MUMBAI: The Internet has transformed many aspects of life, but perhaps none more so than how Indians shop for goods and services. More than eight out of ten Indian online consumers plan to shop online in the next twelve months and more than a quarter indicate they spend upwards of 11 per cent of their monthly shopping expenditure on online purchases, according to a recent Nielsen Global Online Shopping Report.
The report found that Asia Pacific consumers spend the most on online purchases, as a percentage of total shopping expenditure, compared to any other region globally.
23 per cent Indians surveyed said that they had never shopped online. Globally 16 per cent of consumers have never shopped online and the percentage is even lesser in Asia Pacific with only 13 per cent of consumers indicating that they had never shopped online.
Nielsen director, online division Karthik Nagarajan says, "Low internet penetration and lack of confidence in using credit card credentials, are the biggest challenges for online shopping in India, though high adoption for online travel sites is changing this. The medium to heavy users have always been quite comfortable buying stuff online".
Shopping through a virtual space calls for trustworthy recommendations to back the products and services for Indians, who trust no one more than family and friends when shopping online. According to the Nielsen report, 71 per cent Indians trust recommendations from family when making an online purchase decision, followed by recommendations from friends at 64 per cent and online product reviews at 29 per cent.
"Indians still like a first hand experience for high involvement products and services that they buy. The traditional one to one experience with the sales person, who clarifies all their doubts, is preferred by many. Since the online medium doesn‘t allow them this interaction, the closest is recommendation from their family and friends, though this is being largely replaced by expert reviews online," continued Nagarajan.
Online reviews and opinions are most important for Indians when buying Consumer Electronics (57 per cent), Software (50 per cent), and a Car (47 per cent). The Nielsen report highlights the importance of online opinions as part of the decision making process in purchasing products and services. Many Indian consumers went so far as to say they would not buy products or services without considering online reviews, and again this was particularly important in the purchase of consumer electronics (41 per cent), Car (38 per cent), and software (35 per cent).
With online reviews and opinions weighing so heavily in consumer‘s decision making processes, it is interesting to note that more than four in ten Indians are more likely to share (post a review/ Tweet/ review) a negative product or service experience online than they were to share a positive experience. At the country level, this tendency was highest amongst consumers in China (62 per cent), Vietnam (46 per cent), Singapore and India (both 44 per cent).
Half the Indian consumers (50 per cent) use social media sites to help them make online purchase decisions. This percentage is higher for the Asia Pacific region at 60 per cent who use social media sites to help them make purchase decisions (compared to 43 per cent globally).
What‘s in the online shopping kitty? In the next six months Indians are most likely to buy books (41 per cent), airline ticket/reservations (40 per cent), and electronic equipment like TV, Camera, etc (36 per cent) online. Other products and services that Indians incline to buy in the next six months include tours/hotel reservations (29 per cent), event tickets (26 per cent), clothing/accessories/shoes (25 per cent), computer hardware (24 per cent), videos/DVDs/Games (not downloaded) (22 per cent), and music (not downloaded) and computer software (not downloaded) (both 21 per cent).
When shopping online, one third of Indians (33 per cent) purchase most frequently from websites which allow them to select products from many different stores. Nearly three in ten (28 per cent) prefer online-only retail sites. Nine per cent Indians purchase from websites that also have traditional ‘brick and mortar‘ stores and eight per cent buy from sites that also sell their products through catalogs and also over the phone.
"There is a bit of a silent social media revolution going on in India at the moment and it is largely mistaken for just social networking. The truth is that discussion boards, forums and review sites are seeing high growth in terms of conversations and this is where many shopping decisions are being made," adds Nagarajan.
