What's the future of online shopping in India?

18 December, 2012

Nowadays, Indian customers are showing a great interest in online shopping and the trend has picked up after initial hiccups. Despite the fact that Internet usage is quite low in India and the online shopping experience is not that appreciable, still the practice is evolving at a faster pace and is witnessing significant growth.

THE INDIAN customers can broadly be divided into two groups; the first group consists of people who strongly believe in conservative way of shopping, which includes touch and feel of product and testing its features. The second group looks for price-savvy deals; they are normally attracted to the online shopping, as you can find the best deals through online shopping.

Online shopping is basically a combination of tele-shopping and mall culture. In tele-shopping, you can get some selected products which can be called as low-intensity products and it targets a limited segment of people. And in mall culture you get all the products under a single roof and here you get the advantage of comparing the rates of products. But the thing is you can't visit a mall frequently and the reasons can be many, like the mall isn't accessible etc.

Online shopping can be called as a 'virtual mall' where you can find all kinds of products under a single roof and is very much reachable in today's growing world of Internet. You don't need to stand in long cumbersome queues and wait for your turn. In this fast paced lifestyle, Indians are opting for online shopping which offers them convenience, comfort and saves lot of time. The added advantages, like cash on delivery, viability of returning goods if the customer is not satisfied and the discounts provided by the online websites make it more interesting for the customers.

Shrabani Mukherjee, a resident of Gurgaon says, “I normally shop for books online as they (websites) provide heavy discounts on them. I feel e-commerce is here to stay as people are getting busier by the day and there are many who do not like to go from one shop to another to buy the products.”

The online shopping industry is India is expected to grow at a rate of 57 per cent by 2015. Also the online shopping is pushed up by wide initiatives like the one that was carried out on December 12, when Google India partnered with the big players of e-commerce industry like Flipkart, Snapdeal, Homeshop18, IndiatimesShopping and makemytrip, and came up with something called 'Cyber Monday'. As a part of this event, Internet users could log in and get deals for 24 hours on that day from over 50 partners across e-commerce, local and classified, online travel websites and BFSI industries, according to Zee News.

But the question remains: will the e-commerce market stay in India? There is no doubt that you will get great deals, varieties of brands and many more such advantages with online shopping, but on the flip side, there are certain disadvantages associated with it like the dis-satisfaction of customers for not having the touch and feel of the product they are buying, the waiting period for delivery of the product, chances of mishandling while delivery, online securities and fraud, dull shopping experience and online connectivity issue.

All the above disadvantages of online shopping are related to the customers. Now if we look from marketing side, the online shopping has got a lot of competition as every small enterprise is starting their own online store to attract the online customers. And to survive in the competition, the company has to provide the best deals to customers. This will decrease the profit margin of the company.

The acquisition cost of the customer is high in online shopping, as companies are offering schemes like free shipping, cash on delivery and viability of returning goods, in case customer is not satisfied; all these things cost a lot to the company and makes the profits low and limit the growth of this sector.

Apart from this, the online marketing in India is restricted only to certain products like electronic gadgets, books etc. It has not been extended to grocery. Other factors like limited reach of Internet in rural areas and lack of computer knowledge restrict the growth of e-commerce in India.