Monday, November 24, 2014

Google announces 3-day long online shopping fest for Indian web users

Google India on Thursday announced that the 2014 leg of its yearly Online Shopping Festival will happen between December 10 and 12. Google India conceptualised the Great Online Shopping Festival (GOSF) back in 2012 in collaboration with a number of Indian e-commerce players, borrowing from US online retail festivals like CyberMonday and Black Friday. Recently, China's Singles' Day online shopping festival also reported massive online sales. 

The idea of the festival is to offer heavy discounts to buyers and promote sales of online shopping portals. In 2013, the festival took place between 11 and 13 December.

Apart from announcing the dates of the online shopping festival, Google India published a report on online retail trends in India. The report revealed, India could have as many as 100 million online shoppers by the end of 2016. Compared to 2012, this is an exponential rise considering back then there were 8 million online shoppers in India. Currently, according to Google's estimates there are around 35 million online shoppers in India. This means there will be a growth factor of 12x between 2012 and 2016. 

Google conducted this research in conjunction with Forrester Research. The research was claimed between March 31 and July 30. It included 6589 respondents covering 50 cities including tier 1, tier 2 and tier 3 cities. 

Google's report indicated that 71 per cent of the shopping will happen from tier 1 and tier 2 cities.
Interestingly, according to the report women outspend men by two times in tier 1 cities and in the next 12-18 months they will be shopping more online. 40 million women are projected to be shopping online by 2016.

Mobile is driving this growth in e-commerce. Rajan Anandan VP and MD, Google India said, " Mobile is driving most if not all the growth on the Internet. All the big markets like China and the US, developed as Desktop markets, but India is being developed as a mobile market." 

The report claims that more and more women will be shopping online via mobile devices. 1 in 4 will be shopping via their mobile devices. 

In fact, according to Google already 1 out of 3 people in tier 1 and tier 2 cities are transacting online via their mobile devices. 

Mobiles become even more important in tier 3 cities as half of the transactions happen via mobile devices. 

The density of search queries for online shopping on mobile devices has increase massively according to Google. 

In 2012, there were just 1 out of 4 queries being searched on mobile. In 2014, however, the number rises to 57 per cent. 

Even Snapdeal's Rohit Bansal echoed similar thoughts. " Mobile is the way for e-commerce, in fact we believe India is a m-commerce market, not a e-commerce market. In tier 2 and tier 3 cities mobile is driving growth, and in some cases 80 per cent of our business is coming from these markets."

The Indian e-commerce market could have retail revenues of $15 billion by the end of 2016. Google admits this is a 'floating number' as earlier it was predicated that the number would be around the $10 billion mark. 

The key takeaway from the report is that consumer has increased greatly concerning online shopping.
Nitin Bawankule, Google India's industry director for e-commerce, local, and classified said, "The consumer confidence to shop online has grown significantly in the last year and a half. " 

Additionally, discounts are not the main reason behind the growth. 65 per cent people buy due to convenience, 64 per cent buy because of the variety, and 60 per cent buy to improve social status. 

In fact, the behaviour of the Indian online shopper mimics that of people in developed markets, claims Google's report. 

"The report indicates, the behaviour of Indian online buyer is fast mirroring buyers in developed markets as more subjective product categories have started to see significant growth," claimed Bawankule. 

Categories like Skin Care, Baby Care, and Home furnishings are growing rapidly. While men dominate the electronics category, women are buying more skin care products. 

Apparels comprise of 64 per cent of the shopping search queries. 

While the growth has been exponential in the e-retail space, consumers are not exactly satisfied. 

"The etailing industry needs to act now to cater to this strong user growth trend," said Bawankule. 

The report indicates that 62 per cent of shoppers have not been satisfied by their shopping experience. 58 per cent of the unhappy buyers are in tier 1 cities but that number jumps to 70 per cent in tier 2 cities. 67 per cent of the people have also claimed that returning purchased item is complicated.

Additionally, 55 per cent of the buyers have doubts about the quality of goods sold online. 63 and 65 per cent respectively had concerns about online transactions and were not willing to share their private information online. 

But perhaps, the biggest hindrance to e-retail was connectivity. 66 per cent people claimed connectivity was a problem. In fact, Google's numbers show that India's average broadband speed in 0.5mbps, while China is far ahead with an average speed of 4mbps.

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