E-tailing in India: Opportunities Unlimited for Marketers!

Remember those days, when grocery basket in one hand and your tiny fingers in the other, momma used to walk across to the neighborhood store with the list of essentials for the week! Invariably there were some items in the list that used to get omitted for lack of availability or mere oversight. Similarly there were many items piled in the basket, not falling in ‘essential buys’ category – a new flavor of jam or pickle, or even a newly launched toiletry and of course stuff on ‘discount’. The carefully crafted budget was hard to adhere to, given the temptations of array of products, provocatively placed.

Not far back, may be less than a decade ago, the neighborhood grocer had more or less a monopoly on the householders’ budget. And then came the ‘value offers’ from big players in the form of Supermarkets that made it difficult for him to keep the lure of ‘round the corner convenience’ alive. His charm further waned with mushrooming of ‘online grocers’ with the promise of ‘same day delivery’ of ‘fresh produce’ at ‘competitive prices’. A householder was never such a prized customer ever before, with all large and small, retailers and e-tailers vying for their share of her wallet!

Market Outlook

E-tailing in India has truly arrived, going by a recent report by the Internet and Mobile Association of India, eCommerce market in India reached USD 12.6 billion in 2013—a 34% growth since 2009. However these are still early days. Many online market places are struggling to break even, let alone profit. But this has not stopped investors from pumping in more funds. And that is because the huge possibilities that this sector promises. According to a study by Technopak, “In India, e-tailing has the potential to grow more than hundredfold in the next 9 years to reach a value of USD 76 billion by 2021. The country’s growing Internet-habituated consumer base, which will comprise ~180 million broadband users by 2020, along with a burgeoning class of mobile Internet users, will drive the e-tailing story.” The study claims that “the key reason for this disruptive growth lies in the fact that the market-enabling conditions and ecosystem creation for e-tailing will outpace the same for corporatized brick & mortar retail.” The outlook seems optimistic given the rapid penetration of internet and mobile / smartphone usage in the country.

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Rise of Rurban Consumer

According to a report by the Retailers Association of India ( RAI) and consultancy firm KPMG, there is a sharp rise in Rurban market, which refers to locations apart from top tier cities. This segment constitutes the majority of the Indian market and consists of a large number of heterogonous sub-groups that remain largely underserved and are characterized by increased brand consciousness. The report further states that the rurban segment has consumers adopting newer channels of purchase to overcome inherent purchase barriers. To en-cash the opportunity the online players are now stepping in to fill the demand-supply gap created by the lack of physical stores in these cities.

Now, that’s a big opportunity!! And marketers must make the best of it. In the light of growing e-tailing in India, both in metro and tier 2 cities, what is it that Marketers can do differently to fuel ‘the desire to buy’ among consumers across channels and platforms? Here are some points to ponder:

Fight Myth, Counter Fad
Working women are known to be biggest patrons of online marketplace, followed by Gen Y which is addicted to everything mobile! However, many pundits declare that the online shopping is nothing more than a fad will fade away in no time. The Technopak study mentions that “the potential of India’s e-tailing will continue to remain untapped if the current mindset, of exclusion and seeing e-tailing as a “passing fad”, prevails.”

Marketers must allay such notions with right propaganda and greater consumer awareness programs. Collaborating with influencers such as mass media, policy makers and consumer forums will be a great step forward. There are as many myths circulated in the mind of consumers as there are e-tailers! The ones that top the charts are privacy of data and safety of transactions. Clear and convincing facts must be placed in public domain, with right focus and reach. And, this should be of utmost priority to the marketers.

Why scratch the surface?

The urban, on the go, multi-channel customer looks at online shopping as easy, no fuss and convenient option compared to the time consuming trip to supermarkets. However, they comprise just a small fraction of the addressable market. The real opportunity lies with the penetration of mobile and internet in tier 2 cities, which provides a virgin untapped market for e-tailers. According to Frost & Sullivan Study on Impact of Social Media on Online Shopping Behavior in India, over 60 percent of net users in urban India spend over four hours per day and surf the internet mainly for entertainment, networking, business, education, and shopping. More than 130 million people in the country are linked to the internet through fixed and mobile broadband, while over 80 million are on Facebook and 20 million on LinkedIn in India.

However, the challenge in penetrating this market is the mindset of the customers, who are still uncertain of the whole wave of e-shopping. Another challenge is that in this market segment householders, as against their urban counterpart, are not always the decision makers in terms of making a purchase. Given these nuances this market segment needs a studied and well crafted marketing strategy, aligned to ground reality. At one hand it should be about boosting confidence and on the other about empowerment of the customer with the right decision making support. The choice of channel and messaging is also crucial and would require a local flavor, both in terms of content and form. It’s a bit of sweat, agreed, but the outcomes promise to be astonishing.

Convenience to some, aspirations for many!

The Frost & Sullivan Study claims that 67% of e-shoppers in India refer to social media before buying online. Facebook’s new promotion feature is fuelling clicks by aspiring shoppers, who want to explore the world of fashion and beauty, hitherto out of bounds for them. The number of ‘likes’ that these links get are an indication of rising aspiration among new entrants in the online shopping fray. Concurrently, the percentage of abandon carts also suggests their hesitance in taking the final step. Marketers must grab this opportunity and convert the fence sitters to potential buyer. The classic awareness-influence-persuasion-consideration-reinforcement marketing lifecycle can do the trick, provided each step is meticulously planned, implemented and measured. The focus must be on building dialogue and in creating opportunities to influence the decision journey o customers. This of course needs to be supplemented by the right infrastructure to fulfill the dormant need.

Drive Impulsive buying through Essential buying!

“A store can awaken a lust for things you never even knew you needed. And when your fingers first grasp those shiny, new bags… oh yes… oh yes”, that’s The Confession of a Shopaholic. Well, a marketer cannot expect every customer to become a shopaholic, that’s too much of a fantasy. However, strategic marketing does fuel that impulse to own products that you may not need. According to a study by in US more than 78% people buy between 3-6 items outside their shopping list on every visit to the supermarket. Thus there exists a huge potential to make hay with Impulse buying, and yes it is often the topping on the essential buy. Customers visit a store, virtual or physical, to buy the essentials and then pick up one more and more and even more products, impulsively. Hence the trick lies in luring the customer to the till and then flattering her with offers and promotions that she simply cannot refuse. In case of online shopping, the route lies in maximizing click through rate and average time spent on the site. A careful analysis of customer behavior across categories and purchase pattern can unearth opportunities to add that one extra SKU in her basket, and if you are ardent enough, some more!

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Be the Customer in spirit!

As the saying goes, ‘wear the shoe to know if it bites’! As a marketer it is imperative that you are one with the customer as far as the decision making process goes, given the myth and canards doing the rounds with regard to online shopping. It is essential to understand the circumstances and drivers for a purchase and foresee hindrances that come in the way of a well worth transaction. Instead of being product centric, you really need to be customer centric. And no, I am not repeating an oft quoted cliché. Being customer centric means looking at the entire process, from discovering a product to making the purchase, from the view point of the consumer. Marketing must align with and relate to the need of the customer and guide her through the process, ensuring it is an enjoyable journey, one that she would like to repeat and recommend. Word of mouth, or stars in rating rather, are a strong indicator of customer confidence, which often has a trickling effect.


To sum up, these are exciting times and we are in for some disruptive changes in the way we approach the market. Customer is evolving and is demanding more in terms of both value and experience. Marketers are challenged to keep pace with the technological advancement on the one hand and growing customer choices on the other. The trick lies in using technology smartly and optimally to not only propagate brands but build sustained engagement with customers. Customers can be true advocates for your products or services and their recommendations have the potential to get viral on the net in no time. So be at it, virtual world is opening up and marketers have opportunities unlimited.

Image courtesy of imagerymajestic / FreeDigitalPhotos.net


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