Volume 2, Issue 4 (April, 2014) INTERCONTINENTAL JOURNAL OF MARKETING RESEARCH REVIEW

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Bennett Parsons
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1 CHANGING INDIAN CONSUMERS FROM CAN'T TOUCH, WON'T BUY" TO E- TAILING K.BALAJI 1 Dr. R. MAHESWARI 2 1 Ph.D Research Scholar in Management Studies, Research and Development Centre, Bharathiar University, Coimbatore 2 Professor & Head, Department of Management Studies, IFET College of Engineering, Gangarampalayam, Villupuram ABSTRACT The growth of E tailing, a sub set of E commerce is under grim in India when compared to other developing countries. According to A.T. Kearney Global Retail E-Commerce Index for Market Opportunity in Global Retail E- Commerce, India fails to rank under top 30 developed and developing countries. The growth in organized retailer has enabled many developing markets to shortcut the traditional unorganized retail as online retail grows. Further the consumers in developing markets are fast adopting behaviors similar to those in more developed countries. India is also witnessing the same Changing Indian Consumer Buying Behavior towards Mobile tailing. This paper makes an attempt to limelight that in long term India will emerge as a destination of opportunity for E- tailing market. This is also accounted to the growth of Mobile tailing with the improvement in Infrastructure. The factors which influence the growth of Mobile tailing are also discussed. The penetration of Internet access is increasing in India, the modes of connectivity to Internet via mobile are getting increased and the changing consumer access to E tailing makes the market vibrant. Further to do sound business and to be part of the game the retailers have to go online for getting connected with their customers. Keywords: E Tailing, Changing Consumers, Mobile Internet INTRODUCTION The organized retail sector started growing in a rapid speed with the current of share of 8%. This shows as an opportunity that the organized retailers have a big space to play both in physical and electronic market. The changing consumer behavior among Indians contributes for the transformation of organized retailers. There is a saying about Indian retail consumers can't touch, won't buy" mentality. But this is changing because of the change in buying behaviors; one such is the rising trend of online shopping. The E- tailing market is under boom with a proving example of the growth of India Based E Commerce Company Flipkart. In the year 2014 it hits an annualized sales run rate of USD one billion (over Rs.6, 100 crore) -- a year ahead of its target. CRISIL Research expects and estimates the India s online retail industry will grow at a healthy per cent CAGR to Rs 504 billion by The e- tailing market in India is getting vibrant due to the Internet penetration via mobile phones, Y generation internet users, change in the trend of using Mobile, cheaper access device for Internet Non Metros and Large Dynamic Consuming Class. India is witnessing the same which USA witnessed a decade back where the big retailers are forced to open online shopping sites for being in touch with their customers. Thus this transformation in India also will start in the near future where the retailers mark business growth through online rather than traditional outlets. 38

http:// OBJECTIVES OF THE STUDY 1. To explore the Changing Indian Consumer Buying Behavior towards E- Tailing 2. To highlight the contributing factors for the growth of E- tailing market in India 3.

2 OBJECTIVES OF THE STUDY 1. To explore the Changing Indian Consumer Buying Behavior towards E- Tailing 2. To highlight the contributing factors for the growth of E- tailing market in India 3. To lime light that in long term India will emerge as a destination of opportunity under E- tailing market among developing countries 4. To signal the traditional retailers to print their foots in electronic platform as consumers have started purchasing expensive items like furniture and appliances rather than inexpensive items like music CDs and books. INDIA S RETAIL INDUSTRY - % OF GROWTH IN GDP The global slowdown showed a sluggish growth in the GDP of emerging economy. In India the % of GDP contributed by house hold consumption was last measured at 60% in 2012.According to World Bank (year 2012), the total retail market size in India reached US$ 518 billion which accounts for nearly half of the private consumption. As per Technopak s estimates, India s GDP growth, in real terms, will average nearly 6% over the next decade. This growth will therefore translate to an increase in merchandise retail market, from the current ~USD 518 billion, to USD 810 billion, by 2021, (assuming a 7% inflation rate). The retailing sales in India is served through three modes traditional brick & mortar stores which make up 93% of the total market, Corporatized brick & mortar retail caters to 7%, while e-tailing s share is 0.1%. In the coming decade, these three retail destinations will behave differently in terms of their share of total retail sales. INDIAN RETAIL MARKET SIZE Technopak estimates that, by 2021, the share of total corporatized retail will increase from the current 7% to 20%.Thus E-tailing will emerge as a viable, by which corporatized retail can expand its share of the total retail pie. Technopak estimates that e-tailing in India will grow from the current USD 0.6 billion to USD 76 billion by 2021, i.e., more than hundredfold. E-commerce accounts for less than 1% of the total retail market in India; it is by far the fastest growing retail channel. It is estimated to grow to as much as $22 billion (excluding travel) in five years from $3.1 billion currently, according to a report by CLSA. Another study highlights that the India s online retail industry has grown at a swift pace in the last 5 years from around Rs 15 billion revenues in to Rs 139 billion in , translating into a 39

http:// compounded annual growth rate (CAGR) of over 56 per cent.

3 compounded annual growth rate (CAGR) of over 56 per cent. According to CRISIL Research, it expects the buoyant trend to sustain in the medium term, and estimates the market will grow at a healthy per cent CAGR to Rs 504 billion by SOURCE: CRISIL RESEARCH The growth in E tailing is because of the changing Indian Consumers. The change is due to the factors which influence them to do online shopping. The factors are discussed in brief, how it changes the consumer buying behavior and its contribution for the growth of E tailing. EXPLODING INDIA S INTERNET ECONOMY India with a user base of 120 million is the world s third largest Internet market.china has the largest Internet user base in the world with 480 million users followed by the US with 245 million users as of By 2015 China is expected to have 583 million users, while the US is expected to have 279 million users. India is on the verge of an Internet boom with a projected user base of 330 million to 370 million by 2015, which will be the second largest in the world, and the largest in terms of incremental growth, report by McKinsey & Company 40

http:// The Internet currently contributes a modest 1.6 per cent to India s GDP in line with most aspiring countries. This could grow to 2.8-3.

4 The Internet currently contributes a modest 1.6 per cent to India s GDP in line with most aspiring countries. This could grow to per cent by 2015, if India achieves its potential for growth in the number of Internet users and Internet technology related consumption and investment over this period. The booming mobile users and internet users (Younger Generation) in India year on year is a tapping point for online business. If the retailers understand the online buying behaviour of Indians and set the business model, they can do wonderful business. YOUNGER GENERATION INTERNET CONNECTING COUNTRY 75% of the total internet users in India are between the age group of years. In July 2012, the female population contributed to almost 40% of total users. The chart below shows a demographic segmentation based on age group and gender in India: With 75% of online audience between the age group of years, India is one of the youngest online demographic population globally. This is expected to be a continuing trend in coming years, given the age distribution in India, according to comscore research report. SOURCE: ASSOCHAM India State of Ecommerce in India - Sept 2012 To believe that for many young Indians, online shopping may become their primary way to shop throughout their lives. The young Indian consumers started experiencing modern platform for trade rather than doing in a traditional way, one such is the online shopping. According to Sachin Bansal, Indian Consumer mentality and shopping patterns are changing very fast. Online shopping is going to become mainstream in the coming five-six years. The proving example is, according to ALEXA Internet Inc, which provides commercial web traffic data ranked India s top 500 sites. In that Flipkart.com an e- tailing based company ranked 10th position. The number of web users in India visiting to e- tailing website is getting penetrated YoY. BOOMING MOBILE USERS India is the second largest market in terms of mobile connections and unique subscribers in the world. There is a high demand for mobile connection in India with 900 Mn, connection covering 25% of total Asia Pacific Region. By 2020, the Indian mobile sector could contribute almost Rs21.6 lakhs crore (US $400 billion) to India s GDP, according to GSMA Intelligence; GSMA; Ovum; EIU; MOSPI; BCG analysis. The traditional trend of using mobile for calling purpose is changing because of Cheaper Mobile Internet. 41

http:// CHANGE IN THE TREND OF USING MOBILE Mobile plays a vital role in the life of Indians which is being used for more than making calls because of the lowest price of 2G and 3G data connectivity

In recent years India has seen an increase in adoption of 3G and, with better spectrum pricing and management, mobile broadband growth could continue, with 3G and 4G adoption in India expected to

5 CHANGE IN THE TREND OF USING MOBILE Mobile plays a vital role in the life of Indians which is being used for more than making calls because of the lowest price of 2G and 3G data connectivity when comparing to the rest of the world. In recent years India has seen an increase in adoption of 3G and, with better spectrum pricing and management, mobile broadband growth could continue, with 3G and 4G adoption in India expected to increase 31 percent between 2013 and NUMBER OF 2G/3G MOBILE CONNECTIONS IN INDIA (millions) Source: GSMA Intelligence Trends have emerged in India. In recent years the major revenue for the mobile operators is through nonvoice (i.e.) Value Added Services. Voice traffic growth slowing down to around 9% p.a. in India, while data and value added services is increasing significantly Source: GSMA Intelligence; GSMA; Ovum; EIU; MOSPI; BCG analysis It shows the changing Indian mobile users, the way people communicate learn and access information. Of the total user base, mobile Internet users accounted for 130 million in 2013, a growth of about 92 per cent from 68 million in The number of users accessing the web on their mobile handsets in India is expected to grow to 185 million by June, 2014according to the Internet and Mobile Association of India (IAMAI). 42

6 A recent report by Boston Consulting Group noted that, at present, 45 per cent of online consumers in India use only their mobile devices to access the Internet. This is expected to increase to 60 per cent over the next three years. According to Kunal Bahl: Snapdeal CEO, In emerging markets, especially in India eventually mobile could see 10 times the users from normal PC Internet. Earlier we saw 5 percent of our orders from mobile. Now it s about 30 percent, excluding tablets. We expect that three years out from now 80 percent of our orders will come over mobile, making us the largest mobile commerce site in India. According to ebay studies which surveyed Indian consumers online in May 2012 Indian Smart Phone Users Are Smart Shoppers Too. Over 4,500 users filled up the Mobile Commerce Survey on their Mobile Internet habits. Over 94% of Indian smart phone users access the internet on their mobile: The ebay India Mobile Commerce Survey results indicated that a large majority of Indian smart phone users are accessing the mobile internet and as many as 64% of them have upgraded to 3G services. Shopping is the third most popular category of search after s & social networking: 70% of smart phone users access online shopping websites. Of which 68% of users have made an online purchase using their smart phone. LARGE DYNAMIC CONSUMING CLASS & CHEAPER ACCESS DEVICE FOR NON METROS CITIES The urban population is already sizable, at 377 million in 2011, or 31 percent of India s total population. By 2020, India is likely to have acquired an additional 112 million urban residents, and an urbanization ratio of 36.4 percent. Average per capita GDP is low, at $3,000 in 2010 (at purchasing power parity, or PPP, 2005 prices), and an estimated 30 percent of India s population lives below the poverty line. Nonetheless India s consuming class at more than 45.3 million households is sizable, and is projected to grow to 94.3 million households by 2020, according to Mc Kinsey & Company Shopping through mobile phones has emerged as a favourite option for residents of smaller cities, according to ebay. The study, by online marketplace ebay, shows that 49 per cent of mobile commerce users, or half of its universe from a sample user base of 1,345 people, are from non-metro cities. Further the report added in e-commerce, non-metros had a share of between 20 and 40 per cent till recently. It is for metros and non-metros among ebay buyers. CONCLUSION The Indian consumers are showing difference in their buying behavior and one such is the online shopping. The Indian E tailing market is witnessing strong growth which will receive huge investment in near future. To connect with the consumers and for doing sound business companies have to print their foot in electronic platform. Thus this paper highlights the significance of further research contribution to understand the Changing Consumer Buying Behavior with reference to Mobile Tailing. REFERENCES Aashish Bhinde. (2011) India goes Digital, AVENDUS Chandra Gnanasambandam. (2012) Online and upcoming: The Internet s impact on India, Mc Kinsey & Company E- Tail eats into retail (2014) CRISIL Research 43

7 E-commerce in India, (2013), Discussion Paper - Department of Industrial Policy & Promotion Hana Ben-Shabat. (2013), Global Retail E-Commerce Index for Market Opportunity - A.T. Kearney Research India Mobile Commerce Survey Indian Smart Phone Users are Smart Shoppers too - Online Media Centre - ebay, 2012 Kedar Gavane (2012), State of E-Commerce in India,comScore & ASSOCHAM Milan Sheth. (2012), Rebirth of e-commerce in India, Ernst & Young Online shopping hits record high (2013), ASSOCHAM; A real threat to small shopkeepers! PRIYANKA PANI. (2013), E-tailers click in Tier 2/3 towns and cities- Business Line Rasul Bailay & Chaitali Chakravarty. (2014)- Walmart to expand in e-retailing in India, planning marketplace model akin to Amazon, ebay - ET Bureau Saptarishi Dutta. (2014),Indian E-Commerce to Become $8 Billion Industry, The Wall Street Journal - Tarun Abhichandani, Internet in India (2013), Internet and Mobile Association of India (IAMAI) White Paper. (2013), E-tailing in India: Unlocking the Potential, Technopak The Mobile Economy in India. (2013), report by GSMA & BCG, 2013 Top Sites in India Alexa the web information company, 2013 Vidmay Naini. (2013), Ecommerce Opportunity beyond Metros- e bay India 44

INCREASING TREND OF INTERNET SERVICES IN INDIA

INCREASING TREND OF INTERNET SERVICES IN INDIA Bhavna Khatri Research Scholar, SHRI SATYA SAI UNIVERSITY OF TECHNOLOGY & MEDICAL SCIENCE ABSTRACT India has one of the largest and fastest growing populations