Online shopping in India on rise; COD preferred payment method

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online-shoppingOnline shopping in India has hit a tipping point and is expected to see exponential growth in 2013, according to a report by search giant Google India and TNS.

The report highlights exponential growth in interest in online shopping by Indians as per data recorded on Google Trends*. Online shopping in India saw 128 per cent growth in interest from the consumers in the year 2011 to 2012 in comparison to only 40 per cent growth in 2010 to 2011 making 2012 the tipping point for online shopping in India.

In terms of product categories, consumer interest on Google search for apparels and accessories (30 per cent) emerged as the second biggest product category after consumer electronics (34 per cent) and is expected to become bigger than consumer electronics in 2013 in terms of absolute query volumes. Other categories that Indians searched for online were Books (15 per cent), beauty and personal care (10 per cent), home and furnishing (6 per cent), baby products (2 per cent) and healthcare (3 per cent).

Rajan Anandan, VP and Managing Director, Google India

Rajan Anandan, VP and Managing Director, Google India

Rajan Anandan, VP and Managing Director, Google India, said “With approximately 80 lakh Indians shopping online in 2012, online shopping industry in India is growing rapidly and will continue to see exponential growth. By looking at the trends in 2012, we expect 2013 to be a strong growth year for players who’re focussed on fast growing categories like apparels and accessories and niche product categories like baby products, home furnishings & health-nutrition.”

The frequency of purchase was also higher for categories like apparels and accessories (34 per cent), beauty and personal care (33 per cent) products in comparison to electronics (28 per cent), which also makes these categories more profitable because of repeat purchase. In terms of converting more users to shop online, online ticketing emerged as the gateway, as it was easier to convert online ticket buyers to shop online. Online ticket consumers were also likely to spend higher average amount of Rs 2,347 on their first product purchase in comparison to Rs 1,626 for internet users. Online ticket buyers were also seen to be more comfortable with the use of debit cards (24 per cent), credit card (19 per cent) and cash on delivery (55 per cent). For regular internet users – cash on delivery was the most preferred mode of payment (74 per cent), followed by debit card (18 per cent) and credit card (5 per cent).

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