From a kid to a grown up, I think millennials have witnessed some extraordinary changes in our society, kudos to technology that has led to ideological changes as well. Nothing quite compares to what we now see and observe, as compared to the earlier generations. The everlasting essence and the indispensable rituals like gift giving during festive season, have undergone a complete transformation of sorts. The consumer of today, as against the consumer of yesteryears owing to these ideological changes has managed to create a significant shift in buying behaviour.
It is because of this makeover that seems to be so visible in today?s day and age that long-standing traditions of gifting gold have been taken over by consumer electronics such as smartphones, televisions, washing machines etc. So why is this trend so noticeable now? Let?s answer this question with a few robust facts and figures that make for a compelling argument. According to a study conducted by the Retailers Association of India (RAI) in partnership with consulting firm KPMG earlier this year, the buying behaviour of Indians is currently experiencing some strong undercurrents.
The average Indian of today has access to better education with average expenditure increasing almost 50% from 2006-2011. Talking about age and income collectively, while the median age stood at 25 years in 2010 and is expected to reach 38 by 2050, the annual per capita income has doubled since 2010 from Rs 23,198 to Rs 46,492. Therefore, a large youth population base with such an income is bound to act as a catalyst and become a key driver of consumerism in the coming years. The internet age as we know it, the user base of this technology has increased from 146 million in 2012 to 243 million in 2014 and is expected to surge by another 300 million by 2018 surpassing the United States of America. Thus, with a market that is nowhere close to its saturation point, the possibilities are endless.
The e-commerce segment is looking at this as a godsend and why not? They have every reason to be optimistic and aggressive in their pursuit. As per the Internet and Mobile Association of India (IAMAI), the per user visit to various websites in order to look for mobile phones has gone up from 5.26 million in December 2012 to 13.79 million in 2013 registering a y-o-y growth of 162%. This astonishing fact in itself is reason enough for every e-commerce portal to ramp up their game and embrace this opportunity with everything they have. A Google-AT Kearney report pegs the number of smartphone users to rise to 385 million by 2017, more than 6 times of the current user base. It does not take much to join the dots and pan out a strategy that targets this user base with aggression.
Substantiating further, smartphone and e-commerce companies are more than receptive to this opportunity with plans to put on sale several units during the Diwali season. In addition to that, we are seeing e-commerce firms widely
advertise for their festive sale offers. All this triggers a purchase decision within an already overwhelmed and flabbergasted audience.
Come to think of it, this monumental shift in consumer buying behaviour during the festive season in India may well have stemmed from its western counterparts like the US and Europe. An IBM Digital Analytics report stated that online sales during Christmas 2013 registered an online growth of 16.5% as compared to the same period in 2012. Breaking it down further, Android devices accounted for 81% of all devices shipped during this period as against 12.9% for iOS. All said and done, the picture is not as pretty as it has been presented, given the vast market size of our country, the onset of the festive season is a logistical and manufacturing nightmare for many smartphone companies in India.
Coupled with that are the conundrums being faced by these e-commerce websites as they push their respective festive campaigns and invite several first time visitors to their portals resulting in endless traffic. Case in point, the ‘Big Billion Day Sale’ by e-commerce giant Flipkart that ultimately ended up with a website crash and not to forget, the competition utilising this failure to the best of their abilities. The important aspect being that this festive season has given quite a jolt to both smartphone makers and e-commerce companies as they look to learn from it and do a better job next time.
With the festive season coming in nearly eight weeks early, this is just a pre-cursor of the big bang that this trend has created. While smartphone companies piggy back on e-commerce firms in order to gain access to audiences they may not have reached through tradition routes, what is to be seen is how this buying behaviour unfolds and develops into a permanent trend shaping the economic and technological future of our country. From e-commerce portals being clogged during smartphone launches to retailers running out of inventory during festivities (Diwali to Christmas), this gifting trend seems to be on track to spread like an epidemic, determining the future for many smartphone players in this country.
By Keshav Bansal
The writer is marketing director, Intex Technologies