The fireworks move online

Written by Dilip Bobb | Updated: Oct 27 2013, 11:09am hrs
Like most people, I get an average of about four or five messages a week from online retail websites announcing special offers. This basically amounts to one message from each of the online retail sites I have visited over the months, which added me, at the speed of light, to their mailing lists. Over the past ten days or so, the messages have become like Typhoon Phailin, ferocious in frequency and intensity. Each day brings a battering of offers and deals to do with the festival season, all very tempting because of the difference in prices from their brick-and-mortar counterparts. The fireworks, it seems, are mostly happening online. A recent survey, by Assocham, says online retail websites have recorded a 65% rise in traffic this festival season compared to last year.

A 65% rise is huge, considering the market for online shopping in India is estimated at R52,000 crore. What seems to have led to the jump is that online retail is fast catching on in smaller cities. This makes sense since its generally in the metros that customers are spoilt for choice. The online marketplace makes everyone equal. Theres another possible reason for the big jump in consumer confidence. Whether its to do with the economic downturn or greater competition, most professionals are working longer hours. Online retail is open 24x7 so customers can access them when they get home. There is also the fact that their overheads are considerably lower than regular stores, which have to pay rents, electricity, sales staff and a host of other costs, allowing them to offer products cheaper. They also buy in bulk for storage in a huge warehouse, so they get large discounts, which they mostly pass on to e-customers. They also use courier services to ship their products to customers, cutting out the infamous middlemen.

Heres the interesting twist. The survey reveals that NRIs are most active shopping at Indian online sites during the festival season, mainly for gifts to their relatives based here. During Diwali, NRIs account for a major share of online sales. NRIs have been exposed to e-retail much longerAmazon and eBay both opened in America in 1995, while Flipkart, Indias biggest online store, started operations in 2007. However, despite the surge in online shopping from smaller cities, the survey found that e-retail is most popular in Delhi, followed by Mumbai and Ahmedabad. An amazing 62% of Delhiites prefer shopping online. In fact, the city-wise data suggests that there are cultural and regional differences even when it comes to buying stuff online. Those living in Chennai, for instance, spend most on gift items, household tools, toys, jewellery, beauty products and sporting goods. Those from Kolkata mostly splurge on movies and music, while Bangalores e-shoppers spend the most on books, electronic gadgets, computer peripherals, apparel, home appliances and health and fitness products.

There are some other reasons why online retail has found acceptance apart from the sheer convenience of 24x7 discount shopping. There has been a sharp rise in fuel prices over the last two years, which has led to less trips to the market or mall. There is also insecurity involved in moving around in the urban jungle, apart from the problem of finding a parking space and traffic chaos in most cities. At the same time, e-retail has got more organised, efficient and secure, and the choice of products is far wider than earlier. Technology has made it possible to compare products and prices online. Indians had an initial problem with credit card security, but that seems to have been overcome. In any event, most products are now available on a cash-on-delivery basis with the added convenience of home delivery. That has led to big-ticket items like laptops, refrigerators and other consumer electronics and home appliances being bought online.

This Diwali, there are a host of sites selling firecrackers direct from Sivakasi and cheaper than whats available at your neighbourhood stall, and the biggest site, Peacock, says sales have skyrocketed (sic). All this clearly shows that online shopping has come of age in India as more and more customers slip, literally, into the net.

The writer is Group Editor, Special Projects & Features, The Indian Express