South Indian online shopping trends: Discount coupon rises

January 30, 2015 11:49 AM

Online shopping stores and the discount coupon code system has emerged as a new trend in India.

Online shopping stores and the discount coupon code system has emerged as a new trend in India. Virtual stores in India are not limited to any one product but they sell all kinds of material, raw or complete, ranging from home decor, designer clothes to grocery etc. The confidence in online shopping has been built up over a period of time. To further strengthen this confidence, these virtual stores have given their users a variety of options of payment, the most popular ones being being cash on delivery with free shipping. Besides, convenient payment options, the most common reasons for the increased popularity of the online shopping spree is that it saves a lot of time, money and effort.

Quality, price, discounts, availability of products across various categories and express checkouts are some of the few aspects of a complete customer experience, and Online shopping in its present form fulfils every aspect of it. It would be interesting to know that 2014 has seen a remarkable change and development trends across industries.

India’s e-commerce market is likely to have a whopping 100-million customer base, with both men and women contributing, and would be valued at $15 billion by 2016, according to a report released by Google and Forrester.

From a customer base of a mere 8 million in 2012, it has climbed to 35 million in 2014, according to the report, which also claims that by 2016 India’s customer base will be 100 million — a phenomenal growth of over 12 times in just four years. The current valuation of the market, which stands at about $3 billion for e-commerce now, is also set to shoot up to $15 billion by 2016, Google said. Rajan Anandan, Managing Director, Google India, said: “Mobiles are driving the growth in every single Internet product entity. In other markets, Internet took off on the desktop; in India, it’s happening on mobiles.”

Online shopping has become a fast–rising and popular trend especially in the South of India. Initially it was the youth customer segment that was attracted towards this worldwide popular trend, but today, the adults and the veterans, the middle class and the rich folk of the city have also fallen for this new trend and love it to the core.

The trends also indicate that South Indians tops the list when it comes to a comparative analysis of cities, with small towns such as Coimbatore, Vishakhapatnam, Thiruvananthapuram and Thrissur leading the list. Analysts at Google suggest that online shopping websites have become a boon to people living in remotest locations, who otherwise had to travel to cities nearby, to shop any kind of luxury.

The IT Hubs of Tamil Nadu, Maharashtra, Andhra Pradesh, Kerala and Karnataka are the most wired states in India, with the most cities where eCommerce originates. India’s top 5 rural hubs are Ambalapuzha (Kerala), Sajiyavadar (Gujarat), Adala (Gujarat), Abdalipur (West Bengal) & Kangayampalayam (Tamil Nadu).

Some of the major online shopping segments where South India loves to ‘Shop till they drop’ are:

Food and Groceries– South India shoppers have altered the way they shop for food and groceries. Tier 1 cities like Hyderabad and Bengaluru, where people live a fast pace life, can’t cater to their day to day grocery shopping by venturing out to the market and shopping. Food and Grocery retail is becoming the most sought after shopping trend.

Fashion and Apparel – This is the most happening and the foremost trend seen in the online business. The availability of almost every brand and variety of options to choose from, prompts the online shopper to shop till he drops.

Jewellery – South India is known for its jewellery designs and the quality standards it adheres to. Innovative wearable designs, low-base price points, choice between 14 – , 18 – and 22-carat gold, besides a range of diamond quality to pick from boosts the interest in online jewellery portals. The try before you buy option besides the assurance on quality and buy back in the future seems to instil increased interest in this format of buying. Availability of jewellery online, with warranty and different payment options, this segment is set to grow at a fast pace.

Consumer Durables and kitchen appliances – Online shoppers are very price conscious and online retailers continue innovating promotional prices in the market, offering a significant boost to this durable sector. Options like cash on delivery and manufacturers’ warranty add fuel to this rage.

Gifts and Stationary – This segment has a large audience and online shoppers don’t mind buying even their basic necessities around it. Books, Gifts and Stationary, Eye wear and Time wear have gone electronic, and have become a delight for online shoppers.

South India Buys More than the North
As would be expected, the 5 metros in the country are also the top 5 spenders in the country. And from this, you can see that the top amongst these is South India (Bangalore, Hyderabad and Chennai) as compared to the North.

City/State % of total orders
Bangalore, Karnataka 14.12%
Delhi 11.65%
Mumbai, Maharashtra 6.98%
Hyderabad, Andhra Pradesh 5.73%
Chennai, Tamil Nadu 4.12%

Contribution to overall e-commerce sales are as below:
South India – 41%
North India – 32%
West India – 21%
East, North east – 6%

While it’s a good idea to reach out to as large a consumer base as possible, if you had to focus your attention based on who spends more, these are the states to cater to:
Karnataka
Maharashtra
Tamil Nadu
Andhra Pradesh

These make up for almost 55% of the e-commerce pie. The top 4 metros are part of these states and we have already seen the significant contribution they make to overall sales.

In the end, when compared to North India, South India still lies in the nascent stage. The primary reason being the poor infrastructure facilities and minimum government support which is slowing down the whole growth and development process. For eg, in Kerala, there is a standoff between the state sales tax departments, regarding payment of taxes to the state. Almost all major online stores such as Flipkart, Myntra, Jabong, Snapdeal, and the likes have stopped delivering products to Kerala. There seems to be no end in sight for the deadlock, unless a uniform tax regime for e-commerce is implemented across the country.

In a region ripe with opportunity for growth in online business and other e-commerce opportunities, the greatest obstruction to expansion remains the rules and regulations that limit or restrict development of e-commerce. Once these impediments are resolved, South Indian shoppers would get an opportunity to join the rest of the country in its online shopping spree, and save their money by making online purchases.

By Ravitej, CEO and Founder, Pennyful

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