As many as 50 million were the regular customers in India who chose online shopping last year and almost the same number of customers who opted out after their first time purchase. The dropout of about 54 million online shoppers caused a business loss of about $50 billion to the e-commerce chains in the country, which has the second-highest active Internet users globally, according to a research conducted by Google, Bain & Company and philanthropic venture fund Omidyar Network.
The online shoppers, who did not return, were mostly first time internet users from lower income groups. The research showed several reasons for online shoppers, who opted out after their first purchase, one of which was the language problem since user interface for these e-commerce websites and apps is mostly in English and sometimes in Hindi. Also, many new internet users are not familiar with a shopping cart icon because of their unfamiliarity with the modern physical retail, it said.
The research says that there is a $50 billion-plus opportunity that could be realised if the e-commerce industry reconnect these lost users and tap the next wave of 500 million internet users to transact online.
India is currently in the early stages of online commerce and the average online spending of $224 per online buyer, which is one-tenth of the e-commerce spending in China and quite lower than other markets. As per the report, almost half of the 50 million active online shoppers in the country were women.
Though India is far behind China and Brazil in Internet penetration, the user growth in India has been the highest with more than 40 million new users on average per year since 2013.
“Compared with China and Brazil, India’s penetration of 28% falls behind the 64% in Brazil and the 53% in China. Internet access across demographics varies widely with 55% penetration in urban areas vs. just 15% in rural areas. Also, 33% of men have internet access compared with only 22% of women,” the report noted.