PwC India’s latest report on e-commerce shopping behavior in India unveils critical insights that businesses need to consider when navigating the country’s digital marketplace. The report, titled ‘How India shops online: Consumer preferences in the metropolises and tier 1-4 cities,’ presents data-driven findings that shed light on the evolving consumer landscape, particularly in tier 2 and tier 3 cities.
One key revelation from the report is the noticeable disparity in consumer priorities between urban centers and smaller cities. While 50% of urban consumers prioritise expedited delivery services, a significant 54% of consumers in tier 2, 3, and 4 cities place greater importance on securing deals and offers. This highlights the necessity for businesses to adapt their strategies to meet the specific needs of diverse consumer bases across different geographic regions.
“The next phase of growth for ecommerce will be driven by the new digital savvy consumers of tier 2,3 and 4 cities in India. In contrast to urban dwellers, these individuals, constrained by limited access to physical stores and brand choices consider online shopping a gateway to fulfil their aspirations” – Somick Goswami, partner and business transformation leader, PwC India, said.
Furthermore, the report underscores the impact of societal changes, particularly among women in India, on consumer behavior. With increasing financial independence, there is a discernible trend towards more individualistic shopping habits. This shift signifies a departure from traditional collective decision-making processes, necessitating a reevaluation of marketing and product positioning strategies by businesses.
The report is based on an online survey of 2,100 people, 100 qualitative interviews, and 400 in-person interviews across India with leading experts and industry partners. It provides nuanced insights into the purchasing habits, choices, and mindsets of online shoppers nationwide.
Another significant finding pertains to the influence of fake reviews on consumer trust, especially within the health and wellness product category. Over 42% of consumers surveyed expressed reluctance to make purchases in this category due to concerns regarding the authenticity of product reviews. Maintaining transparency and credibility in online reviews is crucial for fostering consumer trust and confidence.
Moreover, the report highlights the growing preference for mobile shopping experiences, with over 60% of consumers expressing a preference for shopping through apps over websites. Marketplace apps, in particular, are favored for their comprehensive product offerings spanning various categories. This shift underscores the importance for businesses to prioritise mobile optimisation and app development to capitalise on the burgeoning mobile commerce market.
Additionally, the report identifies YouTube as a prominent platform influencing consumer buying decisions. With its wealth of content ranging from product discovery to usage experience and unboxing videos, YouTube has emerged as a reliable source of information for consumers seeking guidance in their purchasing journey.
“India’s online consumption gravity is decisively percolating to markets beyond metros. This report creates an industry first insight on what are some of the unmissable category wise nuggets a brand needs to imbibe to success in Rest of India” Ravi Kapoor, partner and leader – retail and consumer goods, PwC India, said.
Lastly, the report unveils the payment preferences of GenZ consumers in non-metropolitan regions, with cash on delivery (CoD) emerging as their preferred mode of payment. This preference underscores the importance of offering diverse payment options to cater to the needs and preferences of different consumer segments.
In recent years, approximately 12.5 crore consumers in India have embraced online shopping, with a significant portion hailing from tier 2, 3, and 4 cities. Online shopping has emerged not only as a convenience but as a lifeline, especially for individuals in these regions where access to the latest products in physical stores is limited. These consumers, distinct in their digital literacy, infrastructure access, and socio-cultural influences, are driving a retail revolution in the country. This presents a monumental opportunity for brands to tap into this booming market.
“The report emphasises the need for tailored e-commerce experiences to resonate with diverse users across India. A human-centred approach, coupled with localised strategies and inclusivity, is crucial for success. It’s about connecting with each customer on a personal level, celebrating the rich tapestry of our cultures, and innovating every step of the way. By embracing agility and a deep understanding of consumer dynamics, businesses can chart a trajectory of sustained growth and profitability. When businesses get this right, they’re not just selling products; they’re creating experiences that people love and trust,” Prateek Sinha, partner and leader – design and experience consulting, PwC India, said.
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