of users who are also addicted to the Net.
Of all those who buy online, only 25% are spending more than Rs.1, 000 per month while the rest 75% bill less than Rs.1, 000/- per month.
Men shop, Women search
While 43% of male users buy online, only 31% of urban female users are consumers as well. Women tend to search more. Defying their more common attitude towards shopping, women are more guarded when it comes to the online market. Nevertheless, women shoppers do not think that buying online robs them of the fun of physical shopping any more than men.
Net still more of a Search Vehicle than a Marketplace
Shopping on the net may be limited, but it is widely used to search information related to buying products. Depending on the product type, 9% to 25% are buying online, whereas 33% to 47% are searching the net for product information.
Motivation to buy online varies but users fear personal information misuse
The single biggest motivation for buying online for net users is saving time. 32% of them look to shop online with this purpose. Convenience of shopping ‘24X7’ and home delivery are other major incentives.
However, the concern of possible misuse of credit card or personal information is extremely significant among online buyers, with almost 55% of them voicing their concern. Clearly, tackling and countering the issue of online safety figures as an imminent challenge for net marketers.
Books and CD’s top grocery list
The products that are bought most on the web are books and CDs. 25% net users buy these items online. The buying to searching ratio for these is also the highest at 62%. Ironically, computer hardware and software, despite having the home advantage are among one of the least bought products online with only 13% buying them. It’s buying to searching ratio stands at a mere 28%.
Downloading application forms most availed service
Downloading application forms is the service availed most on the net. 59% of users use the Internet for this purpose. Searching for a job and using net banking facilities are other top services for the online audience. Booking for airline and train tickets online is also a popular option with net users.
(The question regarding services used online was open ended and respondents had the choice of choosing more than one service, hence the percentage data adds up to more than 100%)
In sum, the online market in India is blossoming but is yet to take off in a considerable way. The Internet is still being used more for searching than buying products and services. Though a noticeable proportion of net users are also net consumers, essentially, at present only a small tribe among them is driving the online shopping ‘momentum’.
Further, while women are usually the more zealous shoppers in most economies, they form a rather small proportion of net users in India at present (only 15%) and even fewer of them buy online. Therefore, marketers face the uphill task of encouraging more women to explore the web and incentivize them to shop online.
About JuxtConsult
JuxtConsult, a joint initiative of Indicus Analytics and Webchutney, aims to help organizations to understand and harness the power of the Internet and New Media to exploit their business potential. Through research and analysis, JuxtConsult offers insightful guidance on emerging trends in the Internet domain that are likely to have maximum impact on businesses.
Additionally, JuxtConsult uses proprietary research methodologies and analytical models to create better and faster quantitative performance measures for marketers to track their brand and consumers online regularly and real-time. |
