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Online shopping set for exponential growth in 2013: Google India

Study finds that Apparels & Accessories category will overtake consumer electronics in 2013

BestMediaInfo Bureau | Delhi | January 29, 2013

(L-R) Rajan Anandan, VP & Managing Director, Google India and Nitin Bawankul, Industry Director, Google India

With Indian Internet users getting comfortable with the idea of buying products on the net, online shopping in India has hit a tipping point, and is expected to see exponential growth in 2013.This was revealed today by a report compiled by Google India by combining consumer interests observed on Google search and online research conducted by TNS Australia.

The report highlights exponential growth in interest in online shopping by Indians as per data recorded on Google Trends. Online shopping in India saw 128 per cent growth in interest from the consumers in 2011 to 2012 in comparison to only 40 per cent 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 & Accessories (30 per cent) emerged as the second biggest product category after consumer electronics (34 per cent) 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 (15 per cent), Beauty & Personal care (10 per cent), Home & furnishing (6 per cent), Baby products (2 per cent) and Healthcare (3 per cent).

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

Speaking about the insights and implications for the online shopping industry players, Rajan Anandan, VP & 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 & accessories and niche product categories like baby products, home furnishings & 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 51 per cent of traffic from non-metros.”

As the 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, 30 per cent 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 Internet users in the age group 18-50 from Delhi, Mumbai, Kolkata, Bangalore, Ahmedabad, Hyderabad and Pune.

The research shows that 90 per cent of online shoppers are planning to buy more products online which is a reflection of the positive experience of users. In terms of top product categories purchased online, apparels & accessories was the top category (84 per cent), followed by electronics (71 per cent), beauty & personal care (64 per cent), books (62 per cent) and household products (61 per cent). The research also highlighted that baby products (39 per cent), health & nutrition (43 per cent) were also becoming popular with online buyers.

The frequency of purchase was also higher for categories like apparels & accessories (34 per cent), beauty & personal care (33 per cent ) products in comparison to electronics (28 per cent), 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 Rs 2,347 on their first product purchase in comparison to Rs 1,626 for Internet users. Online ticket buyers were also seen to be more comfortable with the use of debit cards (24 per cent), credit cards (19 per cent) and cash on delivery (55 per cent). For regular Internet users, cash on delivery was the most preferred mode of payment (74 per cent), followed by debit card (18 per cent) and credit card (5 per cent).

In terms of motivators to shop online, 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.

Info@BestMediaInfo.com

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